On the 18th of June, police walked into the home of Farha Mazhar. Save a few nervous-eyed servants, the home was empty. The police walked through to the bedroom of Farah where the bedsheets had been changed on a bloodsoaked mattress and a hurried, nervous, cover-up had taken place in a ransacked room. Outside in the backyard, two firearms had been buried in a shallow ditch.
Farha herself was at a hospital – being declared dead of a gunshot wound to the abdomen. Her husband was nearly 8,000 miles away in the United States – escaping a financial fraud investigation of the National Accountability Bureau (NAB).
Farha had been taken to the hospital by her son Fahad Mazhar and a servant. At the hospital, Fahad had told the medico-legal officer and doctors that his mother had committed suicide. But as police soon started to uncover, Farha Mazhar had not committed suicide. She had been murdered – shot in cold-blood by her own son. Fahad Mazhar had wanted to marry their house-maid Razia. An argument with his mother over the matter had escalated to a scuffle, which in the presence of firearms, had resulted in the gory incident.
Thus came to an end the life of another of Seth Abid’s children. Farhah Mazhar was the daughter of the legendary gold smuggler who passed away last year. More than a decade-and-a-half ago, Farha’s brother and the heir to Seth Abid’s fortune, Seth Hafiz Ayaz Ahmad, had been gunned down by a lone-wolf security guard with a vendetta.
How did this come to be the lot of the family of one of the richest men in Pakistan – a man who was famously once the largest property owner in all of Lahore? The tragedy of the house of the Seths is steeped in crime, passion, and a sense of divine judgement that would be befitting of the Bard. And all of it is entangled in the world of financial crime and high-stakes smuggling.
To understand all of it, we will need to go through the world of Seth Abid. We will need to travel through the high grasses of the Indian border near Kasur, from where he got his start smuggling gold, all the way to the high seas between the Gulf and the Karachi coast – which he eventually made his trademark smuggling route.
But first, we must look at events closer to the present. And for that, we have to go back to 2017, when things really started going south for the now murdered Farha Mazhar and her family. When her husband, Mazhar Rafiq, ran away to the United States with more than a billion rupees to escape a NAB investigation.
The broker that broke trust
We’re going to get to Seth Abid, we promise you. But before we do that, let’s talk a bit about the stock exchange. In December 2016, something happened to the Pakistan Stock Exchange (PSX) that most Pakistanis did not even clock. A Chinese consortium won the bid for a 40% stake in the Pakistan Stock Exchange (PSX) with an amount of Rs8.96 billion or roughly $85.5 million, translating to Rs 28 per share.
For anyone outside the ambit of the world of brokerage houses and stock investments it was a passing piece of news. For those knee deep in the world of the stock market, however, it meant big changes.
You see, while you can make money off the companies listed on any given stock exchange, the stock exchange itself is also a business. Internationally, the ownership of major exchanges is a mixed bag ranging from publicly-traded companies to government ownership. But stock exchanges usually have CEOs, shares, business interests, and services that they offer in exchange for money.
Stock exchanges allow investors and traders to make money by providing them a marketplace for trading securities. They also allow companies to raise money by listing different kinds of securities. For providing such services and marketplace, exchanges collect transaction fees from market participants and companies. Exchanges also offer various products and services used for trading and related activities – and they charge for all of them.
In Pakistan, while it is tightly regulated by the securities and exchange commission, it is very much run with the purpose of profitability. That means when the Chinese Conglomerate, which includes companies like the Shanghai Stock Exchange, Shenzhen Stock Exchange, Chinese Financial Futures Exchange Company Limited, Pak-China Investment Company and Habib Bank Limited, bought a managing stake in the PSX, they came in with the intention of tightening how the PSX ship was run and making money off of it. That meant cracking down on the significant presence of financial crime on the stock exchange.
The PSX itself is a relatively new concept. Up until 2016, stock trading on Pakistan was done on three different floors – the Lahore, Karachi, and Islamabad stock exchanges. In 2016, the government decided to merge the three through an act of parliament. Despite the merger, the PSX did carry forward some of the baggage of the KSE, LSE, and ISE – all three of which were outdated, sluggish, and largely allowed traders to run rife and maintain very little oversight.
