Pakistan minister ditched offshore plans amid ‘concerns’ over tax authority

[terry5]

Pakistan minister ditched offshore plans amid ‘concerns’ over tax authority

Chaudhry Moonis Elahi backed out after learning Pakistan authorities had to be informed, leak suggests

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David Conn, Malia Politzer, Margot Gibbs and Shah Meer Baloch
Mon 4 Oct 2021 03.00 BST



A minister in Imran Khan’s Pakistan government pulled out of making planned investments through offshore tax havens after he was told his country’s tax authorities would be informed, documents in the Pandora papers suggest.
Chaudhry Moonis Elahi, Khan’s minister for water resources and a member of an influential family in Pakistani business and politics, expressed “concerns” in August 2017 about the investment being reported to his home country, according to the papers, and instead decided to establish a trust structure in the UK.


The leaked documents, reviewed by the Guardian and International Consortium of Investigative Journalists (ICIJ), do not specify why Elahi became concerned. But they show he had presented as his source of funds for the investments a $33.7m (£25m) sale of a family-owned company in Lahore that had been the subject of historical corruption allegations.

The revelations are likely to raise serious concerns in Pakistan, where in 2016 Khan, as an opposition challenger, expressed outrage after offshore interests linked to the country’s political elite were exposed by the Panama papers.

“It is disgusting the way money is plundered in the developing world from people who are already deprived of basic amenities: health, education, justice and employment,” Khan said then. “This money is put into offshore accounts, or even western countries, western banks. The poor get poorer. Poor countries get poorer, and rich countries get richer.”

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At the time, Moonis Elahi was a member of Punjab’s regional parliament. In June this year, Khan appointed him as a minister.

A spokesperson for the Elahi family rejected any allegations of wrongdoing, and said the family’s assets were all declared as required by law.

According to the Pandora documents, in January 2016, Elahi met officials from the offshore wealth management company Asiaciti Trust to discuss buying a 24% stake in RYK Mills, a large sugar and renewable energy company headquartered in Lahore, the capital of Pakistan’s Punjab province. Elahi told the officials he wanted to set up a trust and fund that would buy the 24% stake and also hold two properties in Britain.

To evidence his source of funds, Elahi showed Asiaciti a contract from his family’s May 2007 sale of their own sugar company, CSK Limited – previously called Phalia Sugar Mills – for which they were paid 2bn Pakistani rupees, equivalent to $33.7m in 2007.

That sale, to another Lahore-based company, Colony Mills, was later subject to intense scrutiny in Pakistan, including allegations made by the Bank of Punjab (BoP) that its own loan to finance the deal had been corrupt.

Due to Elahi’s status as a prominent politician – a “politically exposed person” (PEP), according to compliance rules – Asiaciti commissioned a thorough due diligence report on him by the risk management arm of the global information company Thomson Reuters.

Their report, dated 21 January 2016, based largely on media coverage in Pakistan in both Urdu and English, noted there had been serious allegations surrounding the $33.7m deal, including that the Bank of Punjab itself had filed complaints against the Elahi family to Pakistan’s National Accountability Bureau.

The key complaint at the time was that the bank had made a corrupt loan that enabled the Elahi family to sell the Phalia sugar mill. Moonis’s father, Chaudhry Pervaiz Elahi, still a prominent politician holding the position of speaker in the Punjab assembly, was at the time chief minister of the Punjab authority that owned the bank.

Chaudhry Pervaiz Elahi pictured in 2008. Photograph: AFP/Getty Images

The Asiaciti due diligence report noted: “The BoP through its complaint alleged that [Moonis] Elahi, and the others [including his father], sanctioned an illegal BoP loan to the company of a director of the bank, in a bid to allow him to purchase Phalia Sugar Mills owned by Elahi’s family.”


Pakistan’s Federal Investigation Agency was also reported to have instigated an investigation into the loans.

The Thomson Reuters report to Asiaciti stated that there were risks of corruption, money laundering and fraud relating to Moonis Elahi, but noted he and his family had always denied the allegations. The investigations had not concluded with any findings of wrongdoing against them, according to the report.

