Pak officials, politicians, businessmen held accounts in Switzerland

ISLAMABAD: A married couple was among 44 people held accused of operating a Ponzi scheme in Karachi and in its surroundings which is remembered as Alliance Motors scam. Muhammad Ismail Ishaq and his wife, Fatima, admitted before NAB investigators that they had an account at Credit Suisse and at five other foreign banks.

The husband was willing to enter into a plea bargain but Fatima was reluctant. In her possession were the secret codes of their accounts held in foreign banks, NAB documents reveal. She thought the couple’s sacrifices would make their children’s life comfortable with the money they would leave behind them. But finally, she surrendered too, much to the excitement of investigators.

The NAB was happy at this conclusion because the recovery it could manage though confession was not possible by other means. However, the couple outsmarted the NAB. In 2003, they entered into a plea bargain, paid $1.8 million which was 80% of the amount they held in all foreign bank accounts and won the freedom. Major shares went from Credit Suisse where, the couple said, it had $1.2 million.

Now, the leaked data of Credit Suisse reveals that the couple lied about the actual amount. The account which was opened at the peak of Ponzy scheme in 1987 reported the maximum balance of 2 million Swiss francs in June 2003 and the amount declared to NAB was only 60 percent of the total shown in the balance. An undertaking given in August 2003 suggested that the family would submit the account statements of the foreign banks by September end that year. However, The News couldn’t trace the statements in the record of the case submitted in the court. Muhammad Ismail didn’t answer the questions.

Other than this couple, there are several individuals who opened accounts at Credit Suisse before, during or after the NAB investigation. Included among them is the one of the richest Pakistani accounts found in Credit Suisse. A Pakistani banker who operates from the Middle East held more than 700 million Swiss francs standing at the top.

Senator Haji Saif Ullah Khan Bangash, though distant second in the ranking of the richest account holder Pakistanis, received a maximum balance of 105 Swiss francs millions in 2009, a year before the NAB filed a reference against him on bank fraud charges. His sons, Shuakat Ullah Khan and Kifayat Ullah Khan were co-accused in it. The account was opened in 2008, midway through the NAB investigation, and it was closed in 2011. The NAB apparently never learned about its existence.

The NAB case remains pending with little impact on the Bangash family’s fortune which became a major shareholder in Silk Bank, owned by the Finance Minister Shuakat Tareen. Kifayat Ullah is among the family members holding the bank’s shares. While the fate of NAB reference hangs in balance, Haji Saif Ullah passed away in 2018 shortly before the expiry of his tenure as Senator. He was elected to this office in 2012, a year after the closure of the account. Shaukat Ullah, his son, expressed ignorance about the account. “I have no knowledge of what you are writing …. Plz tell me in detail so we can claim that amount as legal heirs too.”

Another running inquiry which found some answers from the leak is related to the purchase of properties in London. Sons of Mian have been under scrutiny of the Federal Board of Revenue (FBR) which wanted them to explain the source of funds. Mian distanced himself from the deal when summoned by the FBR. He said he didn’t have any financial stake. His sons said their foreign-based company obtained loans from two companies in British Virgins Islands and Guernsey. The FBR wrote to the both jurisdictions; only Guernsey responded and said the company under reference never existed there.

Now leaked data reveals that the company has a joint account with Mian and his wife. The couple held two accounts which appeared in the data and one of them was the company account that they co-held with the company. Balance in this account swelled to 18.5 million Swiss francs in 2012. Information shared by the family with the FBR said the company granted a loan of $20 million in late 2010 whereas this account received a balance close to that amount two years later. It remains unexplored whether the financing was done through this company or it is just a name-sake. Mian family didn’t respond to questions sent in the middle of January which followed reminders a couple of times. But sources close to the family say everything that requires legal disclosure as per current and applicable laws of Pakistan have been followed and all such declarations have been also done.

The Lax family has also made it to the list. They held individual and joint accounts with their immediate family members between 2004 and 2010. Cumulatively, they held almost 60 million Swiss francs. The accounts were all shut down in 2015. Lax family didn’t reply to requests for comment. However, sources close to the family say all applicable laws of the country have been followed and no illegal activity can be pointed towards.

The family who used to own a small bank also held two accounts. The first one opened in 2001 when they were being hounded by the NAB in a loan default case. The other account remained operational from 2010 to 2015 and held a maximum balance of 1 million Swiss francs. Responding to questions, they acknowledged they held the accounts and said there was nothing wrong in it. They said they faced political victimisation from 1996 to 2005 through accountability apparatus and shared a document signed by the NAB prosecutor general which said the accused were not indulged in acts of corruption and asked the court to dismiss the charges. The family also maintains that all current and applicable laws have been followed.

The members of Gen Akhtar Abdul Rehman’s family also held accounts. They were opened in 1985 and 1986 when Akhtar was DG ISI. The account swelled to above five million Swiss francs in 2003 and the other one single-handedly operated by a family member received a maximum balance of over nine million Swiss francs in 2010. In account records, they were registered as Canadian citizens.

General (retd) Akhtar Abdur Rahman's son Haroon Akhtar Khan said that it was said the Swiss account was opened in 1985, when his father was fighting the Afghan jihad. Talking to Geo TV, he said his father had died in 1988. “If my father was to be implicated, then why and for which money,” he asked, adding that the information in the media was not correct. “It is based on speculation. The newspaper wrote that he was not accused in any way in 40 years. He fought a great successful jihad, as a result, the Soviet Union broke up and the world changed,” he added.

He said, “We've got here, starting with a small business. We're being singled out because of the success of our business. We brothers are all independent, ask us questions, why blame our father? The bank in its statement has also expressed concern about the hidden purpose behind the leak. The information is taken from a biased source. They have blamed my father, is it a journalistic norm?”

