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Turkish firms trapped in euro 9.37m scam

August 26, 2004

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KARACHI, Aug 25: President of a Turkish business group is running from pillar to post to get back a sum of Euro 9.37 million from a Pakistani national who defrauded the group and has now been arrested in Lahore.

Sources in the police department said that the ERKA Group of Turkey and the European Trust Holding, acting as investors, had entered into a deal with Umar Zahoor, posing himself as president Middle East operations of the so-called 'Bank International' and 'SDC Bank International' in early 2003. The deal had taken place in Switzerland.

The documents attached with the deal between the two sides included explicit bank guaranty on investment security. Among the terms agreed upon was a clause specifying the minimum interest rate and a condition that in case of no returns on the securities, the investors could request for the refund of the entire invested amount 'immediately', sources said.

The transactions between the two parties took place on different occasions as the amounts had been transferred from the ERKA's account with the ABN Amro Bank to the account of Zahoor's banks with the Credit Suez Bank.

Mr Erhan Kanioglulari, President of the ERKA, came to Karachi about four weeks back and started searching for Zahoor. His efforts materialized when he traced out Zahoor and made him to hold a meeting. According to the sources, the meeting was held at the residence of an influential political figure.

"During the meeting, Zahoor warned Mr Kanioglulari that he (Zahoor) enjoy full immunity in Pakistan and that no harm could be caused to him," Nooruddin Karacsulu, a business associate of Mr Kanioglulari told Dawn. Mr Karacsulu accompanied Mr Kanioglulari in that meeting.

The disappointed visitors approached the Turkish embassy and sought its help in recovering the swindled money. On the embassy's intervention, the Punjab home department took action and Zahoor was arrested in Lahore.

The law-enforcement agencies brought him to Karachi. He was kept in the Artillery Maidan police station where he was made to refund a substantial amount out of the defrauded money. Later, he was handed over to the investigation wing and kept in the formerly CIA Centre building, a senior police official said.

Eventually, Zahoor was given in custody of the Anti-violence Crime Cell (AVCC) of police. However, according to the sources, Umar Zahoor managed to strike some deal with the AVCC wing's investigators who came out with the claim that they did not succeed in 'breaking the suspect'. "It seems that Zahoor owes nothing to Mr Kanioglulari," the investigators reported to have concluded.

Mr Kanioglulari, approached the city police chief, Tariq Jamil, with a complaint who ordered that the suspect be removed from the premises of the AVCC to the office of the SSP Investigation Zone I, Manzoor Mughal, sources said.

At the same time, considering the seriousness of the case, an inquiry into the entire scam has been assigned to SSP Sanaullah Abbasi. Sources said that Mr Kanioglulari has also met Governor Dr Ishratul Ibad who has assured him of full corporation.