Asiaciti agreed to take Moonis Elahi on as a client, and did register a trust structure located in low-tax Singapore and the Pacific tax haven of Samoa, the papers show, in preparation for the investment in RYK Mills and to hold the two properties in the UK.

Asiaciti officials then advised Elahi that if they were to go ahead with the investments, they would need to share his financial information with the relevant tax authorities in Pakistan under the Common Reporting Standard (CRS), a global information-sharing system set up to combat tax evasion.

At that point, Elahi appears to have become concerned and decided not to go ahead.

Asiaciti noted of a telephone call with Elahi: “Moonis has concerns about the CRS reporting requirements of the structures to Pakistan … Moonis advised that he obtained advice from his legal advisers and as a consequence established a structure in the UK, whereby [sic] his wife and children are residents.”

It is not clear what Elahi’s concerns were about CRS reporting to Pakistan or what the legal advice was that led to him establishing a structure in the UK.

A prestigious London property linked to him does appear to have subsequently been transferred, legally, into a trust. The property, an apartment at Riverlight Quay, near the South Bank, had been bought for £5.45m in September 2015 by a company named LO89 Ltd – the same company that paid Asiaciti its £7,000 in fees for the Elahi work. Two years later, LO89 transferred the property, for no payment, to a UK company owned by a family member of Elahi’s.


In November 2018, the family member’s company transferred the apartment, again for no payment, to another British resident, who appears to hold it on trust.

The British resident did not respond to the Guardian’s questions about the property, and whether she does hold it on trust for the Elahi family. Citing confidentiality, the solicitor who worked on the property transfer also declined to answer questions, including whether he had been involved in forming a trust for the Elahi family, and if he carried out due diligence on the family and the source of their funds, particularly due to their probable status as PEPs.

A spokesperson for the Elahi family rejected any allegations of wrongdoing, saying: “In the past due to political victimisation, misleading interpretations and data have been circulated in files for nefarious reasons against the family in the name of so-called accountability.” The family’s assets were all declared as required by law, the spokesperson added.

The Bank of Punjab said it could not answer questions about the allegations or its response at the time due to laws requiring customer confidentiality. Colony did not respond to questions from the Guardian and ICIJ.

https://www.theguardian.com/news/20...-tax-authority-concerns-chaudhry-moonis-elahi

 

[TNT]

They all earn and suck up wealth in Pakistan and then send it abroad to their master's countries. They then obtain nationalities for their offspring, pay huge taxes to gora saab and abide by all their rules n regulations. Such a shame that they have no love or respect for their own country.
We need ruthless and brutal accountability in Pakistan, where no one is left, be it bureaucrats, politicians or military. We need severe and death punishments for corruption. But the question is who will do it, because all the stake holdeds and all the relevant ppl responsible are corrupt themselves. Its also clear the western countries are nothing but havens for corrupt thieves. In past they were openly thieves, colonizing other countries but now they become champions of humanity n law but in reality are same old crooks, just methods changed.

Not gonna give much details but as an example. There was this methamphetamine smuggler in KPK that had smuggled in outrageous quantities of ice (methamphetamine) in early days when no one knew abt it and disguised as chemicals for industry. The group was later trapped, one of my friend was involved in investigations. Guess what, the money involved was alot and a deal was made with them. They paid 500 billion rupees and were set free. There is absolutely no justice in Pakistan and literally the rich can get away with anything and everything.

 

[terry5]

PAKISTAN

Prime Minister Imran Khan promised ‘new Pakistan’ but members of his inner circle secretly moved millions offshore
Leak shows a key ally tried to bypass tax authorities and political and military elites bought luxury apartments and set up shell companies.

By Margot Gibbs and Malia Politzer
Image: Arif Ali/AFP via Getty Images

October 3, 2021

Imran Khan at an anti-government rally in Lahore in 2016, shortly after the Panama Papers caused uproar in Pakistan.

