Massive money laundering uncovered

Money laundering to the tune of billions of rupees has been detected during a customs audit of two solar panel importers in Pakistan, as per official documents available with The Express Tribune. This illicit activity was carried out through an over-invoicing scheme employed by the two companies, namely Bright Star Business Solutions Private Limited and Moonlight Traders.

Following a thorough investigation post-customs clearance, the Directorate of Customs Post Clearance Audit (South) has initiated separate cases against the two companies. Sources indicate that these entities imported solar panels valued at Rs35 billion from China. Shockingly, they funneled a whopping Rs73 billion in black money overseas by inflating the invoice values. Initially valued at Rs73 billion, these solar panels were eventually sold in the local market for Rs46 billion.

The investigation revealed that the two companies were non-functional and serious violations and irregularities were uncovered during the audit of their imported solar panels. This included an illicit transfer of Rs73 billion and the inflation of the imported solar consignments' values. It was determined that Bright Star Business Solutions (Pvt) Ltd and Moonlight Traders had imported a total of 2,900 consignments of solar panels from China between 2017 and 2022, with over-invoicing amounting to Rs38 billion.

To further validate the import prices, the audit team scrutinised the sales tax records of the importers. It was discovered that the actual price per watt of the imported solar panels was significantly higher than what was declared in the goods declaration. Bright Star claimed imports of solar panels worth Rs47.6 billion, while Moonlight declared imports of Rs25.4 billion. Both companies are considered dummy entities as their income tax returns did not reflect the legitimate required income.

Furthermore, the investigation has revealed close connections between these two companies, with bank statements indicating money transfers between them. Notably, their offices are located in the same building at Dean Trade Centre in Peshawar Cantt. Astonishingly, these importers managed to transfer Rs73 billion abroad, despite their financial status showing only Rs110 million.

According to the Customs Directorate, sales tax records from these fictitious companies show a declared import value of Rs73 billion, while the actual local sales of solar panels amount to Rs46 billion. This significant difference strongly suggests that overvalued invoices were used to misrepresent the import values in the goods declarations. In response, the directorate has formed investigation teams to apprehend the directors of the two fictitious companies.

Published in The Express Tribune, September 6^th, 2023.