Hill Metals Establishment: NAB probe claims Nawaz received 98.01pc income as gifts

ISLAMABAD: The National Accountability Bureau (NAB) in its investigation report has tried to establish that the remittances received by Nawaz Sharif from Hill Metals Establishment during 2010 to 2017 was 98.01 percent of the net profit of the mill whereas, the Whats-app-calls fame Joint Investigation Team’s report mentions that the ousted prime minister received 88 percent share of the company’s profit as gifts.

However, the figures provided to the JIT showed that the remittances received by Nawaz Sharif were not more than 19.40 percent of the company’s income but why the actual figures were kept hidden from the nation is yet to be known.

In the interim reference filed against the Sharif family in Al-Azizia Steel Company Ltd, Jeddah KSA Hill Metals Establishment, Jeddah KSA case, the NAB’s investigation report has borrowed JIT’s flawed findings even after getting “expert opinion” from their Expert Finance & Accounts NAB (Rwp) wherein the Bureau has tried to establish that Nawaz Sharif received 98.01 percent of income from Hill Metal Establishment instead of 88 percent as alleged by the JIT.

The report, a copy available with The News, says that remittances to the extent of EURO: 1,267,568 (Rs172 million approx) and $10,219,155 (Rs1.021 billion) sent by Hussain Nawaz Sharif and Hill Metals Establishment during the period of Jan 2010-June 2017. These foreign currency receipts were converted and credited to his PKR A/c No01-1795303-01, Standard Chartered Bank Ltd, Wapda Town Branch, Lahore and PKR AC No18-1847988-01, Standard Chartered Bank Ltd, Main Gulberg Boulevard Branch, Lahore, which comes to Rs1.187 billion whereas EURO 7,568 (Rs1 million) GBP 5000 (Rs700,000) and $200,700 (Rs20 million) are available balance in his bank accounts as on 18-08-2017.

Remittances to the extent of PKR: 59.256 million were sent to Maryam Safdar in her PKR A/C No. 0149056661004053 (PKR), MCB Bank Limited, New Garden Town Branch, Lahore through Hill Metals Establishment. Remittances to the extent of GBP: 1.5 million (Rs225 million) remitted to Hassan Nawaz Sharif through Hussain Nawaz Sharif.

The report mentions that during the course of further investigation following proceedings have been undertaken:

Further Remittances from Hill Metals Establishment HME:

Huge influx of remittances from HME has been observed in the accounts of Hussain Nawaz Sharif and other individuals in addition to the remittances to accused Nawaz Sharif. Details are as under:

An amount of Rs4.602 million has been remitted by HME in PKR Account No1179530001 of Hussain Nawaz Sharif in Standard Chartered Bank Ltd, Wapda Town Branch, Lahore during 2010-15.

An aggregate amount of Rs273.254 million and $52,460 have also been remitted by HME as detailed below:

Rs51.093 million has been remitted by HME in PKB NC No10190013400101 of one Muhammad Hanif Khan in HBL, New Muslim Town, Lahore in 128 remittances during 2010 to 2015.

Rs173.455 million had been sent by HME in PKR AC No12837900775203 of one Anjum Iqbal Ahmad Akhtar in HBL Wapda Town during 2013 to 2017 in 272 inward remittances.

Rs36.715 million has been sent by HME in PKR AC 1580-79004111-03 of one Abdur Razzaq in HBL Sharif Education Complex Trust Branch, Lahore from Nov 2016 onwards in 52 remittances.

Rs11.991 million has been remitted by HME AC No16997000405003 of one Muhammad Anees with HBL Pakistani Chowk, lcchra, Lahore in 55 remittances.

USD52,460 (Rs5.2 million) had been remitted by HME in USD AC of Khawaja Haroon Pasha maintained with Standard Chartered Bank Ltd, Wapda Town, Lahore in 2014.

Upon receipt of more evidence with regard to inward remittances in various other accounts from HME, the matter was referred to Expert Finance & Accounts NAB (Rwp) for analysis in consonance with the JlT’s analysis on the percentage of remittances.

Request of Mutual Legal Assistance (MLA). The JIT had issued requests for MLA to foreign jurisdictions as contained in Volume-X of the JIT report. Reply to the MLA request forwarded by JIT to KSA has not been received as yet. Accordingly the same is being followed through NAB HQ, the report says.

“The acquisition of the relevant assets i.e. Azizia Steel Company Ltd and Hill Metals Establishment and their respective assets/income is admitted to the pleadings before the Supreme Court as well as during proceedings before JIT and nexus of the accused persons with such assets is established from the record as well. The known and declared sources of income of accused persons at the time of setting up of Azizia Steel Company Ltd, Jeddah and subsequently at the time of setting up of Hill Metals Establishment, Jeddah were inefficient to reasonably explain the acquisition of such assets.

The first entity which came into existence soon after accused persons moved out of Pakistan is Azizia Steel Company Ltd, Jeddah which is claimed to have been established in 2001. Hussain Nawaz himself gave an unsubstantiated estimate of $6 million (Rs330 million approx. at that time) to set up said steel mill. However, his known and declared sources of income, at that time, did not justify nor enable the investment required to set up the said steel mill. If the own stated version of the accused Hussain Nawaz to justify sources to set up said asset is presumed correct with respect to 2001, even then it only accounts for availability of $1.45 million (Rs80 million), leaving an unexplained balance of $4.55 million (Rs250 million).

