KARACHI: Zeb* is a young investigation officer at the Federal Investigation Agency (FIA). He hails from a remote and impoverished area of rural Sindh.
One day in December 2015, a high-ranking officer handed him a four-page report.
Already uneasy about being summoned individually, Zeb looked at the officer curiously, who asked him to take a seat.
The officer picked up the nearby desk phone and instructed the operator not to disturb him for a while. He then turned to Zeb. “This is extremely sensitive information. The file contains information about certain bank accounts through which multi-billion rupee transactions have been made. Our sources say these bank accounts are being used for money laundering by or at the behest of certain influential members of Sindh’s ruling political party.”
The officer instructed Zeb to discreetly investigate the accounts and report back to him, while maintaining absolute secrecy. “No one other than the two of us should know about this investigation.”
For Zeb, who was still quite new to the agency, the whole episode was surreal.
Little did he know at the time that this surreptitious conversation would be the precursor to a cascade of events that would ultimately incriminate some of the most prominent bankers and businessmen as well as threaten the very foundations of one of the biggest political dynasties of the country.
According to FIA sources, information regarding the fake accounts came to the fore when an intelligence agency picked up a prominent money changer in an unrelated case.
Under considerable pressure, the money changer spilled the beans faster than the authorities could comprehend. Among other revelations was a candid confession that certain bank accounts had been created to receive kickbacks. The intelligence agency shared the information with the FIA.
The money changer was released a year after his alleged detention.
As the monitoring and investigation of these suspicious accounts continued, it surfaced that five of these accounts in two banks – the Sindh Bank and Summit Bank – had been used for transactions worth around Rs15 billion.
The accounts, it was soon discovered, were operated by certain companies, which were found to be fake. Funds were credited into these accounts from contractors with multi-billion rupee contracts with the Sindh government. This money was then transferred to accounts of companies owned and operated by the Omni Group, whose chairperson, Anwar Majeed, is a close aide of Pakistan Peoples Party (PPP) co-chairperson Asif Ali Zardari. Another beneficiary was Nasir Lootah, the chairperson of Summit Bank and a Dubai national.
The money was even used to cover the personal expenditures of the leadership of Sindh’s ruling party, including millions paid to a travel agent, payment of electricity bills and for the purchase of luxury vehicles.
When the first few months of investigation showed possible involvement of such high-profile persons, Officer Zeb was again summoned by his superior officer. This time, he was instructed to shelve the investigation.
The investigation resumed almost a year and a half later, when Bashir Memon took charge as Director-General of the agency. A senior reputable officer of the Police Services of Pakistan (PSP), he had previously served on various positions in the Sindh Police.
Some of Memon’s briefings included those on mega-corruption scandals. He decided to investigate them afresh. They got their big break in December, last year, when the Financial Monitoring Unit (FMU), a regulatory body, flagged several transactions with a Suspicious Transaction Report (STP) and shared it with the agency.
This meant the transaction could be related to money laundering or even terrorist financing.
FIA’s State Bank circle initiated a formal inquiry in January. It was soon revealed that some major contractors of the Sindh government had transferred billions in the accounts of seven companies that were at this point termed ‘suspicious’.
These included A-One International, a company registered in the name of Tariq Sultan.
The FIA summoned Sultan, who got the shock of his life when he was informed that an account in his name had made transactions worth around Rs4 billion.
For someone who had only recently started earning Rs25,000 per month, not much above the mandated minimum wage, such an amount was unheard of. But that was not the end of the surprises; at least Rs15 million of that amount was transferred to an account associated with Zardari Group. Former president, Asif Ali Zardari, his three children and his sister, Faryal Talpur, are listed as shareholders in the company.
Sultan is an employee of Omni Group, which is in turn owned by Anwar Majeed. The latter, who is now in state custody, is under investigation for his involvement in these transactions. Zardari and Talpur have been called in for questioning by the FIA several times and have secured pre-arrest bail from a banking court.
By June 2018, the FIA had several high-profile names on its list but was unable to make headway – for several reasons. Local investigators were unwilling to pursue the case against the influential friends of the former president. The FIA, time and again, complained of the lack of cooperation from other agencies as well as the provincial government.
It was at his point that the Supreme Court intervened.
Chief Justice Mian Saqib Nisar took suo motu notice of the ‘slow progress’ in the money laundering case. The agency’s director-general and relevant officials were asked to appear before the apex court.
The CJP’s intervention acted as a catalyst for the investigation agency.
Officials arrested another close aide of Zardari, Hussain Lawai, on July 6, a few days after he was barred from leaving the country. The septuagenarian Lawai had previously headed Summit Bank and was currently serving as chairman of the Pakistan Stock Exchange. He was arrested along with another banker, Taha Raza, and two others.
Subsequently, the first case was registered in the mega-corruption scandal.
The FIA submitted its report to the apex court on July 8. According to the report, the investigations revealed a web of companies and accounts that were being used to transfer billions of rupees. Most of the accounts were either being operated in the Sindh Bank, owned by the provincial government, Summit Bank, which is owned by a UAE prince with alleged close ties to Zardari and United Bank Limited (UBL).
