Karachi-based ghost manufacturing unit allegedly involved in Rs2.4bn money laundering, Rs218mn tax evasion

A ghost manufacturing unit in Karachi has allegedly orchestrated a massive money laundering scheme amounting to Rs 2.4 billion, alongside siphoning off over Rs 215 million in tax revenue through false tax exemptions, according to a news report. 

As per official documents, the financial fraud was uncovered by the Pakistan Customs’ Post Clearance Audit (PCA) South, following reliable intelligence that triggered a detailed investigation in March 2025. The probe, led by Director PCA South, Sheeraz Ahmed, focused on a Karachi-based company that was using its so-called manufacturing status to exploit the system.

The PCA South team initially detected several discrepancies in the company’s records, which were confirmed during a physical inspection. The so-called manufacturing unit, located at the reported address, was found to consist of small rental weaving units, devoid of any actual embroidery machinery. Occupants at the location denied any connection with the company, and electricity records revealed a disconnected meter and minimal power usage, further supporting the fraud allegations.

Additionally, the company’s registered office was discovered to be a mere shop, featuring only a plastic chair and table, and rented out to a clearing agency. The agency failed to provide any information about the whereabouts of the company’s owner and lacked documents confirming its operational status.

The investigation revealed that the company, which lacked a real manufacturing facility, had been falsely claiming its manufacturing status to take advantage of tax exemptions and reduced import duties. The firm was also found to be involved in the local sale of imported embroidery machines and other equipment.

Moreover, the volume of imports linked to this company was disproportionate to its financial position, prompting the PCA to extend the investigation into potential money laundering activities. 

The inquiry uncovered a series of illicit import financing activities worth Rs 2.4 billion across 135 declarations, resulting in an estimated tax and duty evasion of Rs 218 million. The company had systematically exploited manufacturing tax exemptions to avoid substantial duties.

A formal case has now been registered, and the investigation is ongoing to apprehend all individuals involved in the fraudulent operations.