Hussain Nawaz Sharif was still dependent of Nawaz Sharif and had no known independent sources of income, which indicates that any investment in this regard was actually made by and on behalf and as Benamidar of, his father, from the undisclosed wealth. Sale proceeds of Azizia Steel Company Ltd, Jeddah were claimed to be the primary foundational basis of Hill Metals Establishment. Since the accused persons failed to explain and justify the sources of income that enabled establishment of Azizia Steel Company, Jeddah KSA, therefore, any subsequent asset or proceeds thereof remain the property and pecuniary advantage obtained through corrupt, dishonest or illegal means. The material collected and referred by the JIT established the beneficial ownership of the assets of Nawaz Sharif alternatively to the admitted interest/ownership therein by Hussain Nawaz Sharif.”

The report says that from an analysis of the net profits of HME conducted by JIT, based on a document (i.e. “Auditor’s Certificate dated 19-01-2017) submitted on behalf of Hussein Nawaz Sharif (through CMA 432/17 in GP No29/16 Pages 133-134) in the Supreme Court, it already stands proved from the given figures of the net profits of HME during the period 2010 to 2014 that almost 88 percent of the claimed total net profit made by said entity was transferred to the accused.

Profitability position of HME during 2010-2015 was $9,977,882. Total gift given to MNS in 6 years 2010-2015 was $8,913.307. Percentage of gifts of net profit was 88 percent.

Analysis of Expert Finance & Accounts NAB (Rwp) on additional remittances reveals that the amounts transferred by HME during the period from 2010 to 2014 goes to 98.01 percent of the given figures of the net profits of HME leaving only 1.98 percent for the purported sole owner i.e. Hussain Nawaz.

(1) Funds transferred to MNS $87,60,128 equivalent to 88 percent from HME/Hussain Nawaz as per JIT report.

(2) Balance Funds With HME $12,17,754 equivalent to 12 percent.

(3) Funds transferred to other accounts during 2010-15:

Purported Net Profit of HME = $99,77,882. Total transferred to MNS = $ 87,60,128 equivalent to 88 percent of net profit. Balance net profit $12,17,754. Total transferred to Others $9,99,265 equivalent to 10.01 percent of net profit. Total transferred out of purported net profits of HME = 98.01 percent.”

It is worth mentioning here that net profits of any organisation are computed after charging to the profit and loss account. A certificate issued by a member firm of Grant Thornton International, a globally leading firm of chartered accountants and the fifth largest worldwide, Saudi Arabia confirms that the “net profits” of Hill Metals between 2010-15 were Saudi Riyals 37.427 million, equivalent to PKR 1.029 billion. Not only this, the closing cash balances ranges from PKR 83.215 million to as much as PKR 879.395 million in 2010. At the end of 2013, the closing cash and bank balances were as much as PKR 677.38 million. The closing cash and bank balances that an enterprise has are after all cash outflows. Figures obtained reveal that the actual remittances made by Hill Metals to Nawaz Sharif between 2010-2015 were PKR 938 million. The actual cash generated by Hill Metals during the said years, according to documents which were also available with the JIT, was PKR 4.831 billion, therefore such remittances constituting only 19.40 percent thus and not 88 percent as alleged by the JIT.

The NAB report further reveals that the amounts remitted to the accused, Nawaz Sharif, were largely transferred by him to his daughter Maryam Nawaz and used to purchase landed property as disclosed in her tax returns. The declared land homing of Maryam Nawaz increased from zero in 2010 to Rs804.424 million in 2016 (1431-K) and investment/shares worth Rs26.00 million as per tax return filed with FBR. The property is a consequential gain/illicit proceed of an asset for which the accused persons failed to reasonably account for.

“During 2013 the remittances started coming directly from HME to accused, Nawaz Sharif. The description/reason given for the transfer of amounts clearly established that Nawaz Sharif has a direct interest/stake and is a direct beneficiary of the HME and Hussain Nawaz is just an ostensible owner. The purpose of remittances given by HME in the telegraphic transfer record are personal use, family expenses, family remittances, personal remittances inwards and personal remittances by foreign employee in the KSA which clearly established that HME and accused Nawaz Sharif have a direct nexus where the company is sending money not as a gift, as previously claimed, but for his personal/family use and reflects that he hold a beneficial interest/stake in the company.

From the examination of record of accounts of different individuals, it has been established that HME remitted voluminous money (Rs273.254 million + USD 52,460) in different accounts in Pakistan which are directly/indirectly related to the accused persons: (1) As per bank’s record, Anjum Iqbal is Admin Manager in HME. (2) As per bank’s record, Mr Anees is an Accountant in HME. (3) As per bank’s record, Abdur Razzaq is a Financial Consultant and also working as CFO of Sharif Trust. (4) As per bank's record, Muhammad Hanif declared himself in his banking documents as Private Services in Ramazan Sugar Mills Ltd and residing in Sharif Medical City Hospital, Lahore.

The record revealed that there were unusual transactions in the above said accounts being contradictory to the account profile. The review of the inward remittances received in the accounts does not reflect any regular pattern or structured amounts. On the contrary, the remittances were received in tranches with variation in amounts.

The real source of entire money which has been remitted by HME over a period of time is not reasonably accounted for and is disproportionate to the known sources of income of the accused persons. Plea and justifications of the accused persons tendered so far before Supreme Court and JIT and offered through interviews, speech and address is not found satisfactory/plausible, hence the accused persons failed to reasonably account for the acquisition of assets and allegations against them have been established during the course of investigation.”