The Federal Investigation Agency has withdrawn a corruption case filed against former Federal Board of Revenue (FBR) chairman Shabbar Zaidi, it emerged on Friday.

On Thursday, the FIA booked him over allegations of issuing unauthorised income tax refunds amounting to Rs16 billion during his tenure as FBR chairman. Sources said the FIA’s Anti-Corruption Circle had accused Zaidi of criminal misconduct, abuse of authority, and unauthorised disbursement of public funds.

According to the FIA, three private banks, two cement factories, and one chemical company were the beneficiaries of these refunds. The agency alleged that these entities were clients of Zaidi’s private audit and consultancy firm prior to his appointment as FBR chairman, raising concerns of conflict of interest.

However, a notification issued by the agency’s Karachi division on Thursday said: “The Director, FIA Karachi Zone, has been pleased to accord permission for cancellation of case FIR No. 32/2025 dated 29.10.2025 … as well as classification of case as ‘C-Class’ and submission of discharge report … against the then chairman FBR (1) Syed Muhammad Shabbar Zaidi.”