Modaraba scams: ‘Conmen looted over 32,000 people in a year’

NAB considers public awareness campaign to prevent future losses.

LAHORE:

The number of Modaraba cases have increased to 57, looting Rs21.68 billion from the public, according to brief report prepared by the National Accountability Bureau (NAB) made available to The Express Tribune.

In April last year, there were only five Modaraba cases, but now the number has spiked to 57, making it an uphill task for the anti-graft body to arrest the culprits and recover the money.

NAB Chairman Qamar Zaman Chaudhry has strictly directed the body’s Rawalpindi bureau to arrest all the accused at all costs including those who have fled the country, said officials. He has also sought for a fortnightly progress report.

Currently, NAB is investigating five major Modaraba scams involving an amount of Rs20.52 billion, affecting 32,325 people. These cases include M/s Fayyazi Gujranwala Industries, Mezban Trading Company, al Wasey Group, Taxila Islamic Traders Pvt Ltd and M/s Elixir Group. Recoveries of Rs1.29 billion have been made in these cases.

Separately, the anti-graft body has verified eight complaints of Modaraba scams amounting to Rs541.65 million, looted from 457 people.

Officials revealed that NAB has also approached the Malaysian and Thai governments for Mutual Legal Assistance (MLA) under Section 21 of the National Accountability Ordinance (NAO), 1999, to arrest those who have fled the country.

The accused convinced people in mosques and madrassas against the present banking systems and invited investment in the name of Modaraba and Musharika (Islamic investments) in cash.

The plunderers promised to pay monthly profit of Rs5,000 to Rs9,000 per Rs100,000 and distribute profit from collected money without any real business. These fraudulent companies have maintained no proper record of investors and have reportedly ‘buried’ the temporary documents that were prepared to woo people.

To trap more people in their net, the accused were paying some amount to the investors as ‘monthly profit’ and this amount has been calculated as around 40% of the total investment in these fraudulent schemes, NAB officials explained.

The NAB is considering launching an awareness campaign for the public to prevent any possible future losses in similar scams, NAB spokesperson Ramzan Sajid told The Express Tribune.

The major affected areas include Hazara Division, Federally Administered Tribal Areas, Malakand Division, Potohar Division and Azad Jammu and Kashmir. While reviewing the claims of victims, it surfaced that a majority of the people affected include retired armed forces personnel, retired government servants, overseas Pakistanis and those affiliated with Tableeghi Jamaat.

 

Published in The Express Tribune, April 27^th, 2014.