PAKISTAN
CRIMINAL CAPITALI$M
KARACHI: Some nine iron and steel importers have been caught in a massive money laundering worth a staggering Rs 9.7 billion, committed in the last three fiscal years. This was revealed in a classified document, which was exclusively available to Business Recorder, Karachi.
According to the details, the Post Clearance Audit (PCA), South has uncovered a huge money laundering case involving around Rs 9.7 billion in the iron and steel sector.
The scandal is linked to nine fraudulent importers who exploited the “manufacturing status” to evade Rs 315 million in duty taxes.
PCA South initiated a sector-based audit focusing on iron and steel imports, following reports of massive misuse.
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PCA South issued audit notices to the nine importers, however, all notices were returned by the courier company with remarks that the addresses were untraceable.
Upon verifications by the PCA teams, it was confirmed that said nine importers were physically non-existent.
Scrutiny of the FBR database led to the discovery that these companies had transferred Rs 9.72 billion abroad while evading Rs 315 million in taxes through illegal exemptions availed by way of misuse of manufacturing status.
The modus operandi of these importers indicated a well-orchestrated plot to siphon funds out of the country illegally.
The importers falsely claimed exemptions and reduced rates of duty/taxes that were only allowed for manufacturing enterprises. The importers engaged in commercial sales of same-state iron and steel products while lacking any manufacturing facilities or business premises.
The scrutiny also revealed that said nine importers had very poor financial worth, as per their income tax declarations, which made financing such massive imports highly suspicious.
Even more striking, three of the nine importers did not file income tax returns at all, thus substantiating “Nil” financial worth, while financing imports worth Rs 2.48 billion, showcasing a blatant money laundering scam.
The PCA teams are intensively probing to identify the real masterminds behind these fraudulent operations. To hold the true perpetrators accountable, the investigation is expected to uncover deeper layers of this intricate scam. Investigation will also cover as to how such companies managed to acquire manufacturing status registrations without having any physical existence at all.
PCA teams, led by Director General Chaudhry Zulfiqar Ali and Director PCA South Sheeraz Ahmed, are now probing to identify the true masterminds behind these fraudulent operations.
The investigation aims not only to hold the real perpetrators accountable but also to uncover the deeper layers of this complex scam. A key focus of the inquiry is to determine how these non-existent companies managed to acquire manufacturing status registrations without any physical presence.
Copyright Business Recorder, 2024
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