In all, 29 accounts were identified that received payments, totaling at least Rs35 billion.
At this point, the agency also submitted three lists in the court. One comprised the Sindh government’s major contractors, who transferred billions of rupees into the fake accounts. The second list identified the seven fake companies, while the third, which stirred the most controversy, contained the names of those who had benefitted from these payments.
Broadening the scope
After getting the go-ahead from the apex court, the agency enlarged the ambit of its investigations.
Since then, investigators have unearthed over a hundred such accounts, from which money was transferred to influential persons through back channels. Moreover, cash amounting to almost Rs5 billion was also withdrawn from these accounts.
According to FIA, properties were purchased in the UAE at the time of the cash withdrawal.
Due to the extent and scope of the investigations, the FIA DG had formed seven teams under Najaf Quli Mirza, who is the agency’s additional director general.
Each team was headed by an assistant director, three of whom were from Sindh, while four hailed from Punjab. Each team comprised two investigation officers.
Those working on the case believe that Omni group’s Anwar Majeed and his son Abdul Ghani Majeed are the masterminds behind the entire scheme. The day-to-day dealings were, however, carried out by two company executives, Aslam Masood and Arif Khan. Both have left the country. There were unconfirmed reports that an FIA team met and recorded the testimony of Masood in Jeddah, where he was under treatment at the time. FIA officials did not confirm the veracity of these reports.
What the FIA investigators did confirm was that these accounts, many of which were opened in the names of Omni Group’s low-cadre employees, were used for layering, as well as transferring money to different accounts through which real estate was purchased.
Arrests of the big fish
Omni Group chief Anwar Majeed was arrested along with son Abdul Ghani Majeed on August 15, when they returned to the country on being summoned by the apex court. They are now on judicial remand.
Meanwhile, Asif Ali Zardari and Faryal Talpur have appeared before the investigators and have since secured interim bail from the Banking Court. The last hearing of the case was on December 21, when the duo got their fourth extension in the bail till January 7.
Formation of JIT
Amid complaints from the FIA and barbs flying in the Supreme Court, CJP Nisar ordered the formation of a Joint Investigation Team to quicken the pace of the investigation. One of FIA’s principal complaints was the lack of cooperation from the Sindh government.
That was resolved as the CJP ordered the Sindh government to hand over records of expenditures on development projects over the last five years. In the meantime, the Sindh government, under pressure from the SC, also issued directives to its various departments to stop all dealings with the Omni Group.
Anwar Majeed and company had their own problems to deal with. The JIT, by this time, had unearthed irregularities in loans amounting to over Rs73 billion taken by nine sugar mills belonging to the Omni Group from the National Bank of Pakistan (NBP) as well as other private banks. As many as nine new inquiries were registered in the FIA’s Karachi commercial banking circle.
The investigation found that the Omni Group had pledged 4.5 million bags of sugar in March and April 2018 to obtain a total loan of Rs13b from both government and private banks.
The majority of the loan amount was taken from government banks.
According to the rules, the Omni group could not sell the pledged 4.5m bags of sugar without advanced permission from the banks. It was also bound to return all the loans to the banks within a week of the sale of the sugar at the specified prices. According to the JIT’s report submitted to SC on October 26, Omni Group owed a total debt of Rs73 billion to different banks. It took Rs23 billion from the National Bank and Rs50 billion from Sindh Bank, Silk Bank and Summit Bank.
The JIT, during the course of its investigation, learnt that the Omni Group had shifted the sugar bags, which were kept as pledges, from the sugar mills to an undisclosed location, or had sold them without informing the bank during the hearing of the money laundering case.
In the meantime, accounts in the names of several unwitting individuals, such as the ice cream vendor and a rickshaw driver, were found to have been used to transfer funds. These individuals had no connection to the Omni Group or any other individual associated with the case.
The masterminds, in connivance with bank officials, had allegedly used their accounts which had been lying dormant for some time. In one case, when the FIA reached the house of a person under whose name one such account was operating, they were informed that the account holder had died some time ago.
Last week, the JIT submitted its final report to the Supreme Court, which will take up the case for hearing on Monday, December 24. All the evidence, compiled over the course of the last three years starting with Zeb, was stuffed in over eight boxes and submitted to the apex court’s registry.
The scope of the inquiry now includes over 300 persons of interest, scores of bank accounts and companies associated with them. At the centre of it all are Anwar Majeed, his sons, bankers Hussain Lawai and Taha Raza, the incumbent and a former chief minister and two former chief secretaries, besides the leadership of Sindh’s ruling party, Asif Ali Zardari and his sister, Faryal Talpur.
*Name has been changed to protect identity
An earlier version of this story had inadvertently identified Mr Nasir Lootah as a member of Dubai’s ruling family. Mr Lootah is not a member of Dubai’s ruling family. The mistake is regretted. – Editor