The Federal Investigation Agency (FIA) is investigating a series of suspicious deals involving Western Union (WU), Zarco Exchange Company Pvt Limited (ZECPL) and the State Bank of Pakistan (SBP) leading to a scandal labelled as biggest foreign currency scam in the history of Pakistan.
According to the Express Tribune, a case has been registered at FIAâ€™s Corporate Crime Circle Lahore police station, while non-bailable arrest warrants have been issued for Senior Joint Director Export Policy Department (EPD) of SBP Najumul Saqib.
FIA has also summoned Senior Executive Director EPD Asad Qureshi, Director EPD Muhammad Mansoor Ali, Additional Director EPD Moinuddin, WUâ€™s Country Manager Abdul Hameed Fareed, former country head Sobia Rehman and Senior Vice President Middle East and Africa (Western Union Financial Services, Inc.) Jean Claude Farah.
As per the rules of SBP, a foreign exchange company can transfer only 20% outside the country against the foreign remittances received in the country from abroad.
The investigation has revealed that ZECPL transferred 35% foreign exchange currency in connivance of some officials of WU and SBP.
As a result, the value of the dollar against the rupee has increased sharply, which caused heavy losses to the exchequer.
FIAâ€™s investigations also shed light on WU not paying a single penny in taxes despite it earning an approximate profit of Rs1.5 billion per year.
FIA officials familiar with the investigations claimed that if the accused are arrested and the requisite records are provided to the FIA, it would help cease the illegal transfer of foreign exchange abroad in the future.
However, the task has been made difficult for FIA as officials of EPD have refused to provide the required records, while the Ministry of Finance and the state bank have also barred representatives of WU from joining the investigation.
A commentor at Express Tribune has raised some pertinent questions on this forex scandal:
The investigation officers should also highlight:
1. The brother of ZECPL owner is EX- IG Punjab
2. When did Mr.Mansoor and Mr.Moiniuddin join EPD?
3. Is the complainant a citizen of Pakistan (i.e. does not hold dual nationality)? If yes, then when did he obtain the second citizenship?
4. Why were the same allegations on SBP shot down twice earlier?
5. What about the money owed by ZECPL CEO to the agents?
6. What about the tax evasion by ZECPL?
7. What did the CEO of ZECPL do before establishing ZECPL?
8. Why did Sobia Rehman leave Pakistan in 2010?
9. Why did Western Union give excess over limit to ZECPL (in the tenure of Sobia Rehman)?
10. Did Hameed Fareed have any previous experience in remittances prior to being appointed the Country Manager of WU-Pakistan & Afghanistan? If not then on whose behest was he appointed at this position? What is the character of Mr. Hameed Fareed?
Zarco Exchange Company is in habit of getting hit by FIA. In 2009, FIA raided and sealed 727 outlets of Zarco Exchange Company across Pakistan on account of money laundering and illegal remittances. At that time the raids were made on the complaint of the ZARCO Exchange Companyâ€™s Chief Executive Lakhte Husnain, who alleged that his employees embezzled money of his company through â€˜dummy accountsâ€™.
In 2008, Munaf Kalia and Javed Khanani, directors of Khanani and Kalia International (KKI), the largest Foreign Exchange company of Pakistan at that time, were arrested by FIA on the charges of money laundering and illegal money transfer of 10 Billion Dollars. The case is still unresolved.