Hawala case: Khanani and Kalia acquitted

Published: March 5, 2011
The company was accused of laundering money and physically taking foreign currency out of the country through illegal channels.

The company was accused of laundering money and physically taking foreign currency out of the country through illegal channels.

The directors of Khanani and Kalia International and four bankers were acquitted on charges of operating an illegal money transfer system at a banking court in Karachi on Friday.

Mir Muhammad Sheikh, the judge presiding over the case, said that the prosecution failed to present evidence that directly implicated Javed Khanani, Munaf Kalia, Hanif Kalia, Atif Polani and the four bankers – Syed Wajahat Ali, Arif Rehman, Tasleem Ahmad and Masood Altaf – and ordered their release, unless they were accused of other crimes.

The eight men had been accused of running an illegal informal money transfer system in May 2008 by the commercial banking crimes unit of the Federal Investigation Agency (FIA). The prosecution changed investigators in the middle of the investigation, replacing Ghulam Asghar Jatoi with Deputy Director FIA Khaleequz Zaman.

The defence attorney for Khanani and Kalia, Shaukat Zubedi, said that his arguments had relied mainly on trying to prove that the prosecution had misled the court about the nature of the evidence against his clients. Zubedi said that the case registered by the FIA suggested that they would present evidence directly implicating Khanani & Kalia and their associates, but instead the evidence turned out to be largely non-specific descriptions of illegal money transfer systems.

Khanani and Kalia was one of the largest currency exchange companies in the country, founded in 1983 by Hanif Kalia. The directors of the company were accused of violating the Foreign Exchange Regulations Act, the Prevention of Electronic Crimes Ordinance and the Pakistan Penal Code by operating a money transfer system based on personal contacts, known as hawala.

The prosecution in the case offered 42 witnesses. Each of the witnesses described the system in great details, which relies on money transfers taking place anonymously through a series of connected brokers who accept money at one end and then ask one of their agents to deliver money at another location. The brokers keep track only of what they owe each other.

The prosecution in the case against Khanani and Kalia, however, was not able to provide any evidence that showed that the company, its directors or the four bankers were in any way involved in such activity.

The legal troubles for the eight men may not be over just yet, however. There are four further cases pending against them, two at other courts in Karachi and one each in Lahore and Peshawar. Because of these cases, they have not yet been released despite their acquittals.

Published in The Express Tribune, March 5th, 2011.

Facebook Conversations

Reader Comments (6)

  • M M Malik
    Mar 4, 2011 - 4:23PM

    A politically motivated case meets it logical end?Recommend

  • G.Haider
    Mar 4, 2011 - 7:16PM

    The court must have sound reasons to acquit them but there is no denial of the fact that the money changers in pakistan are usually involved in illegal transfer of money from/to Pakistan—–good luck my country!Recommend

  • hassan
    Mar 4, 2011 - 8:52PM

    Why three years were spent in wasting court’s time ?Recommend

  • Billoo Bhaya
    Mar 5, 2011 - 6:54AM

    They destroyed k&K’s business because he was not paying Mr.10% his fee. Can’t get more screwed than that. Can you??Recommend

  • ik
    Mar 5, 2011 - 11:02AM

    Mir Muhammad Sheikh – the judge in this case is either blind or deaf or dumb or all together.Recommend

  • Iftikhar-ur-Rehman
    Mar 5, 2011 - 1:35PM

    TONS of money (dollars/ pounds/Euros) must have changed hands before this verdict. We thought a correct decision would be taken by the court ut then money makes the mare go. As one singer said “LAGAY RAHO”Recommend

More in Pakistan