• 80 companies implicated in Rs110bn money laundering scandal, Senate panel told
• SBP censured for its lack of cooperation in providing relevant data

ISLAMABAD: Startling revelations continued to unfold on Thursday before a Senate panel that confirmed more than Rs110 billion of fraud and money laundering in the garb of solar imports by more than 80 companies, some of which were found to be dummy entities.

The sub-committee of the Senate Standing Committee on Finance, led by Senator Mohsin Aziz, vowed to continue its investigation into the scandal and hold all those responsible accountable. The committee also criticised the State Bank of Pakistan (SBP) for its lack of cooperation in providing relevant data.

Officials from the Federal Board of Revenue (FBR) made key revelations of over-invoicing and trade-based money laundering through the import of solar panels. In one case, the FBR revealed that the owner of a particular company that imported solar panels falsely portrayed himself as a salaried individual in official documents. The company imported solar panels worth around Rs2.29bn and showed sales of more than Rs2.58bn.

On a larger scale, the FBR made startling revelations of over-invoicing and suspicious transactions, the Senate secretariat said. The tax authority’s officials told the committee that companies had transferred around Rs106bn for solar imports. A staggering Rs69bn worth of over-invoicing was detected during the investigation.

In total, the FBR has identified 80 suspicious companies involved in the solar import scandal. Of these, 63 companies, accounting for Rs69bn in transactions, were flagged for over-invoicing.

The FBR has filed 13 FIRs against the implicated companies. Further questioning revealed that several companies — such as Bright Star, Moonlight, Asadullah Enterprises and Smart Impex — were involved in over-invoicing.

Senator Mohsin Aziz demanded further clarification from one of the private banks involved with these companies’ solar import transactions, calling for transparency on the amounts transferred and the nature of their business activities.

FBR officials disclosed alarming information about the misuse of identity cards. Several individuals were found to have deposited large sums of money under false pretenses. One individual deposited Rs14 million in a bank but later denied the transaction, while another claimed he had never seen such a large amount in his life.

The committee also revealed that Bright Star, a company heavily implicated in the issue, falsely claimed to have imported solar panels at high rates and sold them at lower rates in the local market. FBR officials emphasised that Bright Star was a fake and bogus company involved in fraudulent solar import activities.

Further investigation uncovered that although solar panels were imported from China, the funds for these transactions were also illegally transferred to 10 other countries. Over Rs18bn was sent to foreign countries, which needed further scrutiny, the sub-committee decided.

Representatives from another private bank testified before the committee that Bright Star and Moonlight had made multiple transactions involving large sums. Bright Star had four transactions totalling Rs185m, all cash deposits. Moonlight had two transactions worth Rs49m.

Following this discovery, the bank issued suspicious transaction reports as required under the money laundering law.

In another case, the FBR revealed that Smart Impex, a company under investigation, had a declared paid-up capital of only Rs2,000. Despite this, it deposited over Rs1.54bn in cash, with total deposits reaching Rs3.39bn.

The sub-committee decided to hold further inquiries in the next meeting, but expressed concern about the SBP’s failure to provide necessary information on the solar import scandal despite repeated calls. However, SBP’s deputy governor assured the committee that all data related to solar imports would be collected and presented in the next meeting.

Published in Dawn, February 14th, 2025