Millions embezzled from Khyber Pakhtunkhwa World Bank project

A financial scandal has been uncovered in Khyber Pakhtunkhwa (KP), involving the embezzlement of over Rs106 million from the World Bank-funded Human Capital Investment Project (KP-HCIP), The News reported.  

The fraud, which appears to have involved sophisticated forgery and possible collusion with a government bank, came to light after funds were withdrawn from the project’s official account despite the provincial finance department freezing all project funds.

The funds, withdrawn on July 3, 2025, were from an account that had been suspended by the provincial government on June 25, 2025, to prepare for the new fiscal year. Despite this, a significant amount was cleared by the bank using fraudulent cheques and authority letters. 

According to the report, the fraud involved the clearing of three cheques totaling Rs106,044,579 from the project’s “Revolving Fund Assignment Account” (No.0386004174006254) on July 3, 2025, through the Peshawar Cantt Branch. The cheques—Nos. 1326903725 (Rs48,760,245), 1326903733 (Rs55,320,306), and 1326903733 (Rs1,964,028)—were allegedly cleared using fake authority letters, all bearing the same reference number (PMU/KP-HCIP/EASED/Release/2025 dated June 20, 2025). 

The Project Management Unit (PMU) of KP-HCIP has confirmed that these letters were never issued by them or attested by the Accountant General’s Office of Khyber Pakhtunkhwa.

The fraud was discovered by the project staff, who confirmed that no new cheque book had been applied for in recent months and that they had never seen the cheque book from which the fraudulent cheques were issued.

The PMU, upon discovering the irregularities, contacted senior officials at the government bank, urging them to investigate the fraud through the Federal Investigation Agency (FIA) and recover the stolen funds.

A regional executive operations officer from the bank confirmed that the complaint had been received and an inquiry was underway.