FIA claims Rs16 billion loss from Karachi Cotton Exchange, issues notices to directors

The Federal Investigation Agency (FIA) has estimated that the historic Karachi Cotton Exchange building’s “illegal occupation and commercial exploitation” over the years has caused a loss of Rs16 billion to the national exchequer. Notices have been issued to current and former directors of the Exchange as part of the recovery process.

The Anti-Corruption Circle of the FIA Karachi, in a notice dated March 12, named officials associated with the Evacuee Trust Property Board (ETPB), Karachi Metropolitan Corporation (KMC), and Karachi Cotton Association (KCA) in connection with the case. The probe concerns the misuse of the federal government-owned building in Serai Quarters.

Investigators have uncovered evidence of “fake and forged ownership and tenancy documents,” along with illegal tenancy transfers through informal arrangements known as “Pagri.” The FIA is also examining the financial gains generated from these activities.

As part of a parallel inquiry under the Anti-Money Laundering Act 2010, the agency has sought detailed banking records from all commercial banks, including local and foreign currency accounts, transaction histories, account opening documents, and any Suspicious Transaction Reports (STRs) or Currency Transaction Reports (CTRs). While the deadline for submission was March 16, no responses have been received from the accused, which include prominent businessmen such as Khawaja M. Zubair, Amin Hashwani, and Faisal Nasim.

The FIA’s investigation aims to determine responsibility for the illegal occupation and explore potential money laundering networks linked to the property. The Exchange has remained sealed by the FIA and ETPB for the last 110 days, preventing the Karachi Cotton Association from issuing spot rates.

The closure has affected thousands of employees and disrupted cotton trading worth millions of rupees daily. Around 5,000 workers and 320 registered cotton brokers have reportedly been left without work. The affected parties have appealed to industry bodies, including the All Pakistan Textile Mills Association (Aptma), Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Karachi Chamber of Commerce and Industry, Pakistan Cotton Ginners Association, and Pakistan Cotton Brokers Association, seeking intervention to resolve the crisis.

Despite ongoing appeals and a pending verdict from the Sindh High Court, authorities have continued to issue notices, demand documentation from tenants, and claim heavy fines, prolonging the disruption of business activity.