Panama JIT ‘doesn’t find PM guilty,’ but his sons

ISLAMABAD: While answering 13 questions raised by the Panama Bench of the Supreme Court, the Panama Joint Investigation Team (JIT) has not held Prime Minister Nawaz Sharif responsible of any wrongdoing, it is learnt from the sources close to the JIT.

The JIT has cast some doubts about the prime minister in absence of any reasonable evidence but at no place has held the Prime Minister responsible of doing any illegal thing.

The JIT in its final report while giving its findings about question 5 has declared that the Sharif family could not provide sufficient evidence to establish the movement of money from Dubai to Qatar, from Qatar to Jeddah and from Jeddah to London as claimed by it before the JIT.

However, the JIT links this issue to Hussain Nawaz and Hassan Nawaz (who are non-resident Pakistanis) and at the same time could not find out any evidence of any wrongdoing against these two regarding making ill-gotten money except expressing some doubts about some transactions made by other family members in 1990s.

Sources claim that JIT will admit in its report that regarding question 9 it could not find out the official evidence regarding ownership of offshore companies Nielsen and Nescoll. The sources said that JIT could not get any evidence to refute the position taken by the Sharif family regarding ownership of these two offshore companies which own four Park Lane London flats.

Sources claim that the JIT failed to find out answers to four questions; question 5, 7, 8 and 9. Sharif family has given detailed answers to these questions. The JIT is not satisfied from answers but at the same time could not obtain any evidence to prove the answers given by the Sharif family as wrong. Regarding last four questions; question 10, 11, 12 and 13, the JIT has mostly relied on the answers and evidences given by Sharifs. Sources say that JIT could not give any reasonably strong adverse finding against the Sharif family with regard to these last four questions.

According to the sources, regarding first four and sixth question, JIT has relied on the documentary evidences provided by the Sharif family and couldn’t get anything substantial against the submissions made before the apex court and statements made by the Sharfis before the JIT.

There were reports in media that the JIT members had obtained some substantial evidence from Dubai against Sharifs stance about their business transactions in the UAE in 1970s, but neither any question was asked about any such thing from the witnesses nor sources close to the JIT confirm any such thing.

The sources say that at some points, the JIT has gone beyond the mandate given to it in the 13 questions by the apex court and has made some adverse remarks. The sources say such findings would be irrelevant to the case proceedings.

They say that the only serious thing in the JIT report will be finding that Sharif family could not establish the money trail presented by it through documentary evidences. The JIT has cast aspersions on the money trail presented by Sharifs and expressed some doubts, but could not substantiate it doubts with evidences except mentioning some discrepancies.

It is important to note here that the issue of money trail is linked with members of Sharif family, not the Prime Minister. The Sharif family has proved that its head Mian Muhammad Sharif was running a huge business set up even before the Prime Minister Nawaz Sharif joined the politics in early 1980s and that assets belonging to Mian Muhammad Sharif were directly transferred to his grandchildren, which is a common practice is many cases. This inherited wealth became a source for the grandchildren for the initial investments in different businesses.

Here are the 13 question raised by the Panama Bench of the apex court along with the findings of the JIT according to sources and the brief of the response of the Sharif family to each question as submitted by them before the apex court and the JIT;

1- How did Gulf Steel Mill come into being?

According to the sources though JIT is not satisfied by the response of Sharifs to this question but it could not find out anything contrary to what the Sharifs have stated.

Sharif family stance: After Nationalization in Pakistan in January 1972, the business was set up by arranging money from UAE mostly from banks in 1974. There is no evidence that any money was taken out of Pakistan for Gulf Steel. It was the first ever steel mill in the Gulf. Mian Muhammad Sharif (MMS) went to Dubai after losing one factory to the fall of Dhaka and the mother of all factories Ittefaq Foundries to nationalization. Gulf Steel was made with no or very little equity but by and large financing.

2- What led to its sale?

