ISLAMABAD: Chairman Federal Board of Revenue (FBR) disclosed on Wednesday that the tax department registered a First Information Report (FIR) against two importers on the allegation of money laundering. These importers were able to do it in the import of solar panels worth Rs 69 billion.
This information was revealed in the meeting of the Senate’s Standing Committee on Finance and Revenue. The meeting was held under the chair of Senator Saleem Mandviwalla.
The Committee showed displeasure over the absence of Caretaker Finance Minister as she was supposed to brief the committee on the economic situation and challenges faced by Azad Jammu and Kashmir (AJ&K).
The Chairman of the Federal Board of Revenue (FBR) and his team, shedding light on reports of massive money laundering worth Rs 69 billion by Solar Panel Importers said that as a result of the audit, two FIRs have recently been lodged against M/S Bright Star Business Solution (Pvt) Ltd and M/S Moonlight Trader (SMC) Pvt Ltd as these two importers were involved in over-invoicing, obstruction of audit, and using illicit funds for imports in violation of Customs Act, 1969.
He said that out of the total solar panel’s imports of Rs 69 billion, only Rs 45 billion were sold in the market.
The committee was informed that solar was imported from one country and payment was made in another country. Another official of FBR told the committee. For such payments it is necessary to get an NOC from State Bank Pakistan (SBP), a requirement that the importers did not comply with.
The committee was told that a strict action will be taken against the elements involved in the scam under the Anti-Money Laundering Act
Senator Mohsin Aziz said that Solar was imported at a time when our foreign exchange reserves were extremely low and the role of banks is also important in the entire scandal.
The Committee sought details of all the banks involved and vowed to pursue the matter with the State Bank of Pakistan and all relevant authorities for swift resolution.
The Chairman Committee also directed the FBR to continue action under the Anti-Money Laundering Act (AML). Furthermore, the Committee extensively discussed the status of the SME bank.
Expressing dissatisfaction over the decision to wind down the SME bank, the Committee urged the Finance Secretary to encourage SME lending and explore alternatives. They stressed the importance of a collaborative effort among stakeholders to pinpoint the causes of the bank’s downfall and work towards its revival.
The Secretary Ministry of Finance stated that he would come up with the observation of the committee after consulting SBP and other concerns.
During extensive discussions, the committee delved into the pressing issues faced by the people of AJ&K, with insights provided by the AJ&K Prime Minister. In response, the Committee established a sub-committee, led by Senator Saadia Abbasi, to resolve the issues pertaining to Hydel, budgetary and other Financial topics. A unanimous commitment to prioritize and address AJ&K’s issues was reiterated by the Committee.
Senator Mandviwalla emphasized, “We stand in with Kashmir and will exert every effort to address the challenges faced by AJ&K.”
Additionally, the private member Bill called,“ the State Bank of Pakistan (Amendment) Bill, 2023”, moved by Senator Mushtaq Ahmad was disposed off while discussion regarding the non-payment of compensation to the affectees of Mohmand dam was deferred due to the absence of the mover, Senator Hilal Ur Rehman.
A matter related to the non-payment of a subsidy amounting to Rs. 29 lacs was brought forward by the Co-owner of Al Madina Flour Mills. The Committee discussed this issue and recommended that the Finance Ministry escalate the matter to the State Bank of Pakistan, providing an update to the committee within 15 days.
Briefings on the “Deposit Protection Mechanism” and a “Rs. 5 billion fraud in Bank Al-Habib Faisalabad” were regrettably deferred due to the Governor’s prior engagements.
I wonder which banks were used to open these over-invoiced LCs. They should be fined to a great extent to ensure this does not happen again.