ISLAMABAD: Around 45 Axact employees were arrested on Tuesday as Federal Investigation Agency raided the offices of the software company in Karachi and the twin cities.
The move came shortly after Interior Minister Chaudhry Nisar ordered FIA to probe into the special report published by The New York Times alleging the software company was earning tens of millions of dollars by selling fake degrees around the world.
“If the said company is involved in any such illegal work which can tarnish the good image of the country in the world”, a ministry statement said.
Soon after, FIA teams comprising IT experts sealed Axact’s offices in the twin cities and registered a formal inquiry into the Axact scandal, sources privy to the development told Express News.
Read: INYT special report: Fake degrees earn company millions
According to Express News, employees were evacuated from the software company's head office in Islamabad. Further, around 45 employees were rounded up, including HR and PR managers, to be taken to FIA headquarters.
The arrested Axact employees were shifted to FIA’s cyber-crime wing office.
Axact office in Karachi. PHOTO: ATHAR KHAN/ EXPRESS
The seven-member FIA team also seized hard disks, computers, other electronic equipment and documents belonging to the IT firm. The bags and mobile phones of department heads in Islamabad have also been seized.
“A report will be compiled after carrying out digital analysis to ascertain if the electronic equipment was used for illegal activities,”sources said.
After gathering evidence and rounding up employees, the FIA team is now headed to the software company’s second office in the capital.
The FIA also raided Axact’s call centre in Rawalpindi and seized voice call recorders and other devices. Axact’s call centre regional director Colonel (retd) Jamil was taken into custody.
A second team under the supervision of FIA Deputy Director Kamran Attaullah has raided Axact’s Karachi headquarters.
The FIA teams have left Axact’s Karachi headquarters. Speaking to the media after the raid, Deputy Director Kamran Attaullah said, “Investigations are still underway. We will let you know further details later.”
“Nobody has been arrested from the Karachi office,” he added.
Deputy Director Kamran Attaullah leaves Axact office in Karachi. PHOTO: ATHAR KHAN/ EXPRESS
Sources privy to the development added, the FIA teams seized HR and accounts records.
The FIA official present at the Axact office in Islamabad refused to comment on whether they employees were being detained or arrested when asked by an Express News correspondent.
The FIA team will seal two servers in Axact’s Karachi office. “The main two servers operate all of Axact’s activities worldwide,” a source added.
Deputy Director of the FIA’s Cyber Crime wing Zain was currently present with members of his team at the Karachi office.
Officials at the FIA swooped on the Karachi headquarters of the company, confiscating computers and records and expelling employees from the building, a member of the raiding party told AFP on condition of anonymity.
Employees stand outside Axact office in Karachi. PHOTO: ATHAR KHAN/ EXPRESS
A similar operation at the company's Rawalpindi office has resulted in two arrests, an official there said, but later clarified they were being quizzed and had not been charged with a crime.
"The raid is still ongoing," Mehmoodul Hassan, acting director of the FIA's Cyber Crime Wing, told AFP.
"Our team is gathering evidence. Our director general will release all details about the raid once it's completed."
“The first phase of the probe will investigate the allegations leveled by the New York Times against Axact, while the second phase will look at technical aspects of the investigation,” the source said.
Axact administration blocked the road in front of their office in Karachi's Defence area after media representatives arrived.
It is said the investigation will be supervised by Interior Minister Chaudhry Nisar.
Securities and Exchange Commission of Pakistan (SECP) has initiated a probe into the allegations against Axact. A meeting is currently under way in Islamabad following the raids at the company's offices.
Further, FIA believes Axact also operates from Lahore and has asked the company to immediately give them details of their offices in the city.
Axact, that has pledged to build a media empire, faced tough criticism on Monday after The New York Times said it was earning tens of millions of dollars by selling fake degrees around the world.
Nisar took notice of the NYT report which claimed that Axact ran a fake education empire that involved paid actors promoting fictitious universities and even fake State Department authentication certifications bearing the signature of John Kerry.
The report, which quoted former employees and analysed more than 370 websites of fake universities, accreditation bodies and other purported institutions, sparked a wave of criticism on social media even as the company denied wrongdoing.
Meanwhile, FIA's inquiry committee meeting presided by DG FIA Shahid Hayat has decided that the case against Axact will be transferred from the department’s cybercrime circle to its corporate circle. Experts from the cybercrime circle will cooperate, however.
Senate takes up the matter
On Tuesday, the issue was also taken up in the Senate where Senator Aitzaz Ahsan pointed out the issue and said that the management of company has the right to give explanation.
"It is unfortunate that Pakistan is being defamed," the senator said, adding that CEO Axact Shoaib Shaikh and his TV has the right to clarify.
"But it seems that the story that has been published is true," Ahsan said. He termed the issue as a matter of grave concern.
The senator said that we should take notice of Pakistanis being so experts in forgery.
On the suggestion of Ahsan, Chairman Raza Rabbani constituted a committee to probe into the issue and submit a report in a month.
"This is an important issue and investigation needs to be conducted," Rabbani said.
Soon after the report was published, a message on Axact's website declared the story "baseless, substandard, maligning, defamatory, and based on false accusations" and added it would sue The New York Times.
The company has said it will launch a news channel named Bol this year, which has already lured many of Pakistan's top TV anchors and journalists with reportedly the highest salaries in the market.
Read: Axact threatens to sue Pak Tea House for rounding up Twitter reactions
According to the report, Axact created a series of fake websites involving "professors" and students who were in fact paid actors.
The "university" websites mainly route their traffic through servers run by companies registered in Cyprus and Latvia, and employees would plant fictitious reports about Axact universities on CNN iReport, a website for citizen journalism.
The article cited clients from the US, Britain and the United Arab Emirates who had paid sums ranging from thousands to hundreds of thousands of dollars for their degrees -- with some believing the universities were real and they would soon receive coursework.