So when the new Chinese management took over, heads began to roll. Within a couple of months of taking over, three major scams were uncovered by the new management’s watch dogs. Among them was MR Securities – a brokerage house owned by Mazhar Rafiq, who is the son-in-law of Seth Abid and the husband of the now deceased Farha Mazhar.
The anatomy of a fraud
What did Mazhar Rafiq do? It was pretty simple actually. There were no elaborate ponzi schemes and no hacks or high-stakes heists. Rafiq simply preyed on those that knew and trusted him, and then very quietly ran away with more than a billion rupees worth of their investments when the new PSX management came knocking on his door.
As the son-in-law of Seth Abid, he had a certain amount of social capital. And more than social capital, he had the illusion of wealth about him. Rafiq drove around in fancy cars, he vacationed abroad with his family, and he was fond of hosting. His wife Farha was a formidable lady. A person close to the couple, and also one of the victims of the scam that Rafiq ran, described her as hard-nosed with an air of power about her. “She walked, talked, and acted like the daughter of Seth Abid. She was self-assured, stiff-necked, and outspoken,” they said.
“I remember being at a function with Farhah where Moin Akhtar was performing. In his classic style, Akhtar began to mimic the pashtun singer Attaullah Eesakhelvi. Farhah got so mad she stood up and began telling Moin Akhtar to stop making fun of a national asset. It was a private function, so everyone including Moin Akhtar knew who she was. Her reaction was a bit over the top but her voice was calm and the silence in the event hall was deadly. That was the measure of the woman.”
Together, Mazhar Rafiq and his wife Farha made a formidable couple that ran in high-end circles of senior corporate executives and business people. His brokerage house had started as a small operation. Mazhar was not a particularly smart investor or expert of the stock exchange, but he was a smooth talker. He convinced a large base of his own friends and acquaintances to park their investments with him at MR Securities.
“Mazhar’s whole schtick was convincing people that they would not lose their money because he was a believer in safe investments. He would say it was better to invest large sums of money in safe investments like government bonds rather than less money in riskier ventures. A lot of the people he convinced were his friends and in the same age-group approaching middle-age. They had savings and many of us parked all of them with Mazhar,” says another victim that was close with Mazhar and the deceased Farhah.
This was a common theme from the victims of Mazhar’s fraud. Most of them were investing a large chunk of money, they were investing it with the knowledge that others like them had done so, that Mazhar’s company was successful. “Nobody even thought that he would run away with the money. After all, why would Seth Abid’s son-in-law need to run away with anyone’s money,” says the earlier mentioned victim.
But that is exactly what Mazhar did. In fact, his fraudulent activities had been going on for many years. Remember how we mentioned earlier that the PSX had carried forward some of the baggage from the lawless times of the Lahore, Karachi, and Islamabad exchanges? “In 2015, Mazhar Rafiq had actually been aided by Lahore Stock Exchange front line regulator and Chairman Khalid Mirza in avoiding an inquiry into his brokerage house. These kinds of assists from friends, however, could not last very long. When the new stock exchange arrived, things started to unravel,” mentions the earlier mentioned victim.
Around late 2016, some of the investors in MR Securities were looking to get their spoils and pull out of the venture. Initially, they were not worried when Mazhar delayed returning the money or tried very hard to get them to keep their money parked with him. When the investors persisted and Mazhar did not come through with the goods, the first signs of trouble began to appear. And right on the heels of this, the new Chinese management at the PSX was sniffing out a new fraud every second day.
In February 2017, Mazhar’s phone suddenly went off. Investors tried to contact him but he simply left a message to all of them – he was making himself unavailable to his clients and that he was under investigation by the SECP. This naturally caused his investors, many of whom had not known about this, to panic. However nothing could work, because a week before all of this came to light, Mazhar Rafiq had fled the country and gone to the United Kingdom. He had locked his office, destroyed evidence, and run away with his clients’ shares and cash in his custody.
What unravelled from this point onwards was a mess to put it mildly. The SECP blamed the administration of the PSX, which said in turn that they had just taken control of the situation and it was because of the oversight of the new management that MR Securities along with MAM and AJW were also apprehended. Mazhar Rafiq’s brokerage house had been, as the SECP explained, had been involved in off-system, illegal, ‘badla’ financing.
Badla trading involves buying stocks with borrowed money with the stock exchange acting as an intermediary at an interest rate determined by the demand for the underlying stock and a maturity not greater than 70 days.