JIT has relied on the response given by the Sharif family without any adverse finding.

Sharif family stance: The factory was developed and operational but as the Interest rates at that time were very high, hence there were financial problems and it was decided to sell a part of the company and pay off the loans. The mill was held in the name of Tariq Shafi the 20 year old nephew of MMS.

3- What happened to its liabilities?

The JIT has come up with some additional facts on this question but could not establish any wrong doing.

Sharif family stance: A new company called Ahli Steel was created to hold the FIXED assets (meaning factory and plant) of Gulf Steel with 75% belonging to Ahli family and 25% to the Sharif family. As per the first contract of sale the proceeds of sale amounting to 22m Dirhams went directly to BCCI. The current assets of the plant (meaning receivables, stock of scrap and manufactured steel etc) were not sold to Ahli. These were used to pay the remaining bit of the loan.

4- Where did its sale proceeds end up?

The JIT couldn’t come up with any additional fact other than what was stated by Sharifs. However, some JIT members only cast doubts on the statement made by Sharif family in this regard. It is not clear whether these doubts will be reflected in the final report in absence of any counter evidence.

Sharif family stance: In 1980, MMS was no longer interested in continuing with that investment following denationalisation of Ittefaq Foundries Ltd. The final 25% of the shares ended up being sold in 1980 at a higher price of 12 million DHS for 25% stake as compared to 22 million for the initial 75% (as the mill started profiting).  This money was received in cash two million DHS every month over 6 months. The sale contracts attested by the Dubai Courts are submitted to the JIT. The sale proceeds were entrusted to a friend of MMS called Jassim bin Jaber Al Thani for safekeeping/investment. The money was received in cash by Fahad bin Jassim Al Thani, the son of Jassim bin Jabr Al Thani, and the brother of His Highness Hamad bin Jassim the current Qatari Prince.

5- How did they reach Jeddah, Qatar and the UK?

The JIT declares that money trail could not be established in the light of the documents provided by the Sharif family. The main evidence was the statement of Qatari prince Hamad Bin Jassim who could not be testified.

Sharif family stance: By the time the disbursements were made Sheikh Jassim bin Jabr Al Thani had died. The money was sent in 2001 to London and Jeddah through bank transfers. However banks do not keep such records for more than 5/6 years and after a passage of 17 years all such records are not available.

The money trail is only required if any link of the PM can be established with the assets. Both sons are non-residents and have hardly filed their returns for decades hence nothing is available as to their means. Even if all evidence provided by the Sharifs is rejected, the fact remains that no evidence of corruption, misuse of office, money laundering or misconduct is available. This is coupled with the fact that MMS, the patriarch, a man of significant means, who never held any public office, provided for the family's finances throughout his life. Hence it would really require real overstretching even to presume that the PM had to do anything with the assets under question.

6- Whether respondents No. 7 (Hussain Nawaz Sharif) and 8 (Hassan Nawaz Sharif) in view of their tender ages had the means in the early nineties to possess and purchase the flats?

According to sources, the JIT was not satisfied with the Sharifs response but could not find out any single evidence to prove the stance of the Sharif family as wrong.

Sharif family stance: There is no record to suggest that the said flats were owned by Hassan or Hussain from the 1990s. However, even if presumed that the Sharif family owned these flats, the price paid (as written on title deeds obtained by the petitioner from UK Land registry) in 1993-96 was £1.9 million i.e. Pak Rs7.5 crore which was not at all a big deal for someone like MMS. There is no evidence to link MMS to any of these transactions.

7- Whether sudden appearance of the letters of Hamad Bin Jassim Bin Jaber Al-Thani is a myth or a reality?

The JIT could not complete its investigation on this point.

