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.
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.