KARACHI: Turning down the Federal Investigation Agency’s (FIA) request for further extension in physical custody of detained former chairman of the Pakistan Stock Exchange Hussain Lawai and co-accused Taha Raza, a judicial magistrate on Saturday remanded them in judicial custody in a case pertaining to alleged money laundering to the tune of Rs7 billion.

FIA detained Mr Lawai and Mr Raza on July 6, accusing them of facilitating the opening of 29 “fake” accounts in the Summit Bank, Sindh Bank and United Bank Limited. It further alleged that on Saturday, the IO produced them before the judicial magistrate and stated that earlier the details of suspected “bogus” bank accounts were gathered, but now he had to gather data of 47 other bank accounts.

He maintained that the banks had started sharing details of such accounts and now details of the beneficiaries of the money routed through the fake accounts was to be collected. Therefore, he sought extension in physical remand of the suspects in FIA custody.

FIA denied suspects’ further physical remand

However, defence counsel Shaukat Hayat and Haider Imam Rizvi opposed the IO’s request, arguing that the prosecution had not fulfilled the mandatory legal obligations while registering the case pertaining to alleged money laundering against their clients.

They argued that the prosecution failed to establish the source of the allegedly illicit money, as was required under Sections 3 and 4 of the Anti-Money Laundering Act, 2010, therefore such provisions were not applicable to the suspects.

The counsel added that Section 420 of the Pakistan Penal Code (PPC), mentioned in the FIR by the prosecution, also did not fall within the ambit of the anti-money laundering law. Besides, the prosecution also failed to establish that the money credited and debited in the alleged fake bank accounts was “proceed” of crime, as was mandatory to be established for lodging a case under the act, the lawyers stated and pleaded to remand the suspects in judicial custody.

Allowing their request, the judge remanded Hussain Lawai and Taha Raza in judicial custody for two weeks with the direction to produce them on the next date of hearing.

According to the FIR, on a complaint about a suspicious transaction report in respect of 29 bank accounts, the State Bank Circle of the FIA initiated an inquiry.

The inquiry established that one bank account titled ‘A-One International’, a sole proprietor firm, at Summit Bank Limited`s Khayaban-i-Tanzeem branch, purportedly in the name of Tariq Sultan, was fraudulently opened by using his computerised national identity card.

“Subsequently, this bank account was used to place illegitimate funds for the purpose of money laundering,” stated the FIR, adding that the account statement showed that during a short span of 10 months (from March 6, 2014 to Jan 12, 2015) Rs4.145 billion was credited and routed through this account.

It mentioned that the said amount was transferred to 13 different business entities, including the Zardari Group — a company owned by the Pakistan Peoples Party co-chairman and former president Asif Ali Zardari and his sister Faryal Talpur — which received Rs15 million.

It disclosed that the largest amount of Rs2.492bn was transferred to the account of a UAE national, Nasser Abdullah Lootah, then vice chairman and present chairman of Summit Bank. It further showed that the second biggest transaction of Rs73.782m was made to the account of Ansari Sugar Mills, while Rs5m was transferred to Omni Polymer Packages (Pvt) Ltd.

A case was registered against them under sections 419, 420, 468, 471 and 109 of the Pakistan Penal Code read with Section 5(2) of the Prevention of Corruption Act, 1947 and sections 3 and 4 of the Anti-Money Laundering Act, 2010.

Published in Dawn, July 15th, 2018