A massive financial scandal has come to light in Khyber Pakhtunkhwa, with over Rs40 billion reportedly misappropriated from government accounts, leading to widespread investigations and the freezing of nearly 50 bank accounts, according to a report published by The News.
The fraud, which spans from 2020 to 2024, has raised serious concerns about the province’s financial oversight and has implicated several senior government officials and political figures.
The National Accountability Bureau (NAB) launched an inquiry after receiving credible information about financial irregularities in Upper Kohistan, where, despite an annual development budget of only Rs500 million to Rs1.5 billion, a staggering Rs40 billion was siphoned off.
The embezzlement occurred under the guise of contractor securities in the government account titled Security and Deposit Works KP 10113, intended for development projects and contractor payments. Investigators have discovered that the funds were withdrawn through forged documents, fake bills, and inflated project costs.
A particularly startling revelation during the investigation was the discovery of approximately Rs4.5 billion in the bank accounts of a dumper driver, who had set up a fake construction company to facilitate the fraud.
According to the report, NAB froze the accounts, which had seen nearly Rs7 billion deposited through suspicious transactions. The inquiry also uncovered the issuance of nearly 1,000 fake cheques from government accounts, with 50 account holders already identified.
Further investigations revealed that the Communication and Works (C&W) Department in Upper Kohistan, along with private contractors and bank officials, played a role in fabricating records, approving fake securities, and submitting false bills for non-existent projects. These actions flouted the General Financial Rules (GFR) and Treasury Rules, with the District Accounts Officer (DAO) approving unauthorized payments.
Despite the scale of the fraud, oversight agencies, such as the Accountant General’s Office and the Directorate General of Audit, failed to detect or prevent the manipulation, raising questions about the effectiveness of the province’s financial controls.
To preserve evidence, records from the District Accounts Office, C&W Department, and a local bank have been seized. NAB has also frozen additional accounts worth Rs10 billion and issued 30 notices for questioning, including to 14 bank officials and officers from the DAO, C&W, and other key departments. NAB’s investigation into this complex case is ongoing, with further revelations expected.
Provincial Finance Advisor Muzzammil Aslam expressed shock over the scale of the embezzlement and confirmed that contractors were not required to submit such large security deposits. He also stated that the issue did not arise during his tenure, but emphasized the need for a thorough investigation into the matter.
