The Senate Standing Committee on Finance expressed its dissatisfaction with the State Bank of Pakistan (SBP) over its handling of the investigation into the trade-based money laundering of over Rs70 billion through the import of solar panels.
The committee, chaired by Senator Saleem Mandviwalla, met on Wednesday to discuss the issue for the third time, but found the latest report by the SBP to be inadequate and lacking in new information or progress.
The committee members questioned why the SBP was not sharing the full details of the case, when the Federal Board of Revenue (FBR) had already established the evidence of money laundering through the duty-free imports of solar panels.
A representative of the SBP told the committee that the banks involved in the case had been identified and penalised, but did not disclose their names.
The committee members, including PMLN’s Musadik Malik and Saadia Abbasi and PTI’s Mohsin Aziz, demanded that the SBP provide the complete information and the names of the banks to the Senate panel.
Senators also pointed out that the money laundering was a serious offence, especially at a time when the country was facing foreign exchange constraints and had to restrict essential imports.
Mandviwalla said he had been suggesting that the case should be referred to the Federal Investigation Agency (FIA) for a thorough probe, as the SBP was not giving a clear picture to the committee.
PMLN’s Malik said the FBR and Customs authorities had revealed that 63 importers had laundered money through over-invoicing of solar panels, but this was based on an audit of only 200 out of 450 importers. He said the total amount of money laundering could be as high as $2.5 billion if all the importers were audited.
Customs officials reiterated their earlier stance that they had started the investigation in October 2022 and found 63 importers involved in over-invoicing of solar panels, which were imported from China but payments were routed to the UAE or Singapore. They said the solar panels were not physically examined by the customs as they were duty-free items and only good declarations (GDs) were presented to the customs desks.
The FBR had reported that solar panels had emerged as a high-risk item for over-invoicing and trade-based money laundering due to their duty-free import status and the absence of sales tax on local supply.
They said the solar panels, which were imported at Rs72.83 billion, were sold in the domestic market at almost half the price, i.e. Rs45.61 billion.
Customs officials said they had registered cases against the major suspects, including Rab Nawaz and his wife of Bright Star Company, who were now on bail. Senator Mohsin Aziz said the Bright Star had laundered around Rs40 billion through two banks.
SBP is part and parcel of this scam, without the patronage of SBP , commerical banks cannot pull a stunt like this .