Axact-gate probe: Foreign experts might be called in for help, says Nisar

Minister says FIA seized 42 servers of Axact, 10 directors to be grilled

ISLAMABAD:

The government is willing to enlist the help of foreign experts, if required, to investigate the fake degrees scam of software company Axact, Interior Minister Chaudhry Nisar told a news conference on Wednesday.

The multimillion-dollar fraud was exposed through a special report in the New York Times (NYT), following which the minister directed the Federal Investigation Agency (FIA) to take up the case.

On Tuesday, the FIA raided Axact headquarters in Karachi and the regional offices in the twin-cities of Islamabad and Rawalpindi. Thirty-five employees were detained and several computers and phones confiscated. However, Interior Minister Nisar said no one was detained.

The government has directed the Federal Board of Revenue and the Securities & Exchange Commission of Pakistan (SECP) to provide all relevant information on the company to FIA investigators, Nisar told the media on Wednesday. “I ordered the inquiry into the Axact scandal because the credibility of state institutions is being undermined by such reports.”

A seven-member FIA team has been constituted to probe all corporate matters related to Axact, he said. “The FIA team will ensure transparency in the investigation, which will be concluded as soon as possible.”

The interior minister’s news conference came after the SECP issued a show-cause notice to the software company regarding its “ultra vires activities which are not authorised by its memorandum of association”.



“Another notice for calling information ... has been issued to the Axact (Pvt) Limited and all its associated companies in order to gather further information,” read the official statement.

Nisar requested the media to refrain from arriving at conclusions on the Axact scandal. “We are not investigating a murder case. No one has been killed or hurt.”

Regarding media reports that the case was transferred to FIA’s Corporate Crime Circle, he said, “The case has not been transferred from FIA’s Cybercrime Circle.”

The minister denied all reports claiming that Axact Chief Executive Officer Shoaib Sheikh’s name was put on the Exit Control List.

He also denied the allegations that the Pakistani government’s help was essential in running the fake degrees mill. “The inquiry will be fair and no one can pressurise the FIA team. Axact’s Karachi and Islamabad offices have been sealed, and the education director of the company has been served notice.”

About the material evidence seized by the investigators, Nisar said, “The FIA has seized 42 company servers. Experts suggest it could take a month to conduct forensic auditing.” All forensic reports will be presented before the relevant institutions, like parliament, if required, he added.

Initially, 10 directors of the company will be grilled about the scam, he told the journalists. “If required, more will be called in for questioning.”

Responding to an NYT editorial that said it was ‘hard to believe’ the Pakistani government was unaware of Axact’s activities, Nisar said he had ordered the investigation soon after the exposé was published. “Show patience and wait for the inquiry in Pakistan to conclude. It is not unusual for governments to take action on media reports.”


Published in The Express Tribune, May 21^st, 2015.