In 2018, Imran Khan, the Pakistani cricketing legend turned anti-corruption campaigner finally broke through.
After more than two decades in the political wilderness, the charismatic Oxford-educated media star seized on the publication of the Panama Papers, the 2016 journalistic exposé that revealed the offshore secrets of the global elite. Among the findings: The children of Pakistan’s sitting prime minister secretly owned a string of luxury London apartments.
Riding a wave of public outrage, Khan led protests around the country and a sit-in at the residence of Prime Minister Nawaz Sharif, demanding that he step down. With the support of the military establishment, Khan propelled his reformist party, Pakistan Tehreek-e-Insaf (PTI), or Pakistan Movement for Justice, past its rivals in the 2018 national elections and propelled himself into the prime minister’s office in Islamabad.

In a televised victory speech, Khan promised a new era.
“We will establish supremacy of the law,” he said. “Whoever violates the law, we will act against them. Our state institutions will be so strong that they will stop corruption. Accountability will start with me, then my ministers, and then it will go from there.”
Now leaked documents reveal that key members of Khan’s inner circle, including cabinet ministers, their families and major financial backers have secretly owned an array of companies and trusts holding millions of dollars of hidden wealth. Military leaders have been implicated as well. The documents contain no suggestion that Khan himself owns offshore companies.

Among those whose holdings have been exposed are Khan’s finance minister, Shaukat Fayaz Ahmed Tarin, and his family, and the son of Khan’s former adviser for finance and revenue, Waqar Masood Khan. The records also reveal the offshore dealings of a top PTI donor, Arif Naqvi, who is facing fraud charges in the United States.

Pakistan’s Finance Minister Shaukat Fayaz Ahmed Tarin gestures during a press conference. Image: Farooq Naeem/AFP via Getty Images

The files show how Chaudhry Moonis Elahi, a key political ally of Imran Khan’s, planned to put the proceeds from an allegedly corrupt business deal into a secret trust, concealing them from Pakistan’s tax authorities. Elahi did not respond to ICIJ’s repeated requests for comment. Today, a family spokesman told ICIJ’s media partners that, “due to political victimisation misleading interpretations and data have been circulated in files for nefarious reasons.” He added that the family’s assets “are declared as per applicable law”.
In one of several offshore holdings involving military leaders and their families, a luxury London apartment was transferred from the son of a famous Indian movie director to the wife of a three-star general. The general told ICIJ the property purchase was disclosed and proper; his wife didn’t reply.

The revelations are part of the Pandora Papers, a new global investigation into the shadowy offshore financial system that allows multinational corporations, the rich, famous and powerful to avoid taxes and otherwise shield their wealth. The probe is based on more than 11.9 million confidential files from 14 offshore services firms leaked to the International Consortium of Investigative Journalists and shared with 150 news organizations around the world.

The window into the personal finances of individual Pakistani generals is especially rare and provides a glimpse at how top military officers – known in Pakistan as “The Establishment” – use offshore to quietly enrich themselves while maintaining, until now, the military’s image as a bulwark against civilian corruption.

In the 48 hours leading up to the publication of the Pandora Papers, a Pakistani television station, ARY-News, reported that, “the owner of two offshore companies registered at a similar address as of Prime Minister Imran Khan has revealed that they were registered by him on a different address and denied any role of the premier in this regard.” The story also attributed the information to “a database of the offshore companies.”

ARY-News is not an ICIJ partner and doesn’t have access to ICIJ data.

In its reporting prior to publication, ICIJ had asked Khan about the same companies. A Khan spokesman told ICIJ that the prime minister had no link to either, adding that two houses in the same neighborhood share an address, providing a map as evidence.

The spokesman also told ARY-News that Khan denied any connection to the companies, adding that their owner “never met Imran Khan face to face and it may however be possible that they had attended an extended family function.”

The Pandora Papers investigation exposes civilian government and military leaders who have been hiding vast amounts of wealth in a country plagued by widespread poverty and tax avoidance.

The newly leaked records reveal the use of offshore services by Pakistan’s elites that rivals the findings of the Panama Papers, which led to Sharif’s downfall and helped propel Imran Khan to power three years ago.

