Money-laundering: LHC quashes FIA case against Moonis Elahi

LAHORE: The Lahore High Court (LHC) on Monday quashed the money-laundering case instituted by the Federal Investigation Agency against Moonis Elahi, the son of PMLQ leader and Punjab Chief Minister Pervaiz Elahi.

The verdict on Elahi’s petition seeking dismissal of a money laundering case filed against him by the FIA (Federal Investigation Agency) was issued. Earlier, a banking court had issued notices to Moonis and others for October 11 in the money laundering case after the FIA filed a challenge in that matter.

The petition stated that the FIA’s money laundering case against him was the result of “political engineering,” as the government wanted to hold his media trial. The court summoned lawyers from both parties for their final arguments.

The petitioner contended that the NAB law supersedes all criminal laws and that the accountability bureau had already given him a clean chit in the cases. Hearing the two sides, the LHC quashed the case.

The FIA challenge submitted to the court claims that in October 2007, Muhammad Nawaz Bhatti, together with his cousin, Mazhar Abbas, set up Rahim Yar Khan Sugar Mill, in the first month of his job as a peon. Mazhar was a student then.

Once Nawaz and Mazhar became partners, the then Pervaiz Elahi administration processed the case in quick succession, granting them permission to run the mill. Nawaz owned 31% of the company, while Mazhar owned 35%.The value of the capital increased by Rs720 million in 2008, but the source of funds remained unknown.

They disposed of shares between 2011 and 2014, but the sale and purchase again remained unexplained. The challan states that after passing through different hands by an ingenious strategy of corporate layering whereby proxies were used to acquire shareholdings of the mill, they were transferred to Chaudhry Moonis Elahi and his family. Mazhar, once a significant shareholder of the mill, got a job in the revenue department, and Nawaz is still a peon.

Muhammad Nawaz Bhatti and Mazhar Abbas are relatives of Muhammad Khan Bhatti, who started his appointment as a BS-7 clerk and is now a BS-22 officer. At present, he is the Punjab CM’s principal secretary.

An FIA investigation into the money laundering case indicates the two families were used for laundering funds. The key role was played by the Bhatti family, and the Awan family acted as intermediary during the course of layering.

As for the Bhatti family, Sajid Bhatti’s brothers and their other relatives were instrumental. A nephew of Muhammad Khan Bhatti, Sajid is PMLQ’s parliamentary leader in the Punjab Assembly. In this case, Wajid, his younger brother, is co-accused with Moonis. He tried to hoodwink the FIA and to safeguard Moonis by saying that the investment in the sugar mill was made by his father, the late Ahmed Khan Bhatti.

The late Bhatti, Sajid argued before the FIA, used Nawaz and Mazhar as proxies to invest in the mill, but he failed to prove that the family had enough means to make this extraordinary investment. There is yet another member of the Bhatti family, Qaiser Iqbal, who was appointed peon in the Punjab Assembly in 2019 when Elahi was speaker.

According to the challenge, Qaiser had transferred at least Rs239 million to Moonis Elahi’s family, including the companies owned by them, between January 2014 and June 2021.

Likewise, Rasikh Elahi, younger brother of Moonis, credited Rs10 million to the bank account of Qaiser, says the challan. He told the FIA that he had opened the accounts on the directions of Wajid and that the signed cheque books were at Wajid’s disposal.

Abid Ahmed Khan Bhatti, brother of Wajid and Sajid, deposited Rs177.8 million in the fake accounts opened for corporate layering. Muhammad Khan Bhatti, yet another relative of Muhammad Khan Bhatti, deposited Rs2.1 million in cash.

Sohail Asghar Awan left a bank job. He, his family members, and relatives acted as intermediaries during the course of layering. Among them were Raza Awan, Nasira Rehman, Sajid Sohail, Irum Amin, Sumbal Rehman, and Arshad Iqbal. According to the challan, Munir Hussain, now CFO of a mill, and his wife, Bilqees Fatima, were also instrumental in this process, according to the challan.

From there onward, the FIA claims, shares and funds were transferred to three offshore companies: Salviati Investment Limited, Cascade Tek Private Limited, and Axe Capital Private Limited. The former, according to the challan, transferred shares to Moonis’s mother-in-law, who subsequently transferred them in the name of her daughter. According to the challan, Cascade is owned by Moonis and Axe by another female family member. Another shareholding company, 31-A Estates Limited, is also owned by the Elahi family. The challan claims that two Pakistani companies of the family, Agro Tractors and Al-Tahur, were also used for the layering purpose.

The investigation has further noted that all the intermediate layering transactions (sale/purchase of shares between the above-mentioned individuals) have been made purportedly through cash transactions “which is very unusual and indicative that these were no more than carefully orchestrated paper trades aimed at layering the transfer of shares to the ultimate beneficial owner. Moonis and his family own 50.82 percent of the company’s shares directly and indirectly, while CFO Munir Hussain and his wife, who were also intermediaries, own 6%.

Moonis Elahi denied any links to Nawaz Bhatti and Mazhar Abbas in his response to the FIA’s 33 questions in the case. In the response, submitted in June this year, Moonis denied knowing Bhatti and Abbas or the fact that they were government employees.

He also answered in the negative to the question that if he knew that the two held shares in Rahim Yar Khan (RYK) /Alliance Sugar Mills; if he had provided any financial assistance to them; and if he knew that Bhatti was a signatory to at least 32 bank accounts with a credit turnover of around Rs24 billion, etc.

Moonis also denied using the influence of his father, Pervaiz Elahi, to secure a no-objection certificate for setting up RYK Sugar Mills. In response to the question on the facts of the case, indicating that an orchestrated scheme of “corporate layering” was employed to disguise the beneficiaries of RYK Sugar Mills, the PMLQ leader said the allegation was “incorrect and misconceived” as all his shares were “duly declared”. He said that he did not have any role in the establishment of the RYK Group.