The Public Accounts Committee on Tuesday sought from relevant authorities a report over the matter of the Panama Leaks within a month.
The committee grilled the heads of State Bank of Pakistan (SBP), Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP), Federal Investigation Agency (FIA), National Accountability Bureau (NAB) and Secretary Finance for what it said not accelerating the pace of investigation into the Panama revelations.
Secretary Law Karamat Hussain Niazi challenged the domain of PAC to carry out any hearing on the Panama Leaks.
Quoting the Rule 203, he pointed out, “The committee shall examine the accounts showing the appropriation of sums granted by the Assembly for the expenditure of the government, the annual finance accounts of the government, the report of the Auditor General of Pakistan and such other matters as the minister for finance refers to it”.
He added the committee has no power to take any suo motu notice in financial matters as there is a separate standing committee on finance.
Chairman Committee Khursheed Shah, however, overruled Secretary Law”s argument and opened discussions on the Panama Leaks.
The Chairman claimed that as many as 400 Pakistanis own over 250 offshore companies and questioned the relevant authorities about their performance in this regard so far.
One of the members of the Committee, Shaikh Rashid, said it is a planned move of members of ruling party to give floor to the secretary law from the very first.
Shaikh Rashid walked out after exchanging harsh words with Members of Pakistan Muslim League (N). PML-N leader Rohail Asghar said the head of the national institutions should also inquire about the companies that were created during the decade of the 1980s.
Khursheed Shah retorted that it does not matter whether the issue is from 90s or 80s; one should look objectively into the matter by putting aside political affiliations.
Chairman FBR Nisar Muhammad Khan told the committee that 230 people have been sent notices to-date. The FBR is awaiting the response to the notices sent, adding that those who set up offshore companies abroad after paying taxes will not be considered criminals.
About a belated action with regard to the Panama leaks, the Chairman said it was waiting an outcome as a result of efforts like constitution of a parliamentary committee for making the exercise more meaningful.
He said the replies to those notices had started pouring in. He added that these were being examined and matched with the data in FBR.
Regarding illegal outflows of money to Dubai for investment in real estate, the chairman said the issue was taken up with Dubai authorities several times and the Foreign Office had also sent several reminders, but we are still waiting for a response, he added.
Governor State Bank of Pakistan (SBP) Ashraf Mahmood Wathra pointed out the central bank cannot hold investigations or criminal investigations under the SBP Act 1956. As many as 250 offshore companies have invested Rs 2.37 billion in Pakistan but no investment was made in Panama.
Out of these companies, 10 were named in the Panama Leaks which had an insignificant investment of $12 million in Pakistan.
“The volume of Pakistan”s residents” investment in equity markets of 25 countries has been $601 million during the period from 2013 to 2015 and their major investment is in manufacturing sector and out of total amount only $85 million invested through offshore companies by well reputed companies of Pakistan,” he added.
“We do not have a tool to capture ”Hundi” and ”Hawala” transactions,” he added. “Since 2007 we are regulating and monitoring all banking transactions and suspicious banking transactions reported to Financial Monitoring Unit (FMU). Such transactions are referred to FIA, NAB or FBR for further action,” he added.
He pointed out that multinational companies in the world use offshore companies as special purpose vehicles to invest in foreign countries.
Chairman SECP Muhammad Zafar-ul-Haq Hijazi said that SECP constituted a committee to trace addresses of 600 companies out of 70,000 registered companies and found they had no investment in 280 offshore companies.
He briefed the committee that they have reconstructed the data of 444 such individuals whose names emerged in the Panama Leaks. “We sent details of 155 individuals holding directorship in 600 companies to FBR and SBP for further probe as SECP is not authorised to check accounts of private limited companies,” he said.
He said that 36 public limited companies have prudent investment in foreign countries and 474 are private limited companies whose accounts could not be examined under the SECP laws.
Director General FIA Muhammad Amlish stated that no case related to the Panama Leaks has been referred to FIA for further investigation.
Member Committee Shafqat Mahmood asked the DG whether FIA as an independent institution ever tried to ask those named in Panama Leaks about their money trails.
The DG said that FIA has no authority to initiate legal proceedings against public office holders. Section (2) of the FIA Act 1974extends to the whole of Pakistan; and it is also applicable on all citizens of Pakistan including politicians and public servants.
He further explained that FIA deals with cases of ”Hundi” or ”Hawala” by holding inquiries in collaboration with SBP. “Usually STRs are referred to us under the anti-money laundering act of SBP for further action.
No cases of individual or company related to Panama Leaks have been referred to us,” he said.
Chairman NAB Qamar Zaman Chaudhry categorically said that NAB has not initiated any proceeding against those named in the Panama Leaks.
“We cannot initiate criminal proceedings unless we see a prima facie offence is being committed and these are only leaks and even the parent company has not owned these leaks,” he said.
Like India, he explained, Pakistani institutions have been probing the Panama Leaks under civil laws. Only the cases that show any criminal misappropriations in terms of tax evasion, money laundering, drug related money or such offences are taken up for investigations.
Member Committee Dr Arif Alvi said that NAB is not an independent institution as chairman NAB is part of National Executive Committee which is headed by Secretary Finance.
Although, Chairman NAB offered no answer to the question, Secretary Finance clarified that it is a co-ordination forum for effective implementation of anti-money laundering measures effectively. -Business Recorder