Today, a few hours before the Pandora Papers’ publication, Khan’s spokesperson told a press conference that the prime minister, “has no offshore company but if any of his ministers [or] advisers have it will be their individual acts and they will have to be held accountable.”

An unaccountable military elite

Khan’s anti-corruption rhetoric resonated in Pakistan, where the military has pointed to what it calls the corruption and ineptitude of civilian politicians to justify overthrowing democratically elected governments three times since the country’s founding in 1947.
Military autocracies have ruled Pakistan for almost half the country’s history. They have been bolstered by support from the U.S and NATO countries, which have relied on Pakistan’s support as a bulwark against the Soviet invasion of Afghanistan and, later, the Taliban.

The military also claims legitimacy as the nation’s protector against longtime adversary and nuclear rival India.
Over the decades, the military and its secretive spy agency, Inter-Services Intelligence, have repeatedly stoked anti-India animus, even at the cost of angering Pakistan’s Western allies.


Foreign policy analysts have accused the military of playing a double game, receiving billions of dollars in U.S military support while continuing to work with members of the Afghan Taliban.

One legacy of colonial rule is the military’s wealth. The military’s combined business holdings amount to Pakistan’s largest conglomerate, and it controls 12% of the country’s land. Many of the landholdings are owned by current or former senior leaders.

The Pandora Papers reveal that in 2007, the wife of Gen. Shafaat Ullah Shah, then one of Pakistan’s leading generals and a former aide to President Pervez Musharraf, acquired a $1.2 million apartment in London through a discreet offshore transaction.

The property was transferred to Gen. Shah’s wife by an offshore company owned by Akbar Asif, a wealthy businessman who has opened restaurants in London and Dubai. Asif is the son of the Indian film director K Asif. The younger Asif once met with Musharraf at London’s Dorchester Hotel to ask for an exception to Pakistan’s 40-year ban on Indian films to allow the release there of one of his father’s most acclaimed movies. Musharraf granted the exception and later lifted the ban.

The leaked documents show that Asif has owned a multimillion-dollar property portfolio through a web of offshore companies.

One of those companies, called Talah Ltd. and registered in the British Virgin Islands (BVI), was used to transfer the London apartment to Shafaat Shah’s wife. Talah bought an apartment near the Canary Wharf financial district in 2006. The next year, Asif transferred ownership of the company to Fariha Shah.

Asif’s sister, Heena Kausar, is the widow of Iqbal Mirchi, a senior figure in a leading organised crime group, D-company. Mirchi was at the time under sanction as a drug trafficker by the U.S. Before his death in 2013, Mirchi was one of India’s most wanted men.

Gen. Shah told ICIJ that the purchase of the London apartment had been made through a former army colleague then acting as a consultant to London real estate firms, not through any personal connection to Asif. Gen. Shah said the flat “was named” to his wife because “I already had properties in my name while she did not have any and to balance tax deductions.”

Shah said that his wife has never met Asif and that he met him just once, while an aide to Musharaff, when Asif briefly lobbied the president for his father’s film “in the corridors of Dorchester Hotel when he had accompanied the hairstylist, who had come to cut Mrs Musharraf’s hair.”

Insights into the private wealth of top military officers and their families are exceedingly rare; journalists who have written about the military within Pakistan have been jailed, tortured and killed.

The Pandora Papers also reveal that Raja Nadir Pervez, a retired army lieutenant colonel and former government minister, owned International Finance & Equipment Ltd, a BVI-registered company. In the leaked files, the firm is involved in machinery and related businesses in India, Thailand, Russia and China. Records show that in 2003, Pervez transferred his shares in the company to a trust that controls several offshore companies.

One of the trust’s beneficiaries is a British arms dealer. According to U.K. court documents, one of the trust’s other companies has helped broker arms sales from Belgian manufacturer FN Herstal SA to Hindustan Aeronautics Ltd., a state-owned Indian defense company.