Sharif family stance: MMS invested with the father of Hamad Bin Jassim. Both families always enjoyed close relations during all this time. Hamad Bin Jassim has provided all details in its communications with the apex court and the JIT. It is established that Sheikh Hamad was the first foreign dignitary to meet MNS in prison following the 1999 coup. This means strong relations between them existed. Also existence of an unknown Arab Sheikh was pointed out by Rehman Malik in his report. The Sharif family was secretive about this but it is no myth by any means.

8- How bearer shares crystallized into the flats?

JIT findings on the question speculative and no evidence contrary to what Sharif family has stated could be found out.

Sharif family stance: Jurisdictions like the BVI and others of its like thrive on providing laws and procedures whereby the names of the investors can be kept secret. In the Arab world and indeed the rest of the world, people do not like others to know about the extent of their wills hands it has been a common procedure to hold companies through bearer shares. According to the statement of Hamad bin Jassim Al Thani, these companies owned the flats from the outset and were held by the Al Thani family through bearer shares which were kept in their custody in Doha, Qatar until delivered to Hussain Sharif in 2006. Before 2006, a company called Ansbacher was the service provider for these companies. This company was owned also by Qataris.

9- Who, in fact, is the real and beneficial owner of M/s Nielsen Enterprises Limited and Nescoll Limited?

JIT has made a request for mutual legal assistance but it has no official information on this count. It is important to mention that according to official record of NAB shared with the JIT, the British Virgin Island has already responded twice to Pakistan (before JIT constitution) the record and information of these offshore as required by Pakistan was either not available or could not be provided.

Sharif family stance: There is no evidence to disprove the testimony of the Sharif family. There are conspiracies to link the Prime Minister to these investments by rejecting Sharif family version based on fact and assuming him to be the owner. There is no evidence to prove this is it is absolutely false and that the conspiracies will ultimately fail.

10- How did Hill Metal Establishment come into existence?

According to sources, the JIT has initially decided to rely on the statement of Sharif family in absence of any evidence contrary to it. It is however not clear what will be the finding in final report.

Sharif family Response: Hill Metals (HME) was formed after 2005 when Al Azizia Steel was sold. The proceeds of Al Azizia Steel were Saudi Riyal 63 million while SR 40million became 25% equity for Hill Metals. Two Saudi banks and the state owned Saudi Industrial Development Fund financed the remaining 75%. Evidence is provided to the JIT.

11- Where did the money for Flagship Investment Limited and other companies set up/taken over by respondent No. 8 (Hassan Nawaz Sharif) come from?

The JIT, according to sources, could not find out anything contrary to what Sharif family claimed.

Sharif family response: As opposed to the petitioner’s claims, Flagship was started with modest capital. The business model of Flagship is that they buy a rundown property, develop it to a very high standard (takes average 2.5 years per property sometimes even more) and then sell. It's easy to find buyers in London given the high demand. Hence they get paid for 1) value addition 2) appreciation in the price of the property in the time the work goes on. Normally if the estimated cost of the project including its redevelopment is say 2 million pounds, 0.5 million pounds is paid as equity whereas 1.5million is bank loan. It is very easy to sell such property for 2.5 million (even more) after 2.5 years. Since one’s equity was 0.5 million, one can easily double it. Flagship has done dozens of projects like this and sold them. There is no working capital required in such business. The money that was used in flagship came from the following sources:-

a) From MMS through the Qatari prince, a small amount of money came in

b) From the sale proceeds of Al Azizia Steel money was given to Hassan Sharif by his elder brother Hussain Sharif.

c) In 2007 after the park lane apartments were transferred to Hussain Sharif, he let his brother Hassan mortgage those properties and borrow against them from Deutsche Bank. That money was used in the business and gave it a real boost. The loan was paid off in instalments and completed in 2015.

12- Where did the Working Capital for such companies come from?

The JIT has relied on what Sharifs has provided to them. There is no additional information that JIT could find out.

Sharif family stance: The working capital facility for Hill Metals was and is financed by two Saudi Banks. Details are with the JIT.

