Pakistan arrests forex company chief over dollar transfer

[dr.umer]

Pakistan arrests forex company chief over dollar transfer ​

8 Nov 2008

ISLAMABAD, Nov. 8 (Xinhua) -- The Pakistani investigation agency on Saturday arrested the chief of the country's largest foreign exchange company on charges of illegal transfer of billions of U.S. dollars abroad, a move taken at a time when the country is facing balance of payment crisis.

Munaf Kalia, Chief Executive Officer of Khanani and Kalia International (KKI), leading exchange company in Pakistan, had been arrested and was being interrogated, said Tariq Pervez, chief of the Federal Investigation Agency (FIA).

Munaf Kalia's partner and three other foreign exchange dealers from the port city of Karachi and eastern city of Lahore were also arrested, the News Network International (NNI) news agency said.

Pervez said the arrests were made following an investigation conducted by intelligence agencies and the FIA.

Reports also said the FIA has taken into custody 10 employees of the National Database and Registration Authority, which maintains the government's databases and computer networks, for alleged involvement in the money transfer.

Sources said that around 10 billion dollars may have been remitted out of the country.

Pakistan, facing severe economic difficulties with plunging foreign exchange reserves and high inflation, is seeking possible financial help from friendly countries and financial institutions.

The foreign reserves have fallen sharply from 16.5 billion dollars in October, 2007 to 6.75 billion dollars this November.

Shaukat Tareen, advisor to the prime minister on finance, said earlier that Pakistan needs four to five billion U.S. dollars in thirty days for stabilizing the country's economy.

 

[dr.umer]

People like this bast*** should be hanged publicly.

It is because of them our economy is facing serious problems.

His nationality needs be canceled immediately.

 

[Al-zakir]

People like this bast*** should be hanged publicly.

It is because of them our economy is facing serious problems.

His nationality needs be canceled immediately.

Agreed. Present day Mir Jaffor

 

[A.Rahman]

People like this bast*** should be hanged publicly.

It is because of them our economy is facing serious problems.

His nationality needs be canceled immediately.

When our own leader "Asif Ghadari" has millions of dollars hidden in foreign bank accounts, who can blame him? Our own leader has no trust in Pakistan.

 

[Imran Khan]

these kind of people are black sheaps cancel there licence so no again do this dirty job without our gov because this gov team is full of money londers

 

[DudeAl]

calm down a bit guys.we don't know the whole story behind this yet.As far as i know in pakistan you are allowed to send as much foregin exchange as you want though proper channels like banks etc.so i dont know what the big deal here is...smuggling of dollars?.their lawyer is saying they were being asked to pay commision to somebody in the govt which they refused and thats why they are being charged in a false case. commission?that rings a bell...some guy name Zardari used to do that back in the 90s ..ask people for commission and if they refused he used to shoot them or have them kidnapped.

 

[dr.umer]

As far as i know in pakistan you are allowed to send as much foregin exchange as you want though proper channels like banks etc.so i dont know what the big deal here is...smuggling of dollars?.

In case of bank, it is not "as much as foreign exchange" as you wish. There is a limit and at times bank can refuse to carry on transaction if "dollar outflow" is doubtful.

Khanani and Kalia was the "medium" used to transfer dollars out of Pakistan by some so called "powerful personalities". That's their fault. If they are so innocent what they were doing with fake passports, national id cards and clearly violating orders not to transfer any dollars outside Pakistan.

Regarding your commission story that's how all money changers work. In the wake of current economic turmoil, State Bank had issued clear orders not to transfer any dollars out of Pakistan. These guys thought State Bank was joking.

 

[dr.umer]

Munaf Kalia, Javed Khanani remanded to FIA​

Monday, November 10, 2008



KARACHI: Munaf Kalia, Javed Khanani and others accused of being involved in the scandal of illegally transferring billions of dollars abroad were handed over on remand to FIA today.

Munaf Kalia was presented in the court of Judicial Magistrate, Muhammad Umar Awan at the City Court here, when the court ordered giving him on three-day transit remand to FIA for taking him to Lahore during this time for further grilling.

The attorney of the accused made a plea in the court that Munaf Kalia was ill and a medical report was also presented in this regard.

On the other hand, Lahore Special Magistrate handed over Javed Khanani, Tariq Mahmood and Rustam Ali in the custody of FIA on four-day physical remand, while the accused would again be presented in the court of Lahore Area Magistrate on November 14. Khanani & Kalia Company has been charged for violating foreign exchange laws and is on trial.

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Now he is suddenly ill. His moral illness need to be "treated" first before his fake physical illness.

 

[dr.umer]

State Bank suspends Khanani and Kalia's licence ​

10 Nov, 2008

KARACHI: Pakistan's central bank suspended on Monday the licence of a prominent foreign exchange company as part of an investigation into illegal transfers abroad that comes as the country faces a sharp fall in foreign reserves.

Pakistan is struggling with a balance of payments crisis and the rupee has lost about 24 percent against the dollar this year. There have been reports of people making heavy withdrawals from their foreign currency accounts and sending money abroad.

Police said on Saturday investigators had arrested four foreign currency dealers on suspicion of illegally sending money abroad.