While he owned International Finance & Equipment, Pervez also held several high-level positions in Pakistan’s government. He was elected to the National Assembly in 1985 and later joined Khan’s party. Pervez did not respond to reporters’ questions.

Another influential former military leader who shows up in the leaked documents is Maj. Gen. Nusrat Naeem, the ISI’s onetime director general of counterintelligence. He owned a BVI company, Afghan Oil & Gas Ltd, that was registered in 2009, shortly after his retirement. He said that the company had been set up by a friend and that he didn’t use it for any financial transactions.

Islamabad police later charged Naeem with fraud related to the attempted purchase of a steel mill for $1.7 million. The case was dropped.

The Pandora Papers also bring to light the notable offshore holdings of close relatives of three senior military figures.

Umar and Ahad Khattak, sons of the former head of Pakistan’s air force, Abbas Khattak, in 2010 registered a BVI company to invest what documents call “family business earnings” in stocks, bonds, mutual funds and real estate.

The Khattaks did not respond to reporters’ questions.

In an example involving intergenerational wealth transfer, Shahnaz Sajjad Ahmad inherited a fortune from her father, a retired lieutenant general, through an offshore trust that owns two London apartments, purchased in 1997 and 2011 in Knightsbridge, a short walk from Harrods. She, in turn, set up a trust for her daughters in 2003 in Guernsey, a tax haven in the English Channel. Her father was a favorite of Field Marshal Mohammad Ayub Khan, the country’s first military dictator (1958-1969). After her father retired from the army, he founded one of Pakistan’s biggest business conglomerates. Ayub Khan’s son later married into the family and sits on the boards of several of the group’s businesses.

Shahnaz did not respond to ICIJ’s requests for comment.

Taken together, the findings offer a portrait of an unaccountable military elite with extensive personal and family offshore holdings.

‘A defining moment’

As Pakistan’s ultimate political arbiter, the military would eventually test Imran Khan’s reformist ideals.

Born in 1952, Khan was the son of a Lahore civil engineer, and he enjoyed the privileges of Pakistan’s insular, and insulated, upper class. When the electricity failed, elites could turn on generators. If hospitals were substandard, they flew abroad for care.

“I was from that privileged class that was not affected by the general deterioration in the country,” Khan wrote in his 2011 autobiography, “Pakistan: A Personal History”.

Khan’s elite boarding school, Aitchison College, was named for the colonial administrator who founded it. Lessons were in English; boys caught speaking Urdu during school hours were fined.

The education system replicated colonial values, Khan wrote, teaching elites that they should “look upon the masses with contempt” and that “the natives were not to be trusted.”

As a young man, he befriended future leaders of Pakistan, meeting Nawaz Sharif at a cricket club, stopping by for Sunday cheese and canape parties at the Oxford University lodgings of another future Pakistani prime minister, Benazir Bhutto. He also developed a reputation as a playboy and a denizen of London’s nightclubs.

Khan played his first cricket match for Pakistan’s national team in 1971, when he was just 18, became captain at the age of 29 and, 10 years later, led the team to victory in the 1992 World Cup.

In a country passionate about cricket, Khan’s athletic feats made him a national hero – and drew the attention of politicians hoping to capitalize on his popularity. Two of the Pakistan’s military leaders – Generals Musharraf and Muhammad Zia-ul-Haq – and Sharif, the three-time civilian prime minister, invited him to join their governments. He refused them all, later declaring in his autobiography that each administration was either incompetent or corrupt.

A Pakistani driver looks on as a poster of cricketer-turned-politician, Imran Khan, is seen on his rickshaw in Rawalpindi, ahead of the 2018 general elections. Image: Farooq Naeem/AFP via Getty Images

He wrote that he entered politics after the experience of building a cancer hospital in his mother’s memory in 1994 left him stunned both by the generosity of ordinary Pakistanis and the failings of their government: “I discovered how hard it was to achieve anything in Pakistan while also battling bureaucracy and corruption.”

