FBR foiled money laundering attempt by Shell companies



Islamabad, SEPT 25 – FBR working in line with PM vision ofCurbing Money laundry in the country, successfully unearth mega scandal of Money laundering and Tax evasionby Shell Company name M/s Burshane LPG Pakistan LimitedCourt has issued Non-bailable arrest warrants against CEO, CFO and two other directors.

The sources said the FBR found a network of shell companies involved in income tax evasion and owned by a Pakistan Stock Exchange-listed company.

“The listed company has been found engaged in the business of liquefied petroleum gas and involved in smuggling of the LPG from Taftan border,” a source said, requesting the company name to remain undisclosed.

The sources said the Directorate of Intelligence and Investigation of Inland Revenue discovered properties worth billions of rupees acquired from illegal funds.Sources said that the directorate of I&I-IR Karachi, under the supervision of Director General Dr Bashir Ullah, has investigated into the case and unearthed fraudulent activities and financial malpractice of the specified company.

Sources said that the deceit network for money laundering is run by the accused CEO of the company in collusion with other directors and the Chief Financial Officer.

The investigation has revealed that the accused company is also involved in purchase and sale of smuggled Liquified Petroleum Gas (LPG) which is bought from Taftan border, and the related proceeds are kept out of books, thus these are concealed sales and purchases.

The accused company has thus evaded huge amounts of tax of around Rs1,775 Million, and the accused CEO, CFO and other directors of the company have acquired properties worth billions from the proceeds of crime as defined under section 3 of the Anti-Money Laundering Act 2010, sources disclosed.

In tax year 2015, the accused company was fraudulently acquired by another private limited company by funds acquired from National Bank of Pakistan (NBP) on the basis of defective land Khata. The same accused directors were the directors of the acquiring company at the time of this fraudulent merger which violated the provisions of section 97A of the Ordinance resulting in evasion of capital gain of around Rs1 billion.

The accused company has also concealed heavy investments of around Rs240 million in a private limited company, M/s Roots International Private Limited, and has also concealed acquisition of the said company in the name of the accused CEO.

Moreover, the personal bank accounts of the accused CEO and other directors have indicated huge cash transactions in their personal bank accounts from undisclosed sources, and hefty credits from another listed company which are prima facie from the proceeds of smuggled LPG being sold in the market.

The investigation has further led to detection of concealment of sales preliminary in two years amounting to Rs726 million and Rs828 million. It has also been identified that the company has unexplained and out of books movement of funds of Rs389 million and Rs396 million in the tax year ending June 30, 2018 and June 30, 2019 respectively from its bank accounts to an individual prima facie for purchase of smuggled LPG.

Further, the court has provisionally allowed attachment of nine bank accounts of the accused company which appear to be involved in money laundering for a period of 90 days from the date of order, and also issued non-bailable arrest warrants of the accused CEO, CFO and other two directors of the accused company. The role of external auditor and the banks involved in the case is also under investigation, sources added