Among the four were two of the top officials of the Khanani and Kalia International company, police said.

The State Bank of Pakistan said on Monday it had suspended the company's licence with immediate effect 'for a period of 30 days pending further investigation/notice, for violation of...rules and regulations'.

Officials at Khanani and Kalia were not immediately available for comment.

Newspapers have reported $10 billion had been illegally transferred out of the country in one year.

But Tariq Pervez, director general of the Federal Investigation Agency, a police department that investigates financial crime, declined to say how much money was involved.

He said the amount would be known after an investigation.

In May, the State Bank of Pakistan stopped exchange companies from sending cash abroad in dollars, sterling, euro, and United Arab Emirate dirham in an effort to stabilise the rupee.

Foreign reserves have fallen sharply from a high of $16.5 billion in October last year to $6.76 billion on Nov 1.

The rupee was trading firmer at 80.65/75 to the dollar in the interbank market on Monday compared with Saturday's closing of 81.00/10.

 

[AgNoStiC MuSliM]

calm down a bit guys.we don't know the whole story behind this yet.As far as i know in pakistan you are allowed to send as much foregin exchange as you want though proper channels like banks etc.so i dont know what the big deal here is...smuggling of dollars?.their lawyer is saying they were being asked to pay commision to somebody in the govt which they refused and thats why they are being charged in a false case. commission?that rings a bell...some guy name Zardari used to do that back in the 90s ..ask people for commission and if they refused he used to shoot them or have them kidnapped.

I also believe that one accusation that has been leveled is that while they were disbursing remittances to the relatives of overseas Pakistanis, they were keeping the dollars out of the country, or at least out of official circulation. Therefore the record remittances that Pakistan has been seeing were not being reflected in the FE reserves.

 

[AgNoStiC MuSliM]

Govt obtains evidence of $40 bn transfer abroad​

Updated at: 2200 PST, Monday, November 10, 2008
GILGIT: Advisor to the Prime Minister on Interior Affairs, Rehman Malik Monday said the State Bank of Pakistan had allowed movement of currency and anyone who is to transfer even 50 million dollars could not legally be prevented to do so. That is why such a large amount of foreign currency was sent abroad, he added.

Talking to media after addressing the passing out parade of Northern Scouts, he said it was three weeks ago that the government started noticing the increase in the transfer of dollar and euro.

The families of those living abroad were receiving the money but there was no increase in Pakistan’s foreign exchange remittances. The government gave the task of investigation into the matter to FIA’s Cyber Crime Branch.

Rehman Malik said the FIA identified some of the web sites providing service of alternate banking. Record from one of such web site was seized after it was established that business of Rs39 billion was carried out from it and that it was more than what the SBP’s records show.

He hoped that more such information will be revealed from web sites that deal in transfer of currency and assured of bringing back the money transferred abroad illegally.

Those government, political or trade figures found involved in the business of illegal transfer of money will be presented before the nation.

Govt obtains evidence of $40 bn transfer abroad
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Could be a typo (as is customary in The News's updates) of 40 Billion USD - the article mentiosn 39 billion Rs., which is probably what is being referred to.

The largest figure I have heard so far is the 10 billion USD estimate, a huge amount.

 

[DudeAl]

this is absolutely ridiclous.not even Bill gates would have 40 billion dollars to sell to anyone.Forget 40,not even 10 billion dollars of outflow is possible through these guys .I heard something very interesting on Karman Khan show today from an economist,our reseserves in the state bank have declined by 10 billion dollars in that past 6 months and our interbank reserves have gone up by 1 billion dollars.Thats where most of the dollar was:in the state bank of pakistan which has gone out and caused pressure on the ruppee not with Khanani and Kaalia.Another accusation made against them that they stopped the flow of the dollars from outside is also hard to believe,our remittances have gone up this quater compared to last year.

So To blame the depreciation in the ruppee on these guys is a joke .They are being made a scapegoat here for govts own failure to control the economic meltdown.Theres a rumor circulating around that Zardari was asking them for bhutta but we ll have to wait and see about that.Remember that this action was not initiated on the request of State Bank Of Pakistan which is the regulating authority here

 

[DarkStar]

It is a big mistake to target foreign currency traders like this, and will infact exacerbate the problem of capital flight.

These sorts of knee-jerk reactions do nothing to bolster confidence in the economy, and this seems like a disaster in the making. Now everybody will be trying to get their money out of Pakistan, in case funds are frozen. The same thing happened after the nuclear tests during Nawaz Sharif's era, when he had the bright idea of freezing all dollar bank accounts, ostensibly to stop capital flight. But when he unfroze them a few days later, this is exactly what happened.

The governement will regret this step, and will end up pushing the rupee even lower. A bit of an own goal in that regard.

Since the rupee is depreciating anyway, Zardari's govt. should instead have engages the money exchangers, and bought foreign exchange off them to bolster the depleted reserves. The nawaz sharif govt started this trend of buying the dollar from the open market, while mr. shortcut Aziz thought this was an ideal short cut to boost foreign exchange reserves, and bought heavily.

I say, there is still time. Lets try and get the money traders on our side, buy dollars and euros off them. All they'll do is just transfer it to Dubai, otherwise.