In 1996, Khan founded the PTI party, vowing to root out corruption, address wealth inequality and break the hold of the country’s two political dynasties – those of the Bhutto and Sharif families – which he claimed ruled Pakistan like a “fiefdom.”

Among the early targets of Khan’s anti-corruption campaign was another powerful family, the Elahis, known in Pakistan as the Chaudhrys of Gujrat.

After Musharraf forcibly ousted Prime Minister Sharif in 1999, during his second term, Chaudhry Pervaiz Elahi, a prominent political figure, organized the Pakistan Muslim League-Q to support the coup. The PML-Q, known for backing Pakistan’s military governments, remains closely aligned with the military.

Over the years Pakistan’s anti-corruption agencies have launched and dropped several investigations into his business dealings. Around 2002, Khan petitioned the national bank to investigate loans to Elahi’s company which had allegedly been written off. At one point he called him “the biggest dacoit in Punjab,” using an Urdu word for “bandit.”

Despite being a national hero and benefiting from well-funded campaigns powered by the enthusiastic support of Pakistanis abroad, Khan remained a political outsider, in part because he refused to make alliances with forces he called corrupt.

Middle-class and other reform-minded voters flocked to his 2013 campaign, waving cricket bats. And Khan gained a powerful ally: the military, then in a power struggle with both mainstream civilian factions. But the PTI gained just 35 of the 342 seats in the National Assembly that year.

Then came the Panama Papers.

The revelations about then-Prime Minister Sharif and his family’s London real estate holdings, followed by the discovery that his oldest daughter forged documents in an attempt to cover up her ownership, played perfectly to Khan’s anti-corruption message and turbocharged his political fortunes.

“The leaks are God-sent,” Khan said at the time. Taking stock of the impact on the country’s ruling elite a year later, he declared, “This is a defining moment in the history of Pakistan.”

Pakistan’s Supreme Court soon disqualified Sharif from office for falling short of constitutional requirements to be “truthful and trustworthy.” The ISI was involved in the investigation of Sharif. He was later sentenced to 10 years in prison on related corruption charges.

In the 2018 elections, Khan’s PTI secured a fourfold increase in National Assembly seats, bringing the party to the brink of power. Throngs of his supporters danced outside the party’s headquarters in Islamabad.

But Khan hadn’t won the outright majority and needed to form a government. Sharif and Bhutto’s parties, the target of years of his attacks, were not an option.

That left a coalition of smaller parties, led by the Pakistan Muslim League-Q, the Elahis’ party. Khan made the deal.

A fateful political alliance

Since taking office, Khan has continued to deploy anti-corruption rhetoric and rail against elites who, he has said on Twitter, “come to power and plunder the country.”

But analysts say Khan has disappointed his reform-minded supporters and has become widely viewed as a figurehead. “He doesn’t have a problem with the military ruling the country while they pretend that he’s in charge,” Aqil Shah, a visiting academic at the Carnegie Endowment for International Peace,told ICIJ.

Khan’s spokesperson, Shabhaz Gill, told ICIJ that the “PTI believed in the separation of powers,” and the military came under the power of the executive branch of the state.

The Pandora Papers reveal that Khan has surrounded himself with people – cabinet ministers and their families, donors and other political allies – who have holdings hidden offshore.

Shaukat Tarin, Khan’s finance minister, and members of Tarin’s family, own four offshore companies. According to Tariq Fawad Malik, a financial consultant who handled the paperwork on the companies, they were set up as part of the Tarin family’s intended investment in a bank with a Saudi business. He said that, “as a mandatory prerequisite by [the] regulator, we engaged with the Central Bank of Pakistan to obtain their ’in-principle’ approval for the said strategic investment.” The deal didn’t proceed.

Tarin didn’t respond to ICIJ’s questions. In a statement issued the day of the Pandora Papers’ publication, Tarin said: “The off-shore companies mentioned were incorporated as part of the fund raising process for my Bank.”

Omer Bakhtyar, the brother of Khan’s minister for industries, Makhdum Khusro Bakhtyar, transferred a $1 million apartment in the Chelsea area of London to his elderly mother through an offshore company in 2018. The state anti-corruption agency has been investigating allegations that his family’s wealth inexplicably “ballooned” since Bhaktyar first became a minister in Pervez Musharaff’s government in 2004.

