FBR’s arm files reference against billionaire benami company 

The Federal Board of Revenue (FBR)’s Anti-Benami Islamabad office has filed a reference against S.A.S Pvt. Ltd, a benami cooperate company which owned billions of benami assets in different cities of Pakistan.

The informed sources said that the ’ anti-benami zone-1 on Tuesday filed a reference against the S.A.S Pvt. ltd before the adjudication authority, bench-1 Islamabad. The company owned more than 50,000 kanals land in Attock, Mianwali, Jehlum, Chakwal, Rawalpindi, Sargodha, Muzaffargarh, Sialkot, Khushab, and Layyah and as per available record, properties were purchased in these cities for total consideration of Rs 1.9 billion.

The sources said that M/s Techno Engineering Services Pvt Ltd. hold benami properties in the name of M/s S.A.S Pvt. Ltd, whereas, the record provided by the Securities and Exchange Commission of Pakistan (SECP) reveals that M/s Techno Engineering Services Pvt. Ltd neither has held any shares in the benamidar company, nor has extended any loan to it.

The sources concerned said that the M/s S.A.S Pvt. Ltd, the benamidar, is a paper company with no employees of its own, and no independent business premises of its own. M/s Techno Engineering Services Pvt. ltd., the beneficial owner, uses it as a back door laundry to wash its dirty money minted through corrupt practices and evasion of tax. Two separate instances of “illegal benefit to the beneficial owner through this benami arrangement” i.e tax evasion and corruption, are put forth hereunder: 

The sources concerned said that the beneficial owner hoodwinked the tax authorities during the tax recovery from its accounts by using the benami accounts of the benamidar, in connivance and abetment with the bank manager of UBL, Blue Area Branch, Islamabad. This incidence of benami is important in establishing the criminal mens rea of both the companies (their directors and the company  secretary), and the bank manager for entering into benami transaction. 

It occurred during the period of June-July 2017, much after the date of promulgation of Benami Transactions (Prohibition) Act 2017 i.e. 17-02-2017. 

In addition, the Supreme Court of Pakistan through its judgment dated 30-03-2012 held in the Rental Power Plants (RPPs) corruption and fraud cases No. 7734-G/2009 & 1003-G/2010; and 56712/2010, that the beneficial owner through its subsidiaries (Techno-E Power and Techno Energy) derived financial benefits through corruption and corrupt practices from RPPs contracts. They were liable to civil and criminal actions. The  court had ordered to return money in the case of Techno E. Power, failing which a case would be registered against them with the Federal Investigation Agency (FIA).

Therefore, they were asked to return an amount of Rs 781 million and Rs 300 million on 18-01-2011 before the Supreme Court. The NAB chairman was also directed to proceed against them. In the investigation report dated 29-12-2014 by Deputy Director/IO (IW-1) NAB Rawalpindi, it is written that the accused Abid Ali entered in Voluntary Return u/s 25 of the NAB Ordinance “for an amount of Rs. 1912 millions out of which he paid 771 million, and defaulted with the rest of the amount and flew out of the country.”

Besides this, sources said that the company secretary of M/s Techno Engineering Services Pvt Ltd, Asif Mehmood represented as the company secretary of S.A.S Pvt. ltd. There is sufficient evidence to put forth that the beneficial owner provided consideration/payments and operated the benami accounts. The benami properties have been acquired and held in the name of benamidar from the consideration provided and paid by the beneficial owner for its immediate or future benefit. By this, it has avoided statutory dues and taxes, has defeated the provisions of Companies Act 2017, has cheated the public at large by concealment and can avoid payment to its creditors in future contingency settlements. 

In addition to above mentioned two instances, there are a number of reasons, and pieces of evidence narrated and substantiated with details in  Section III:  Proceedings; Analysis and Findings of this statement of the case. Therefore, on the basis of compelling reasons and evidence of incidence of Benami Transactions, it is referred that the respondent accused No.1, M/s S.A.S Pvt. Ltd held and continues to hold properties as benamidar defined in section 2(1)(9) of the Act, in violation of section 3(2) of the Act, after the commencement of the Benami Transactions (Prohibition) Act, 2017.

That the respondent accused no 2, Techno Engineering Services Pvt Ltd is the beneficial owner of the benami properties in terms of section 2(1)(11) of the Act. The impeccable sources said that when the respondents were accorded the opportunity during the proceedings to produce any such record of shares or loan arrangements, they could not produce any. Evidently, the beneficial owner company has created and used benami accounts of the benamidar. It has provided and paid consideration to the sellers of the properties and has created a smoke screen and layering of the benamidar against the law enforcement agencies, the creditors, and the tax authorities.

It is pertinent to mention here that the anti-benami zone-1 in December 2019 not only attached the largest-ever benami land of about 12,000 acres (95,603 kanals) in 10 different districts of the country but also freeze seven bank accounts of the benamidar firm through issuance of provisional attachment order and show-cause notice.

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The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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