Haroon said the information presented is not only distorted, but bank itself officially admitted that these information are based on biased and one sided analysis. He added, “If our father is alive and we open an account in a bank should it be considered our fathers account. We are thinking to challenge.”

Credit Suisse, meanwhile, strongly rejected the allegations and inferences about the bank’s purported business practices. It said many of the accounts in the leak date back decades to “a time where laws, practices and expectations of financial institutions were very different from where they are now.”

Credit Suisse said it can’t comment on specific clients, many of the accounts identified in the leaked database have already been closed. “Of the remaining active accounts, we are comfortable that appropriate due diligence, reviews and other control related steps were taken, including pending account closures,” it said. It said that the bank and Swiss financial marketplace has undergone significant changes over the last several years.

A couple of other political families which are not strangers to anti-corruption inquiries held accounts at Swiss banks. Former Senator Waqar’s family is one of them. Back in 2000s, there was a time when father, Gulzar Ahmed Khan, and his two sons, Waqar and Ammar were senators. It was in that duration they opened an account at Credit Suisse which reached a maximum balance of 9.8 million in 2008. None of them mentioned it in the annual assets declaration they made to the Election Commission of Pakistan. The account was closed in 2013, the year they were forced by a London court to repay a loan to Deutsche Bank. The litigation revealed properties in Pakistan they used as collateral for the loan but had not declared in tax returns. Pakistan Federal Board of Revenue then assessed their tax returns and concluded that the businesses in Pakistan were running into losses even as they accumulated assets abroad. Questions were sent but they were not responded to.

Punjab’s finance minister, Makhdum Hashim Jawan Bakhat, and his brother, Omer Sheharyar, were also clients of the bank. And the account they maintained was one of those held for the shortest duration of less than one year. Opened in March 2011, it was closed in February 2012. It held a maximum balance of 2.76 million Swiss francs in November 2011. The NAB launched an inquiry against the family in 2018 and determined that their assets ballooned into billions after the elder brother, Makhdum Khusro Bakhtyar became minister for the first time in 2004. In this inquiry, it mentioned the foreign remittances of $708 million received by the family starting from 2011 to 2018 with the most going to Shehryar. There is no indication the NAB ever identified the source of the remittance.

Also, back in early 2000s, when the National Accountability Bureau was investigating Lt Gen (R) Zahid Ali Akbar and froze assets it suspects he owned but kept in the name of others, he thought of a plot that NAB would never know.

Leaked data of Credit Suisse bank reveals he opened a company account there right in the middle of investigation and closed it barely a month before the NAB filed a corruption reference against him. Four months before its closure, the account held the maximum balance of 15.5 million Swiss francs ($11.8 million).

The NAB then linked 77 accounts with Zahid Ali Akbar and multiple properties which were owned by him and the family members. Back then, the investigators could determine that the retired general had sold a couple of properties during the course of investigation which was an offence under the law. What they didn’t know was the account he opened at Credit Suisse and stashed away millions of funds into it.

In response to questions, Zahid Ali Akbar confirmed he opened the account in that period but said the funds didn’t originate in that period. “All funds stand declared to the tax authorities in Pakistan and the tax stands duly paid thereon as per law,” he said but didn’t respond when asked why NAB couldn’t trace this account then.

Zahid was in the engineering branch of the army. He oversaw the construction projects of Kahuta Research Laboratory and General Headquarters before he headed Water & Power Development Authority and Pakistan Cricket Board.

Although NAB held him to account for the assets he made from 1985 onward, it traced more than a dozen residential, commercial and agricultural properties that he made before that period, court documents reveal. The first purchase he made in 1959 of 12-kanal house at Sarwar Road, Rawalpindi when he was captain-rank officer in the engineering branch of the army.

In total, the NAB could assess his assets of worth Rs267,609,874 which it said was beyond his known sources of income. After his benamidars filed petitions, the assessed amount was revised down to Rs199,979,273. After the latest disclosure of Credit Suisse data, the assessed amount looks like a fraction of what he had in the Swiss bank where the account was opened in 2004 and closed in 2006.

Zahid Ali Akbar had raised objections even on the payment of Rs199,979,273 (around Rs200 million) which he did after a plea bargain that he made with the NAB in early 2016. In a petition filed later, he said he was charged extra amount under the head of incidental charges, consequential gains and KIBOR charges and demanded the return of Rs90 million.

Whether this Credit Suisse account is the only one he had in Switzerland remains unexplored. In 2012, an official said, NAB received information from the UK authorities that a Pakistani had deposited a fat cheque in London for a bank in Switzerland. Pakistan was informed, he said, because the person under question was wanted to NAB which had already issued his arrest warrants.

Instead of handing him over to Pakistan, the UK made us aware of his banking activities. “These countries have their own interests,” the officer said. They were required to inform us because they couldn’t withhold the cheque for more than a month, he said. Asked why that accused couldn’t be extradited, the NAB officer said that it could not happen because Pakistan didn’t have an extradition treaty with the UK. The official however refused to divulge the identity of the accused about whom the information was shared.

As for Zahid Ali Akbar’s case, the investigation started in 2001 and the reference was filed in July 2006. By then, the retired General had flown abroad. The accountability court declared him absconder and red notices were issued. In 2013, he was detained in Bosnia. Instead of his repatriation to Pakistan which was apparently impossible because Pakistan didn’t have an extradition treaty with Bosnia, the UK government helped him travel back to London. Zahid is said to be a British citizen. He didn’t reply when asked about it.

In 2015, he pleaded guilty of corruption charges and filed a plea bargain which was approved in early 2016. The charges were withdrawn in exchange of Rs200 million which he paid then.