Munaf Kalia and Javed Khanani, directors of Khanani and Kalia International (KKI), the largest Foreign Exchange company of Pakistan, were arrested by FIA on the charges of money laundering and illegal money transfer of 10 Billion Dollars.
The main charge against them is that they were involved in ‘physical’ transfer of foreign currency from Pakistan and ran the illegal ‘Hawala or Hundi business’.
According to the News, Special Investigation Group (SIG) of FIA Lahore prepare a report in April 2008 about the flight of dollars from the country, fearing that a forex crisis would hit the country in the near future. The report also recommended strong and instant action against persons involved in the Hundi and Hawala business.
According to FIA officials, Lahore, Gujranwala, Karachi and Peshawar are the main cities where a majority of money changers were running the Hundi and Hawala business and anyone could send any amount anywhere in the world without any check.
FIA officials said during initial interrogation Javed Khanani has disclosed the names of some very influential people whose money he had sent abroad.
Today, the State Bank of Pakistan has suspended with immediate effect the license of Khanani & Kalia International (KKI) for a period of 30 days for violation of its (SBP) rules and regulations.
According to SBP, the exchange company, its head office, branches, franchises, payment booths and currency exchange booths have been debarred from undertaking any kind of business activity during the suspension period.
Talking to a TV channel, Forex Association of Pakistan President Malik Bostan said that the foreign exchange dealers bring eight billion dollars in the country everyday and such action against them was unjustifiable.
Bostan said that Munaf Kalia informed him that his company was not involved in Hundi or Hawala business, but the owner of Dunya Moneychangers, Faisal, who has taken the franchise of the Khanani & Kalia Company, was involved.
KKI, as per its web site, claims to be Pakistan’s first ISO 9001 and 27001 certified Exchange Company. They also have an online due diligence manual, Know-Your-Client Policy and a Franchise Policy.
It is quite alarming if, in spite of all certifications and operating procedures in place, KKI was unable to trace and stop the illegal transaction by its franchise. Also, what the State Bank of Pakistan was doing when the Dollar was elevated in open market from 70 rupees to 90 rupees within a span of few weeks.
The case of Khanani and Kalia is still in progress. We have to see if real culprits behind “flight of dollar” are taken to justice or this turns out to be another facade. The government and media have to be very cautious in handling of this case as any false move will further derogate the image of Pakistan abroad and amplify the ongoing financial crisis.
i they are doing good
its been two years since they have been in jail kindly i want a favour from you plz try to pull maas amount of people towards getting them released as soon as possible they dont know wht their children and wifes are going through plzzzz Allah will bless you so much make a big news so tht the whole world reads it atleas not the world but pakis do
Wow. Aabi was right about Khanani and Kalia, and almost everything else 28 months ago! Aabi, an investigative journalist, works for http://www.youtube.com/spsyed . Proud of you, Aabi. Thank you for your hard diligent work on too many other analysis and media assignments. Well done.
As per news report today, Khanai and Kalia are acquitted as no accusation was proed against them. They were kept in jail for 2 years. Are they going to sue the government for the loss of busniess and disrepute.
I am a student studying abroad.Its been years some of my tution fees money is stuck.I tried to approach everyone and have also filed the case, but no use.The government or court should atleast pass an order that people should get their money back.I know its quite tough for the organisations to make a responsible decission as everyone is busy making money.No one is there to serve the nation.
Comment on Khanani and Kalia arrested: Only the top 2,000 businessmen and politicians or the “ruling class” in Pakistan would transfer big money being claimed in the media. They will not be prosecuted, convicted and sentenced. Money market analysts suspect KKI’s political-business rivals are playing a game for the benefit of Mr 10% plus and his mafia gang, including interior advisor Rehman Malik (Mr oil for food UN-US scandal) who lectures 160m people and the global audience on “financial terrorism” which he links to “Afghan drug trade”! Does he know that trade is bred, fed, nurtured and protected by covert US agencies?
Due to oil price hikes in 2008 and other political corruptions, Pakistan reserves are down from over $16 billion to $4 billion. Lack of confidence in the corrupt Zardari-Sharif mafia style political-business alliance also reduced Karachi Stock Exchange (KSE) index by 41 per cent. Over a period of some 8 years, Shaukat Aziz created bubble economy boom, but so far in 2008 alone, the country has turned into a businessmen nightmare hell. That is nothing less than a remarkable miracle for the alliance that even Nawaz Sharif dare not topple.
The reserves and the KSE index fell due to massive reductions in FDI and the remittances. That also proves lack of confidence in the mafia. Those factors, therefore, have nothing to do with havala and hondi (HH) money transfer system, offering a variety of services including currency exchange, inward and out ward remittances, demand draft and travellers’ cheques. HH has been tried and tested over many centuries all over the world. It remains the most popular money transfer method from one city to bankless villages in South Asia. The HH system has proven to be more reliable, trustworthy, faster and much cheaper than “free market” glocal banking cartels who received $1 trillion in bailouts and handouts in return for complete submission to the big brother governments and their governors in more than 150 countries worldwide.
The arrest of Kalia and Khanani is politically motivated, and would dry up remaining foreign direct investment (FDI) to Pakistan, and reduce up to $7 billions annual remittances coming to Pakistan. Over 24 licensed HH exchange companies, including Khanani and Kalia International (KKI) to ISO 9001 standards that is something the government agencies cannot live up to. Who would dare and waste money on litigation costs in challenging shutting down licensed HH companies in the Pakistan kangaroo courts? The HH companies contribute over $7 billion annually to Pakistan’s foreign reserve, much more than the glocal banking cartels. In that context, the arrests of Khanani and Kalia, are politically motivated in order to divert public attention from the mafia’s schemes and failures, and with FIA threatening hostage taking, demanding ransom, updating exit control lists in a country where justice is dependent on kangaroo counts. Shaukat Aziz can learn a few more tricks from Zadari’s organised criminal gang that is busy monopolising cash flow to rape and loot Pakistan; hasten its meltdown, crippling its economy and any chance of recovery.