After dragging its feet for years, the National Accountability Bureau’s Executive Board may decide to file a reference against owners of Natover Lease and Refinancing Company for siphoning off at least Rs700 million of over 1,600 depositors.
Filing a reference against Nadeem Sheikh, the owner, was on the agenda of the NAB’s Executive Board meeting convened today (Wednesday), said a NAB official to the Senate Standing Committee on Finance and Revenue.
Secretary Finance Dr Waqar Masood told the committee that NAB has not yet filed a reference against the Natvoer company officials.
Headed by Senator Nasreen Jalil of the MQM, the committee grilled NAB officials for not arresting Sheikh. He remains a free citizen despite NAB conducting criminal proceedings against him and equity market watchdog seeking liquidation of Sheikh’s assets from Islamabad High Court for siphoning off depositors’ money.
A sub-committee of the standing committee had held the Securities and Exchange Commission of Pakistan (SECP), auditors and a credit rating agency responsible for negligence that provided an opportunity to the politically ‘well-connected’ personality to siphon off depositors’ money.
The NAB had ordered an inquiry against Sheikh in May 2010 but the case was not pursued actively. The SECP, the equity market regulator, had referred the case to the NAB.
Sheikh established a subsidiary firm NIPL and started taking deposits by using the infrastructure of Natover. Sheikh lured depositors by offering them 18 per cent return. He then deposited the amounts in NIPL accounts which were later transferred to his personal accounts.
Taxpayers’ refunds
As the taxpayers run from pillar to post to get their money back, tax authorities admitted giving preferential treatment to a politician in payments of sales tax refunds, thus negating claims of issuing the refunds on merit.
“The six cases of sales tax refunds of Senator Ilyas Bilour were cleared after breaking the queue,” said Ashraf Khan, Member Inland Revenue, Operations, of Federal Board of Revenue. He gave the testimony in front of the standing committee that called the FBR to give an update.
Khan did not disclose the amount that was paid to Senator Bilour but said that it was the only incidence when the FBR issued Refund Payment Order (RPO) by breaking the queue.
The FBR issues the RPO on the basis of online claims filed by taxpayers. The FBR claims that it does not exercise discretion and the sales tax refund payments are made on merit.
Senator Bilour, who is a member of the standing committee and was present in the meeting, said in November last year he approached the finance minister to get his payments cleared only after the FBR did not timely pay the refunds.
He further said the FBR has not issued RPOs after December and people have started abandoning the export business. Bilour said some of his refunds’ claims pertained to the previous fiscal year and were still outstanding.
“If a politician has to seek the intervention from the top to get his genuine refunds, what would be happening to those who do not enjoy clout,” observed Senator Jalil, the chairperson of the standing committee.
The FBR has been accused of blocking taxpayers’ refunds to artificially balloon its revenue collection. This has increased the cost of doing business, particularly for exporters.
But Khan went on to say that the FBR cleared all the outstanding refunds of textile exporters that could be electronically verified for the period of July to September of the current fiscal year. He said Rs19 billion were paid to the textile sector in last two months.
On the contrary, All Pakistan Textile Mills Association Chairman SM Tanveer clearly stated that the FBR had not cleared all outstanding refunds to the textile sector, amounting to Rs114 billion on account of sales tax refund.
Published in The Express Tribune, November 19th, 2014.
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