Essentially, it is a system in which a brokerage house gives a loan to an investor wanting to invest in certain stocks if that investor does not have enough money at the time. For example, X has bought a stock and does not have the funds to take delivery, he can arrange a financier through the stock exchange ‘badla’ mechanism. The financier would make the payment at the prevailing market rate and would take delivery of the shares on X’s behalf – meaning that they owned the shares.
Mazhar Rafiq did this illegal practice to death, both for third parties that approached him and directly with some unknowing clients of his own. It ended up with him having complete ownership of the shares of his clients. In this way, his victims were also victims of a system at the PSX that allowed stockbrokers to hold custody of clients’ shares and cash.
All in all, Mazhar Rafiq managed to flee the country with cash and shares worth over PKR 1.2 billion – leaving saving-less more than 600 families, some of which included senior citizens, widows and terminal patients. But what led the son-in-law of one of the richest men in Pakistan to swindle his clients out of that much money? Was it simply greed, or was it because the house of the Seth was in disarray and Mazhar was trying to fend for himself and his family.
The weight of the Seth
Let us, for a moment, step back from the financial crimes of Mazhar Rafiq and his MR Securities and look at the bigger picture. The life and times of Seth Abid have been chronicled by this publication in a detailed obituary published last year.
But to put it briefly, the Seth came from nothing. Born to a family of traders in the business of transporting animal hides in Kasur, little is known about his early life. Originally, however, the family had been from Calcutta, and had links to the gold trade in Delhi. The family narrowly avoided the violence of partition, and in 1950 Seth Abid’s father moved his family to Karachi and re-entered the gold business.
As it turned out, the newly-born Pakistan had no gold mines but still had a huge cultural appetite for gold. With their family links in Calcutta and Delhi, Seth Abid’s father put him under the wing of seasoned smuggler Abid Bhatti, who took the young man on trips through the tall grasses of Kasur between the India and Pakistan border smuggling gold. Seth Abid soon made a name for himself, and when the border became more tightly regulated he switched to smuggling gold from the gulf through sea routes.
His life is storied to say the least and mythicised to put in bluntly. From smuggling nuclear equipment to kidnapping Benazir Bhutto, the myths around the Seth’s life grew and the fantastical stories around him turned him into a near mythical Robin Hood figure. Of course, there was only so much gold smuggling that could be sustained over time. Over the decades, as the coast became tighter and the Pakistan Navy and Coast Guard exerted more control on smuggling, Seth Abid had shifted his business interest from smuggling to real estate.
Eventually, Seth Abid diversified and became one of the most influential real estate developers in the country. While the story may have started with gold, this is where it would end. It was also through this route that his family met its first tragedy. His son, Seth Ayaz Ahmad, was a real estate prodigy and had run many successful projects for his father.
In 2006, Seth Hafiz Ayaz Ahmad was travelling to inspect a real estate project owned by his father Seth Abid. Seth Ayaz had long been the golden son of the Gold King of Pakistan. He had, of course, not gone through the christening of bullets and high-speed chases that his father had seen in his decades of smuggling gold into Pakistan. While he may not have had a storied life like his father, he was competent and his path to taking over Seth’s business was a clear one.
Most of Seth Abid’s children were born deaf, a disability that led to Seth Abid to found the Hamza Foundation for deaf and dumb children. The only children other than Ayaz that were not differently abled were Farha Mazhar and a second sister. Farha and her husband could not conceive children of their own, and while they adopted two sons and a daughter, Seth Abid was very clear that Seth Ayaz would replace him as the head of the family.
That is until he was mowed down in a hail of bullets. The official reports say he was killed by a lone-wolf security guard suffering from schizophrenia at the real estate project he went to inspect. Others have whispered that Ayaz’s death was a hit-job — an old enemy coming for payback or a rival party vying for control. Whatever it was, Seth Abid was not the same man from that day forward.
“Ayaz’s death broke Seth Abid. The father and son were close. They were always side by side and discussing business. In fact, Seth Abid was supposed to be with his son that day, but a last minute change of plan meant he went alone. After that, he withdrew from life. He stopped taking an interest in the family, in the business, and in other matters. He was still very much around, but old-age and his son’s death took all ambition out of him,” says one family friend that was close to Seth Abid.
