Solar panels’ import: Senate panel told two entities fined for Rs106bn over-invoicing

ISLAMABAD: A sub-committee of the Senate panel has found startling disclosures and held responsible for two companies accused of conducting suspicious transactions of Rs106 billion in the guise of over-invoicing in the import of solar panels.

In a meeting of the Senate sub-committee of the Senate Standing Committee on Finance and Revenue led by Senator Mohsin Aziz, fresh revelations have emerged regarding a massive over-invoicing in the import of solar panels, involving transactions worth billions of rupees. The meeting examined the involvement of two major companies in financial irregularities.

During the meeting it was revealed that transactions from these companies raised serious red flags. These companies are accused of conducting suspicious transactions worth Rs106 billion between 2018 and 2022, with a substantial portion of these dealings made in cash.

Senator Mohsin Aziz raised alarming questions about how companies, operating under tight import restrictions, were able to conduct such massive transactions. “How is it possible that companies managed to make huge single transactions when ordinarily far less amount raises red flags, Aziz inquired?

It was revealed that the companies in question used accounts opened in two banks in Lahore to carry out transactions for import of solar panels. One company alone made over Rs2.7 billion in transactions in 2018 and continued making payments, including Rs5 billion in 2019, Rs1.5 billion in 2020, and Rs2.5 billion in 2022, while the other reported Rs7.9 billion in turnover, with a significant amount in cash.

The committee also uncovered multiple instances where solar imports were cleared at highly inflated values. “Some solar containers were cleared at lower than market prices, while others were cleared with inflated values. The FBR should have been alerted to this discrepancy much earlier,” noted Senator Shahzeb Durrani, a member of the committee.

The Financial Monitoring Unit (FMU) and Federal Board of Revenue (FBR) raised concerns about the nature of these transactions. FBR officials confirmed that around Rs46 billion in suspicious transactions were flagged, many of them involving cash payments, which raised serious concerns of potential money laundering.

Senator Durrani expressed deep frustration over the delayed response to these financial irregularities. “This is a high-level example of money laundering, but what’s troubling is that we are only now beginning to connect the dots,” Durrani stated. He added, “What action has been taken, and why has it taken so long to address this issue?”

The State Bank of Pakistan (SBP) officials revealed that Rs40 million and Rs27 million penalties were imposed on the two banks respectively for their negligence.

In response to these violations, Senator Aziz remarked, “We are now hearing of fines and penalties, but what concrete action has been taken against the actual perpetrators of the scandal?”

The sub-committee has called for a thorough investigation into the actions of the companies and the involved financial institutions. As of now, three individuals have been arrested in connection with the scandal, though they are currently out on bail. However, many questions remain unanswered, particularly regarding the full extent of the such huge over-invoicing in the import of solar panels financial transactions laundering operation.

Senator Aziz stated, “We are still waiting for concrete evidence that will confirm whether money laundering to the tune of Rs70 billion actually occurred. The delay in uncovering these transactions is deeply concerning.”

The Senate Finance sub-committee recommended that as part of the ongoing inquiry investigation, the Senate Finance Sub-Committee has made several key recommendations, including a full audit of all companies involved in solar imports from 2018 to 2022, enhanced monitoring and regulation of financial transactions involving solar panel imports, immediate investigation into the role negligence of commercial banks, and stronger enforcement mechanisms to prevent money laundering and corruption in the solar import sector.

The Senate Finance Sub-Committee’s meeting on the over-invoiced import of solar panel has uncovered troubling details, but many questions remain unanswered. The committee has vowed to continue pressing for answers and to ensure that action is taken against the culprits involved in these suspicious transactions. The findings highlight the urgent need for stronger regulation in Pakistan’s banking import sector to prevent further financial irregularities.

Senator Aziz concluded, “The time has come for us to hold those responsible accountable, and we will not rest until the truth is fully exposed.”