Two separate cases registered against Tareen, son

ISLAMABAD: The Federal Investigation Agency has registered two separate cases against Jahangir Khan Tareen and his son Ali Khan Tareen over the charges of allegedly committing fraud and money laundering worth Rs3.14 billion. The FIA has registered the cases against the father, son duo under the PPC sections 406 (criminal breach of trust), 420 (cheating of public shareholders) and 109 of the Pakistan Penal Code (PPC), read with sections 3/4 of the Anti-Money Laundering Act.

As per the FIR against Tareen family, the FIA stated that during the course of inquiry, a fraudulent and premeditated scheme of misappropriation of public shareholders’ money by Jahangir Khan Tareen has surfaced whereby JDW (a Public ltd. Listed Company-CEO Jahangir Khan Tareen) fraudulently transferred Rs3.14 billion to an associated private company, Farooqi Pulp Mills Ltd. Gujrat (FPML), owned by his son and close relatives. The transfers, especially after financial year (FY) 2011/12, were patently fraudulent investments, which ultimately translated into personal gains for the family members of CEO JDW .

The FIA further stated that FPML Gujrat was incorporated in 1991, by Mian M Akbar Faruki family, to produce paper-pulp from eucalyptus. This venture was a non-starter ab-initio and was closed after its failed trial-run in 1997. It was a non-starter due to an intrinsic design fault and absence of sufficient raw-material eucalyptus coupled with an impractical idea to convince farmers on eucalyptus farming as the plant drastically depletes water table by consuming a lot of water, which is otherwise scarce in local arid climate.

The material disclosure that FMPL was declared “not a going-concern (especially since FY- 2011/12) and that its operations had been practically shut-down with multiple failed trial-runs, was intentionally withheld/concealed from public shareholders of JDW which amounts to criminal breach of trust (406 PPC) of public-shareholders’ money over which Jahangir Khan Tareen had fiduciary control as CEO,” the FIR stated.

Moreover, during the same period (FY2011/12 onwards) when fraudulent investments were being pumped into the FPML accounts, Jahangir Khan Tareen, Ali Khan Tareen and other family members purchased cash US$ from open market in Lahore in a ‘structured’ manner (i.e. keeping each transaction below FMU’s STR/CTR reporting threshold of US$35,000 to avoid detection). Subsequently, in 2016, Ali Khan Tareen sent approx US$7.4 million to the UK for purchase of properties which makes them liable for Anti - money laundering investigation, the FIA stated.

On the whole, multiple probe teams of federal institutions have made around half a dozen cases of corporate, tax fraud and money laundering involving Rs23.2 billion against PTI’s senior leader Jahangir Khan Tareen and his son Ali Khan Tareen.

The investigation teams of FIA, Federal Board of Revenue (FBR) and Security Exchange Commission of Pakistan (SECP) are conducting criminal inquiry/ investigation of money laundering and financial/corporate fraud against JDW group of companies owned by Jahangir Khan Tareen. These teams are also probing various other sugar mills owned by Maryam Nawaz Sharif, Hamza Shahbaz, family members of Makhdoom Khusro Bakhtiar and Chaudhry Moonis Elahi, Noman Shamim Khan, Mian Rashid and Mian Hanif, Mian Tayyab, Humayun Akhtar Khan and other individuals’ mills.

“A corporate fraud of Rs3.6 billion was committed by JDW through over-valued purchase of associated company JK Farming Systems Ltd. and booking losses through it, a corporate fraud of Rs3.1 billion was committed by JDW through investment in Faruki Pulp Ltd. and booking impairment losses through it,inexplicable transfer of Rs2.5 billion by JDW through non-arm’s cash transfers to various sister entities via Amir Warsi cash boy, inexplicable transfer of Rs.7 billion was committed by JDW to Dherki Sugar Mills (non-arm’s cash transfers) without true and full disclosure in the financial statement,” read investigation teams’ official finding, exclusively made available with Geo News.

The FBR audit team, after evaluating the record of JDW Sugar Mills Ltd. and five other sugar mills from 2015 to 2019 has also created some Rs7 billion tax demand, a senior FBR official revealed on condition of anonymity. “Tax demand notice has not been served on these mills yet. This amount may go up even after the audit team’s proceeding is concluded,” said the official.

But Jehangir Khan Tareen denied the allegations as saying, “FIA’s latest claims against me and my family are totally fabricated. I have already submitted a detailed reply along with concrete evidence in response to FIA’s notice. Unfortunate to see them go on another smear campaign against me & my family without establishing anything illegal.”

“Inquiry has also determined that Rana Nasim Ahmed, Chief Operating Officer JDW (former DCO Lahore/Secretary Agriculture Punjab), being a principal facilitator, had been given huge undue amounts to the tune of Rs600 million approx. per annum from JDW’s accounts. He claims these humongous amounts as salary, bonuses and allied gentlemanly-agreed benefits. This heist on JDW’s funds was being made when JDW Group (CEO Jahangir Khan Tareen), in the last five years, was even showing losses and making a net negative contribution of Rs2.27 billion towards national exchequer (after tax-refunds and subsidy claims). Jahangir Khan Tareen who had fiduciary control over shares of public in JDW Sugar Mills Ltd, intentionally and dishonestly embezzled JDW’s funds through cash-boy Amir Waris, COO Rana Nasim Ahmed and JDW’s finance officers,” reads FIA’s findings.

Jahangir Khan Tareen, however, told Geo News that “These are all fraudulent and made up charges. All my property and assets are declared and tax paid. FPML was genuine. FPML was a genuine business investment, which went into losses. All funds sent abroad were from legitimate tax paid income and through banking channels and all was declared in tax records.”

The FIA probe teams got the name of JDW’s Chief Financial Officer, Rana Nasim, on blacklist who could not leave the country, informed officials said who believe that he is presently chief of operations of JDW and the real brain behind sugar and sugarcane empire of JKT. They further said the FIA summoned Jahangir Khan Tareen and his son Ali Khan Tareen six times for appearance but they failed to show up at FIA Lahore’s office, they added. Currently, Jahangir Khan Tareen and his son are facing three FIRs personally and six other FIRs against Satta Mafia (JDW included as a Group) in this list, they further said.

Officials associated with this investigation also revealed that the accused, both the son and father, were required to explain the due diligence measures (as per statutory financial prudence standards) they took (or failed to undertake) while making huge investments amounting to Rs3.15 billion in a private but related company (Faruki Pulp Mills Limited) by a listed public company (JDW), which was under Tareen’s fiduciary control.

Officials further revealed that Tareen was also asked to explain the huge cash withdrawal amounting to Rs2.2 billion from the accounts of a public listed company under his fiduciary control through his trusted cash boys and its personal utilisation without true documentation in the books of accounts.