In a written statement to ICIJ, Makhdum Bakhtyar said that the anti-corruption agency’s investigation was founded on baseless allegations which had underestimated his family’s past wealth, and that it has so far not resulted in a formal complaint.

The son of Waqar Masood Khan, Khan’s chief adviser for finance and revenue between 2019 and 2020, co-owned a company based in the British Virgin Islands. Masood resigned in August amid a policy dispute. Khan told ICIJ that he did not know what his son’s company did. He said his son lived a modest life, and was not his financial dependent.

And Khan’s former minister for water resources, Faisal Vawda, set up an offshore company in 2012 to invest in U.K. properties, the Pandora Papers show. He resigned in March amid a controversy over his status as a dual U.S.-Pakistan national. Vawda told ICIJ that he has declared all worldwide assets held in his name to Pakistani tax authorities.

Gill, Khan’s spokesperson, said that Khan had passed an executive order requiring unelected members of his cabinet to declare their assets, in addition to the asset disclosures already required of members of the National Assembly under Pakistani law.

Khan’s financial backers are also prominent in the files.


Naqvi, the financier and major donor to Khan’s 2013 campaign, owned several offshore companies. The files show that in 2017, Naqvi transferred ownership of U.K. holdings – three luxury apartments, his country estate and a property in London’s suburbs – into an offshore trust operated by Deutsche Bank. Deutsche Bank declined to respond to ICIJ concerning the beneficiaries of the trust.

The next year, he presided over the spectacular collapse of his Dubai-based private equity firm, Abraaj Group.

U.S prosecutors charged Naqvi with engineering a $400 million fraud against Abraaj investors and this year persuaded a court to allow his extradition from the U.K. Naqvi has denied wrongdoing.

Tariq Shafi, a leading businessman and another PTI donor, held $215 million through offshore companies, the records show.

Neither Shafi nor Naqvi responded to ICIJ’s questions.

The documents offer an unusually detailed look at how a top political figure attempted to hide proceeds from an alleged misuse of public funds with the help of an elite offshore service provider.

The politician is Moonis Elahi, whose father founded the Pakistan Muslim League-Q, the party holding Khan’s fragile coalition together.

‘Several corrupt land development projects’

Scandals linked to the Elahi family have become a regular feature of Pakistani politics over the years, but have rarely resulted in legal consequences.

In 2007, for instance, authorities found that the Bank of Punjab, owned by the Elahi-led provincial government, had made a reported $608 million in unsecured loans, many to companies owned by the bank’s directors or people with political connections. When the loans went bad, the provincial government ultimately paid to bail out the bank.

In January 2016, Moonis Elahi, then a member of Punjab’s provincial legislature, met with officials at Asiaciti Trust, a financial services provider that specializes in offshore wealth management. Records show that Elahi told Asiaciti staff that he wanted to invest money from the 2007 sale of land owned by Phalia Sugar Mills, an Elahi family business.

The records show that Asiaciti officials asked Elahi about his past legal problems. He provided them with a court document clearing him of fraud charges unrelated to the Bank of Punjab scandal.

After the meeting, documents show, Asiaciti designated Elahi as a “politically exposed person” or PEP — a legal term denoting a corruption risk related to a client’s status as a public official.

Singapore’s anti-money-laundering laws require that management at professional firms like Asiaciti approve any business done with PEPs. The firms also have to establish the source of a PEP’s wealth and of the specific funds to be invested, and they have to take other steps to guard against money laundering.

Asiaciti commissioned Thomson Reuters Risk Management Solutions,a unit of the financial information giant, to conduct an “enhanced due diligence” check.

Thomson Reuters produced a 19-page report detailing allegations of Elahi’s involvement in “several corrupt land development projects,” including that he set up a fake company, fraudulently obtained loans and sold land at inflated prices to government agencies.