13- Where do the huge sums running into millions gifted by respondent No. 7 (Hussain Nawaz Sharif) to respondent No. 1 (Mian Muhammad Nawaz Sharif) drop in from?

According to sources, some of JIT members were having doubts on the explanation given by Sharif family. However, despite making efforts, no evidence could be found to prove Sharif family stance wrong.

Sharif family stance: The money that was received by the PM from Hussain Sharif was from Hill Metals. As mentioned before, Hill Metals was set up with equity of SR 40m which represents only 25% of its initial value. 75% was loans from commercial banks and the Industrial development fund of Saudi govt. also cash generated from the operations has been ploughed back into equity additionally working capital lines are available. The Sharif family has provided letter from its auditors in SA showing cash generation every year and certifying that there was enough cash available with the business to send such amounts to Pakistan and still there would be spare cash available in most of the years. This has to be remembered that these are much needed foreign exchange transfers into Pakistan and not from Pakistan abroad. These are subject to the economic reforms act and source cannot be questioned.

Also it needs to be known that Hassan has been resident abroad from 1994 whereas Hussain left Pakistan in 1992. He returned in 1997 but was exiled in 2000 and has not returned ever since. If Hussain and Hassan are called to question for the source of their assets and source of remittances to Pakistan, then the principle will also cover many expat Pakistanis who will be in similar position. It is a fact is both the sons are over 40 years of age. They cannot be the dependents of their father. The amounts transferred to Pakistan are all official through banking channels and most importantly reflect in Prime Minister's returns.

There are conspiracies to overstretch to show that Hussain/Hassan are the benamidars of their father. The family has decades long business and leaders in their field. There is no need to be benamidars as keeping the Prime Minister out of loop the family has great resources which all are explained. No such conspiracy could be established as there is no evidence to link the Prime Minister to the purchase of the said assets. in fact to the contrary the lawyer who bought these properties in 1993-96 has certified in a letter submitted before the Supreme Court that he was not acting on behalf of Sharif family nor ever received any instructions from any member of Sharif family. According to the law relating to benami, the alleger/prosecution has to establish:- 1) Who paid the price 2) Possession 3) Custody 4) Motive for benami. None of the above links any asset to the Prime Minister. 

The last sentence of the para-3, of April 20 ‘Order of the Court’ reads, “The Bench thereupon may pass appropriate orders in exercise of its powers under Articles 184(3), 187(2) and 190 of the Constitution including an order for filing a reference against respondent No. 1 and any other person having nexus with the crime if justified on the basis of the material thus brought on the record before it.”

The three judges who are part of the Panama judgement Implementation Bench did not pass any adverse order against the Prime Minister or any member of his family on the basis of the documents and evidences presented before the Panama bench.

It is clear from these lines of the ‘Order of the court’ that the bench will proceed against the Sharif family on the basis of “some additional facts verified through admissible evidences” investigated by the JIT and put before the Implementation bench.

However, JIT could not find out any additional verified fact in addition to what already available with the apex court. Reliable sources told The News that none of the witnesses examined by the JIT were asked any question about anything new. It is clear that had the JIT obtained any new evidences against the Sharif family, the witnesses would have been asked about the same. There are some issues regarding Hudabiya Papers Mills but the case was dismissed by the Lahore High Court (LHC) twice. The case can be reinvestigated or fresh trial can be ordered but no adverse orders can be passed on basis of any information available with any institution regarding Hudabiya Papers Mills case as the same is already decided by the LHC.

According to senior constitutional experts, the Supreme Court has no jurisdiction to disqualify any legislator without a conviction following a criminal trial and the past orders disqualifying legislators on the basis of likes and dislikes are disapproved by the legal fraternity.   

These experts point out that in its ‘Order of the Court’, the Panama Bench has pointed towards taking some big decisions which obviously need formation of a larger bench. If past good precedents are any guide, it can be expected that either the case will be dismissed or the Chief Justice will constitute a new larger bench after submission of the JIT report.