From that day onwards, Seth Abid let go. His formerly neatly trimmed beard became unkempt, his public appearances grew rarer and rarer, and in one of his last photographed appearances, he met Prime Minister Imran Khan looking frailer than ever before. As Seth Abid slipped to old age and personal tragedy, his attention towards his daughter and the rest of his family waned. It was at this time that his son-in-law, Mazhar Rafiq, began becoming bolder regarding financial decisions.
One particular sticking point, for example, was a large tract of land nearly six acres in size that Seth Abid had given his daughter in the middle of Defence Housing Authority in Lahore – right next to the housing society’s W block. As explained by a source in NAB, the land was worth a lot of money, particularly because DHA wanted control of it so they could expand. Mazhar Rafiq wanted to sell that piece of land, and even though Seth Abid was against it he continued to strike deals.
This, of course, is one explanation – the one given by those once close to Seth Abid. That he had withdrawn from the world and that a bad-egg son-in-law used his name and status to swindle people out of their hard earned money. Some of the investors whose money Mazhar ran away with claim that the story is very different. “I have thought from the very beginning that Seth Abid was involved. The way Mazhar Rafiq ran away, it could not have been without the help of someone influential like Seth Abid. There had also been serious allegations that MR Securities was actually being used by Seth Abid to launder a lot of his black money,” says one of the earlier mentioned sources who was also a victim of Mazhar Rafiq.
About that murder
So here is where we are in February 2017. Mazhar Rafiq, the son-in-law of Seth Abid, has run away with his investor’s money and is not planning on returning. His wife and their three adopted children are still in Pakistan, where they are facing a grilling by NAB and the local police.
His wife, Farha Mazhar, is protected to a great extent by the influence that her father Seth Abid still wields. Despite this, a humiliating journey begins. Mazhar Rafiq’s picture and ID card are printed in newspapers, he is decried by the SECP, and his victims are assured by the regulator and the stock exchange that they will be compensated and that Rafiq will be extradited and brought back to Pakistan for justice.
Affectees went to NAB and the PSX to record their claims. “Sometime later, the affectees were informed by the PSX that the total verified claims amounted to PKR 1.2 billion and the process of recovery and refund would start soon. Regrettably, very little progress has been made so far and the affectees continue to suffer in agony about the fate of their investments,” wrote Naveed Ather Sheikh, a victim of Mazhar Rafiq’s fraud, in a letter to the editor published in Dawn in June 2021 after the death of Seth Abid.
“As regulators and guarantors, both the Securities and Exchange Commission of Pakistan (SECP) and the PSX failed in their duty to safeguard the interests of the investing public. So far, a miniscule compensation of about two per cent of the approved claim amount has been made by the PSX to the affectees out of its investor protection funds. More than two years have passed since this last update. No progress has been made so far while the affectees continue to suffer in agony.”
“Things started to fall apart quite quickly. Farha bore the social backlash of her husband’s crimes while he was out in the UK and unable to return. She continued to claim her innocence but suddenly the family was carrying the mark of this issue. Their financial situation did not particularly deteriorate, but within each other a lot of scuffling began to arise. It was also around this time that Fahad Mazhar began an affair with his household maid, as the police are now claiming, and which culminated in this tragedy.”
A police spokesperson has confirmed to Profit that they have not spoken to Mazhar Rafiq regarding his wife’s murder and that a financial angle to the crime is not being considered. “Fahad Mazhar tried to portray the whole story as a suicide, however, it was his brother who lived seperately with his own family who told us there had been issues between Farha Mazhar and her other son. We are not sure whether Farhah Mazhar was shot accidentally during a scuffle or as part of a plan, but the evidence very strongly points towards it being a crime of passion.”
This, of course, does not change the fact that the fate of the Mazhar family was tossed on its head after the exposition of the financial crimes of Mazhar Rafiq. The family underwent great stress, became social pariahs in a lot of their circles, and particularly after the death of Seth Abid in January 2021 were left entirely rudderless. While the murder was definitely personal business, the entire lives of Seth Abid and his family have been covered top-to-bottom in what seems to be a neverending cycle of crime, violence, and huge sums of money. It is a stark if gory reminder that the business of money can be a dangerous one, and that the implications of the financial very regularly bleed into the personal. And it is as much a tragic anecdote as it is a lesson.