ISLAMABAD: The Federal Investigation Agency (FIA) is wasting no time in the probe against the Securities and Exchange Commission of Pakistan (SECP), which was accused by the joint investigation team of tampering with the records of an investigation into a sugar mill owned by the Sharif family.
The four-member probe team, headed by FIA Anti-Corruption Wing Director Maqsoodul Hassan, began working on Friday, June 23, just before the start of the Eid holidays and continued its work on Saturday and Sunday. It picked up where it had left off on Wednesday, after a two-day Eid break.
The FIA team, which includes deputy directors Hazrat Ali, Ayaz Khan and Tahir Tanveer, have obtained a separate office on the SECP premises, near the chairman’s secretariat, and their first directive was to the SECP law department, asking their staff to be present during the holidays.
“The allegation of record tampering was basically levelled against the SECP, which is why the investigation has been initiated against the corporate sector regulator,” an FIA official told Dawn.
Sources in the investigation agency told Dawn that the FIA team was likely to complete its work at the SECP head office by Thursday afternoon, and records and witness statements would be scrutinised at FIA headquarters.
The team was formed on the directives of the apex court after the six-member JIT probing allegations of money laundering against the Sharif family reported to the Supreme Court that government departments were tampering with records and creating hurdles in its work.
Investigators looking into contradictory statements by SECP staff, top brass; JIT summons PM’s daughter
Sources in the FIA and SECP said that the team’s first order of business was to meet Muzzafar Ahmed Mirza, the commission’s chief prosecutor and head of its Prosecution and Legal Affairs Division.
Mr Muzzafar was asked to remain available during the holidays and ensure that officials of the law department were present, along with all the relevant records.
An FIA official Dawn the FIA team started its work on the same day as it was notified not only to save time, but also to maintain secrecy and avoid any hindrance in the investigations, referring to SECP Chairman Zafar Hijazi.
The accusation of record-tampering was levelled against incumbent Mr Hijazi, as it was alleged that he closed an inquiry of money laundering by Chaudhry Sugar Mills — owned by the Sharif family — with retroactive effect.
“The FIA officials came prepared and knew where to start. Within minutes of taking charge, Mr Arsalan, deputy director of the Enforcement Department, was called to answer some questions,” the official said. His interview lasted for more than four hours.
In its response to the JIT’s allegations, submitted to the Supreme Court, the SECP maintained that investigations against Chaudhry Sugar Mills were completed in 2013, before the incumbent government came to power.
But a startling revelation was made by Maheen Fatima, the current director of the Internal Audit and Compliance Department, before the JIT and the FIA team — that she had initiated investigations against Chaudhry Sugar Mills in 2011, but the case was closed in 2016
In her statement to the JIT, which was also repeated in front of the FIA team, Ms Fatima claimed that the investigation into money laundering by Chaudhry Sugar Mills was dumped in March 2013, at the time of the elections.
In view of these contradictory statements, sources said that those examined by the FIA team included Abid Hussain, who was heading the Enforcement Directorate in 2011 and is currently the executive director of the Corporate Supervision Department in the SECP’s Company Law division.
In addition, then acting SECP chairman Tahir Mahmood — who is currently working as commissioner of the Company Law Division — was also asked if the investigations against Chaudhry Sugar Mills were finalised in 2013 or not.
Another officer, Ali Azeem, who was executive director in 2016, told the FIA team that the Chaudhry Sugar Mills case was closed in 2013 and referred to the official statement submitted by the SECP to the Supreme Court.
But sources in FIA said that it was clear from the statements that after Mr Hijazi took over as the chairman in Dec 2014, he reshuffled executives in the commission and closed the sugar mills inquiry after the Panama Papers case surfaced.
This has made the SECP a divided house, since those related to the Enforcement Department maintain that the case was closed in 2016, while the official stance of the commission is that the case was closed in 2013.
The FIA team is expected to finalise and submit its report to the JIT on June 30 or July 1, 2017.
The JIT has also summoned the prime minister’s daughter, Maryam Nawaz Sharif, to appear before it on July 5, a move that the ruling party has termed as an “egoistic decision”, but has agreed to comply with the summons.
Ms Sharif will be the seventh member of her family summoned so far in connection with the ongoing investigation into money laundering allegations. The JIT summoned her brothers Hussain and Hassan on July 3 and 4, respectively. Hussain Nawaz has already appeared before the JIT five times since May 28.
Other family members of the Sharif family who have appeared before the JIT include Prime Minister Nawaz Sharif, his brother Punjab Chief Minister Shahbaz Sharif, the PM’s son-in-law retired Captain Mohammad Safdar and the PM’s cousin Tariq Shafi.
Sources privy to the development say the JIT would ask Ms Sharif about her offshore companies and her financial resources.
She may also be asked questions regarding the media campaign against the JIT in the newspapers, television channels and on social media, since there is an impression that she is leading the charge in this regard.
The JIT criticised the media for hampering its investigation in its report submitted to the apex court and highlighted comments made by 22 journalists, four politicians and three legal experts in 29 different talk shows.A PML-N leader told Dawn that PM Sharif had already decided to comply with every direction of the JIT, adding that this was the reason that both his sons Hussain and Hassan did not claim exemption, despite being non-resident Pakistanis.
He said that since Ms Sharif was currently in the UK to attend the graduation ceremony of her son, she would confirm her appearance after consulting her legal team.
He said that unlike PM Sharif and his sons, Maryam’s name was not mentioned in the operative paragraph of the SC’s April 20 judgement, therefore she was not expecting that the JIT would summon her.
The apex court verdict virtually cleared Ms Sharif from the controversy, stating that the PM’s daughter “has received cash gifts from her father in substantial amounts on various occasions… receipt of gifts from the father does not necessarily make respondent No.6 (Maryam Nawaz) his (Nawaz Sharif) dependent in the legal sense of the word.”
Her husband Capt Safdar also appeared before the JIT on June 24, but sources said that since the PM’s son-in-law left some questions unanswered, the team had issued a summons to his spouse.
On Wednesday, the JIT also examined the record received from the Habib Bank and Federal Board of Revenue (FBR). The Habib Bank provided records related to the loans which the Sharif family had procured for Hudaibya Paper Mills, while the FBR provided the team wealth statements and tax-related details of Sharif family members.
Published in Dawn, June 29th, 2017