KARACHI: The Federal Investigation Agency (FIA) on Friday registered a case against the owners of Creek Marina — a multi-billion rupee residential project launched by a Singapore-based company more than 18 years ago in partnership with the DHA — and senior officials of local private banks for their alleged involvement in embezzling billions of rupees of local buyers and investors.

The company, Meinhardt Singapore PTE Ltd (MSPL), has failed to complete the project and hand over the flats to buyers and investors despite the passage of almost 19 years.

The FIR lodged by the FIA corporate crime circle shows the details of the ‘fraud’ which was going on unchecked under the nose of the authorities and in partnership with some reputed local organisations and took away from the people of Pakistan more than Rs30 billion rupees over the years.

Still after the FIR registration, the fate of the investment of over 200 buyers of the Creek Marina project remained uncertain.

FIA lodges FIR after completing initial probe on directive of Public Accounts Committee

The fresh move of the FIA came after the agency completed its initial probe under the directives of the Public Accounts Committee (PAC) of the National Assembly.

The legislators’ body last month referred the Creek Marina case to the FIA for an investigation into its alleged “corruption and money laundering” over growing complaints from many affected allottees.

The FIA nominated the owners of the Meinhardt and its senior management namely Nasim Shahzad Mohammad, Omar Shahzad, Nudrat Mand Khan and Muhammad Abdur Raheem; senior bankers Shehryar Khalid, Faisal Hameed of Silk Bank and Faisal Jamil Khan and Syed Ali Murad Naqvi of Meezan Bank under Sections 409 [criminal breach of trust], 109 [abetment] and 34 [common intention] of the Pakistan Penal Code.

Launched in September 2004 in partnership with the DHA, completion of Creek Marina project still remains a distant dream for its affected allotees who have already paid billions of rupees over the years.

After almost 19 years, the whole project emerges as dubious and an organised scam for many as found by the FIA in its initial probe which shows how local banks, regulatory bodies, real estate watchdogs and financial institutions either ‘ignored’ the formalities or ‘connived’ with the foreign company in taking away some Rs33 billion from the country.

“It was agreed between both parties [DHA and Meinhardt] to open and maintain an escrow account for the purposes of the payments received from the buyers and for the payment of expenses and project costs related to the project Creek Marina,” said the FIR.

“The escrow account was to be audited and agented by an independent auditor, and its cash flows were to be quarterly reported to the DHA by the MSPL. However, no escrow account was opened till 10th of July 2020 after a settlement agreement between DHA and MSPL.”

The FIR says that in violation of the agreement, the Creek Marina owners ‘fraudulently’ opened two bank accounts in HSBC Karachi in May 2005 and in HBL Commercial Banking Branch in May 2007.

“During the operations of these accounts, approximately Rs12.1 billion and Rs17.1 billion were credited into these accounts, respectively,” it said.

“It is pertinent to note that these two accounts were current accounts, not escrow accounts. The funds fraudulently accrued in these accounts from the buyers [general public] and investors were subsequently siphoned off mainly through cash withdrawals and foreign telegraphic transfers [FTTS], rather than using these funds for the construction of the project.”

In April 2011, the FIR says, the management of Creek Marina ‘fraudulently’ opened another account at HSBC Pakistan Main Branch Shaheen Complex Karachi, which was later transferred to the Meezan Bank in 2014 after the HSBC’s merger with the Meezan Bank.

“The account remained non-operational and dormant till June 16, 2016 when Faisal Jamil Khan, the then-operational manager, and Syed Ali Murad Naqvi, branch manager of Meezan Bank Shaheen Complex Kiyani Road Karachi reactivated the bank account on the reactivation request of Nasim Shahzad,” the FIR says.

The account was fraudulently reactivated in violation of the set rules, it says, ignoring all defined rules set by the State Bank of Pakistan and other financial watchdogs.

“During the operation of this account, the funds [Total Credit Turnover: Rs 4.3 Billion] accrued in this account from the buyers [general public] and investors were subsequently siphoned off mainly through cash withdrawals and third-party payments,” added the FIR.

It also claims that the Creek Marine management “fraudulently” opened another bank account in Silk Bank Main Branch in December 2021 with “active connivance” of Silk Bank officials.

“This account was opened in Silk Bank without obtaining mandatory documentation viz. Company’s Board resolution, Article of Association, Company Registration Certificate, Form A and Form 29, Certificate of Incorporation, SECP-approved documents, verified signatures on the AOF [account opening form] by an Embassy official for the signatories residing abroad, and approval from the Board of Investment of Pakistan (BOI). Moreover, no biometric verification of the authorised signatories of the account holders was conducted,” it says.

Speaking to Dawn, Nasrullah Khan of the FIA corporate crime circle said, in the next phase the agency would take the named suspects into custody to grill them further on the charges.

However the two of them - namely Nasim Shahzad Mohammad, Omar Shahzad — are nationals of Singapore and settled in the island country.

Published in Dawn, September 16th, 2023