The report noted that the Bank of Punjab had filed a complaint with Pakistan’s anti-corruption agency against the Elahi family, alleging that under the “influence” of Moonis Elahi’s father, the bank had made an illegal loan to the buyer of the family’s Phalia Sugar Mills property.

On Feb. 15, 2016, records show, Asiaciti accepted Moonis Elahi as a client, despite the report’s findings.

Elahi provided Asiaciti with the contract from the $33.7 million Phalia Sugar Mills sale as the source of the funds he wanted to invest, records show. In other words, Elahi asked Asiaciti to invest the proceeds of an allegedly corrupt loan obtained from a state-owned bank.

The records don’t say whether Asiaciti asked about the Bank of Punjab’s allegations. The bank did not respond to questions from ICIJ’s partner, The Guardian, about the loan, including what became of its complaint, citing client confidentiality.

A spokesperson for Asiaciti said that the firm maintained a strong compliance program, and that their offices have all passed audits for anti-money laundering and counter terrorism financing practices.

“However, no compliance program is infallible – and when an issue is identified, we take necessary steps with regard to the client engagement and make the appropriate notifications to regulatory agencies,” the spokesperson said.

They said that ICIJ’s reporting was based on incomplete information but declined to elaborate.

Asiaciti registered a trust in low-tax Singapore and proposed to use part of the proceeds of the Phalia Sugar deal to invest in another Punjab sugar company, RYK Mills, in which Elahi already held a stake.

The plan called for a trust to hold an investment vehicle, funded by the “sale of a sugar mill,” that would own two properties in the U.K.

But, records show, when Asiaciti advised Elahi of its legal obligation to share his “financial information with the relevant tax authorities” – in this case, Pakistan’s Federal Board of Revenue – he balked.

Records show that Asiaciti received a phone call from Elahi. He wanted to scrap the trust.

“Moonis,” an Asiaciti manager wrote in a memo, “has concerns about the … reporting requirements.”

According to the memo, Elahi preferred to hold the investments in a U.K.-registered trust in his wife’s name; as a U.K. tax resident, she would not be subject to the same disclosure requirements.

“It appears that Moonis has no connection” to that trust, the memo says.


Less than a month after the phone call, Asiaciti prepared the paperwork to terminate Elahi’s trust. The following year, public records show, Elahi’s wife used a U.K. shell company to transfer an $8.2 million London apartment overlooking the River Thames to a woman named Mahrukh Jahangir, who then filed a U.K. Land Registry document generally used by joint owners and trustees. The transfer was not for “money or anything of monetary value,” according to public records.

A woman with the same name as Jahangir appears as a 9.4% shareholder in the RYK Mills – the business targeted as an investment in Elahi’s talks with Asiaciti. ICIJ tried to contact Jahangir for comment but did not receive a response.

Neither Elahi nor his wife disclosed ownership of the apartment or RYK assets in their official declaration of interests from 2017 as part of his candidacy to become a member of the National Assembly.

The Elahi family have ignored multiple attempts to seek comment concerning the allegations concerning the Phalia Mills sale, Moonis Elahi’s dealings with Asiaciti, or the U.K. based trust he intended to set up.

A new minister

In April, Pakistan’s Federal Investigations Agency announced a criminal probe into price fixing in the powerful sugar industry, naming RYK Sugar Mills among the companies allegedly involved.

The industry dominates the valuable agricultural land of Punjab and is one of the biggest water users in one of the most water-stressed countries in the world. It is also among the world’s largest producers of sugarcane and uses enough water each year to fill Australia’s Sydney Harbour more than 45 times.

On Twitter, Elahi acknowledged that he “indirectly” held shares in RYK Mills, though he wasn’t involved in the company’s management.

Responding to news of the criminal probe, Khan, in a speech, called out the “sugar mafia,” which he characterized as a “powerful elite” that set itself above the rule of law and frequently sought to “blackmail the government.”

In June, Khan announced a new appointment to his cabinet: He named Moonis Elahi minister for water resources.

Additional reporting: David Conn, Shah Meer Baloch