LAHORE, Jan 27: Illegal foreign currency transactions worth over $1.2 billion have so far been unearthed in the ongoing probe into the Khanani and Kalia (K&K) financial scam, interior ministry sources told Dawn on Tuesday.

Sources said the foreign exchange company had made these transactions through the modes of hawala and hundi during the last two-and-a-half-year. “The company secretly made the transactions primarily to save 15 per cent of the foreign exchange it had to deposit with the State Bank of Pakistan (SBP) under the rules, thus caused a shortage of foreign currency in the country,” they maintained.

The Federal Investigation Agency (FIA) has been investigating the scam and is likely to complete the process in a month or so. FIA officials have been ‘tightlipped’ over the progress into investigations reportedly on the directives of the federal government.

The FIA on Nov 8 last year had raided the offices of the K&K in Lahore, Gujranwala and Karachi and arrested their directors and some employees, and seized the record for ‘illegally’ transferring foreign currency from Pakistan. The ‘flight of capital’ from the country was said to be the reason behind the ‘swift’ action of the agency.

Following the raids, the SBP had suspended the licence of the company which used to carry out ‘40 per cent’ of all money exchange transactions in the country with 24 branches and nine franchises.

Sources further informed the agency had examined 44,000 transactions the company made through its Gujranwala branch alone.

They, however, dispelled the impression that any action was being planned against some ‘big guns’ that had transferred the money from the country. “It is impossible to lay hand on some individuals as thousands of persons are involved in transferring or having remittances through the K&K.”

An FIA team consisting of Lahore, Karachi and Islamabad officials has been probing the matter in collaboration with the forensic experts of the National Response Centre for Cyber Crime.

The cases against the directors of the K&K have been registered with the FIA’s Lahore and Karachi offices under the Prevention of Electronic Crimes Ordinance, Foreign Exchange (Regulations) Act and Banking Companies Ordinance read with Sections 34/109 of the Pakistan Penal Code. The accused are on judicial remand in Karachi. The names of some 18 family members of the main accused have already been placed on the exit control list. arrested: Manga Mandi police claimed on Tuesday to have arrested six members of two gangs of robbers and thieves and recovered looted and stolen valuables besides illegal weapons from their possession.

According to a handout, police arrested ringleader Rafaqat Ali alias Baba and two accomplices, Ghulam Rasool and Irfan, and seized 49 cell phones, 741 scratch cards, cash and valuables from them.