FBR probes alleged Rs23bn money laundering case linked to Bahria Town

The Federal Board of Revenue (FBR) is conducting an inquiry into Vicky Trading Pvt. Ltd., a trading company, for purported connections to Bahria Town, a prominent real estate developer, involving alleged money laundering and tax evasion amounting to Rs23 billion.

Documents obtained indicate that the inquiry is active at the special court of customs, taxation, and anti-smuggling under the Anti-Money Laundering Act (AMLA) 2010, following allegations that Vicky Trading Company managed 18 different bank accounts nationwide, according to a news story, published in Dawn.

The investigation initiated on July 1, 2019, was prompted by a complaint from Mohammad Ejaz, an Inspector of Intelligence and Investigation (Inland Revenue) at the FBR.

The complaint alleged that the directors of Vicky Trading Company were involved in purchasing land on behalf of Bahria Town, leading to suspicious account activities indicative of money laundering and tax evasion.

The inquiry revealed that between 2014 to 2018, Bahria Town transferred Rs319 billion into the accounts of Vicky Trading, raising questions about the economic rationale behind these transactions.

Despite the company's assertion that it engages in trading and holds land for other entities, it reportedly has not purchased land in its own name using the transferred funds.

The investigation also highlighted the company's unusual operation structure, with no employees on its payroll, suggesting potential tax avoidance and the masking of financial transactions.

The FBR's preliminary findings resulted in show-cause notices to the accused under AMLA 2010, pointing to discrepancies amounting to Rs82.825 billion and a subsequent demand of Rs23.541 billion from Vicky Trading.

The company, in its defense, argued the investigation exceeded its scope by examining records before 2017, despite AMLA stipulations, and claimed harassment.

The trial involves Waqas Riffat, Waseem Riffat, Bilal Bashir, and Mohammad Awais, directors of Vicky Trading Company, presided over by Special Judge Syed Irfan Haider.

However, proceedings are advancing slowly, with notices issued to the accused but no significant progress reported.