Money laundering: FIA books Altaf Hussain for 'misusing KKF funds'

Case registered at state bank circle by businessman Sarfaraz Merchant

KARACHI: The Federal Investigation Agency (FIA) has registered a case against Muttahida Qaumi Movement (MQM) - London chief Altaf Hussain and others on charges of money laundering, illegal transfer and misuse of funds received by the party's charity wing - the Khidmat-e-Khalq Foundation (KKF). Clauses of the Anti-Terrorism Act were also included in the FIR.

A FIR No 5/17 under sections 11 (H), 11 (I), 11 (J) of the Anti-Terrorism Act, 1997 and sections 121, 122, 123A, 447-A, 406, 468, 471, 477-A/109 of the Pakistan Penal Code read with sections 3 and 4 of Anti-Money Laundering Act, 2010 was registered on September 21 at the FIA's State Bank circle by Sarfaraz Anwar Merchant, a businessman close to MQM's top leadership in London. However, news of the FIR was released to the media on Monday.

In the FIR, the complainant alleged that the party leaders used to send money to the founder of the MQM from KKF bank accounts through the 'hawala' channel.

The case was not only registered against Altaf but similar charges were also pressed against others, including Senator Babar Ghauri, Karachi Deputy Mayor Arshad Vohra, Khawaja Sohail, Khawaja Rehan and Senator Ahmed Ali, for sending money to the MQM founder from the KKF's bank accounts. The complainant stated that money was transferred to the accounts of 20 different companies, including the MQM chief's personal bank account.



Merchant, providing details of the bank accounts, said that these undeclared bank accounts which are being used for money laundering are 'placement of funds' generated from various illegal activities, including extortion, murders and kidnappings for ransom, illegal party donations from individuals and companies, land grabbing, sale of government land to private parties and corruption.

In his statement, Merchant said the undeclared bank accounts are maintained at different Pakistani banks, which make it easy to launder the proceeds of crimes.

In addition to the funds received from foreign governments, the funds collected by the KKF are being misused by Altaf and his accomplices in the United Kingdom and Pakistan through MNAs, senators, the deputy mayor and other members of the party, he claimed.

Funds from the KKF bank accounts have illegally been transferred to the bank accounts of Ghauri, Vohra, Sohail, Senator Ali and some organisations, according to Merchant.









In his application to the FIA, the complainant said, "I, Sarfaraz Anwar Merchant whilst living in London, UK, was arrested by the Metropolitan Police after a raid on my house on December 5, 2013, alleging against me, the offence of money laundering in relation to an investigation that was being conducted into the funds held and controlled by the MQM."

In England, the MQM claims to have been registered as corporate body and not a political party. "Where reference is made to the MQM as a political party, it is the political party in Pakistan. However, subsequently, it came to my knowledge that the MQM was never registered in the UK," read Merchant's statement.

"After I was granted bail and during the course of the investigation, a document, 'pre-interview briefing' dated April 15, 2005, was handed to me by the police, which gave the entire background of the case. The police sought for me to read it and prepare answers to the queries of the investigation officer," Merchant stated.



It was stated in the background document given by the Metropolitan police to Merchant that large amounts of cash were seized from the premises associated with the MQM and a significant amount of their assets had been identified in the UK. The document also mentioned that all the cash and assets were believed to represent funds provided to MQM by the Indian government or via other unlawful activities.

It was asserted in the document that there is evidence that Altaf and members of his party had breached the Pakistani Electoral Legislation in as much as they had received prohibited funds from the Indian government.

The pre-interview briefing stated that Tariq Mir and Muhammad Anwar, in their interview in relation to a separate investigation, revealed that the MQM was receiving funds from the Indian government. Mir and Anwar were partners in the business with Altaf as senior members of the MQM, operating from the UK.



"Being aggrieved of being targeted because of the unlawful activities of the MQM and having being arrested and a victim of the circumstances, I started to probe further with a view to find out the truth and analyse the affairs of the MQM and Altaf's activities," Merchant's statement read.

He added that after going into more detail, he found that the MQM is registered with the Election Commission of Pakistan (ECP) as a political party of Pakistan with Altaf as its founder leader.

"A proper declaration is required to be made to the ECP about the source of the funds, maintain all accounting books and every minute details of funds received and utilised, get all accounts audited from chartered accountant firms and give details from whom and where the funds have been received," according to Merchant's statement.



Following this, an investigation of the case has been transferred to the assistant director, Muhammad Ali Abro.