KARACHI: The administrative judge of the accountability courts on Tuesday admitted a reference against 12 suspects pertaining to alleged corruption of Rs417.409 million through illegal tax duties’ exemption.

Judge Abdul Ghani Soomro admitted the reference and sent the same to the Accountability Court-III for initiating trial and disposal according to the law.

The National Accountability Bureau filed the reference against then deputy director of the Board of Investment (BoI) Adil Karim, then director Mohammad Ayub, ex-director Mohammad Muslim, then deputy director of the Directorate of Internal Audit (Customs) Fahad Ali Chaudhry, then director Naeem Ajaz Qureshi, ex-Member (Indirect Taxes Policy) Federal Board of Revenue Mehmood Alam and ex-Commissioner Inland Revenue Sikandar Aslam.

NAB says suspects fraudulently availed tax exemptions after getting a Rs55bn KPT contract

It also named Byoung-Ho Kim, ex-CEO/ representative director of M/s Ssangyong Engineering and Construction Company Limited of Korea, its chairman/CEO S Joon Kim, country manager Ki Tae Heo, project manager Chun-Yong Bog Chun and manager (admin, finance and procurement) Hye Sung Seo as suspects.

NAB mentioned that it had received complaints from Transparency International Pakistan against Ssangyong Engineering and M/s Usmani Associates Joint Venture for their alleged involvement in tax fraud and causing losses to the national exchequer. An inquiry was authorised and subsequently converted into an investigation on April 30, 2015.

It stated that the investigation revealed that the Karachi Port Trust had invited tenders from experienced international civil engineering contractors with previous experience of similar marine and harbour structure works for their pre-qualification for the project of reconstruction of berths and special repair berths (SRBs) at the East Wharf.

It mentioned that both the Korean and local companies were pre-qualified to bid for the project, adding that all the taxes, duties and other levies’ payment were included in the bid cost.

The joint venture was evaluated as the lowest responsive bidder and was awarded a contract at the cost of Rs55.15 billion by the Board of Trustees of the KPT and the contract agreement was signed on Jan 28, 2018.

The investigation further revealed that the representatives of Ssangyong Engineering and now late managing director of Usmani Associates Ahmed Ghazi Usmani in alleged connivance with BoI directors had fraudulently and illegally availed tax exemption under SRO (575I1) 2006 with respect to customs duty in excess of five per cent and whole of sales tax in contravention to clause 8.2 and sub-clause 8.2.1 of the Investment Policy of Pakistan, 1997.

It alleged that then BoI deputy director Adil Karim failed to exercise due diligence to scrutinise the application within the parameters of Investment Policy which required foreign investment of minimum set amount to be eligible for the exemption availed under the SRO though the firm did not bring any foreign investment and the project was entirely financed by the KPT.

He also allegedly deliberately failed to ignore the fact that the contract cost was inclusive of all taxes, duties, levies and with criminal intention processed the case for exemption under the SRO to the FBR without conducting any verification of information and documents due to which government exchequer was deprived of taxes worth Rs186.351m.

NAB alleged that the suspects, including foreigners, in connivance with each other caused a total loss of Rs417.409m to the exchequer, thus they committed offence of corruption and corrupt practices as defined under Sections 9(a), (iv), (vi), (vii) and (xii) punishable under Section 10 of the National Accountability Ordinance, 1999.

Published in Dawn, March 10th, 2021