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By Ahmad Noorani
Wednesday, December 12, 2012
From Print Edition
 
 

 

ISLAMABAD: National Accountability Bureau (NAB) is in possession of all the evidence regarding involvement of a top Federal Bureau of Revenue (FBR) executive in a case of transfer of huge amounts of money in accounts of his teenager son, which the officer and his son have failed to justify.

 

World Bank reports show tax evasion of around Rs700 billion and this is mostly done in connivance with top officials of FBR. However, everything is done in a very calculated and concealed way and rarely any evidence comes out.

 

But, in the present case, almost all the transactions have been traced with help of different financial institutions and accused persons have failed to justify possessing and using such big amounts of money.

 

Currently, the accused officer, Israr Rauf, is senior member policy (Inland Revenue) and holds the second highest position in FBR. His picture is displayed along with the pictures of the chairman and finance minister Abdul Hafeez Sheikh on FBR website.

 

Besides, many complaints in NAB regarding irregularities in issuance of refunds at FBR Karachi office during 2007-09, Rauf faces a serious scandal in which an amount of US$51,400 was deposited in his son’s account and not only both the son and father failed to show the source of income but also statements of both were contradictory on the question of the source of income.

 

Israr Rauf on being approached by The News admitted the case in NAB which also involved his son. “All this is baseless,” Rauf however said in a short reply and avoided going into details. Despite repeatedly requested to give his detailed version on specific points of the case, Rauf did not respond to any query. He plainly said that all the allegations in the case before NAB were baseless.

 

Documents available with The News establish that around Rs5 million were deposited in accounts of his son Noor Israr Rauf in 2009 and accounts (1- A/c No: 9014040967, a US dollar account, opened on August 25, 2009 and was closed on December 1, 2011 1- A/c No: 1003972093, PKR account, opened on May 22, 2009 and closed on the same date December 1, 2011) were showed as a salary accounts.

 

After complete investigations and verifications, it was established that Noor Israr Rauf was accused of:

 

i) Customer account activity is not in line with the profile of the client.

 

ii) Utilization of funds is not clear.

 

iii) There were contradictory statements regarding customer profile.

 

iv) customer failed to provide any documentary evidence for his new employment/educational institution.

 

Investigation establish that a teenage boy showing his date of birth as May 26, 1989, who passed the matriculation exam at the age of 15 years, could not complete four years of graduation from a British University at the age of 17. He tried to portray during the probe that he was given a job with a monthly salary of Rs441,526 on the basis of his British graduation at the age of 17. Noor, also claimed doing a lucrative job in Pakistan but did not even have a NTN number.

 

Following excerpts from the documents of investigation give complete detail of this disgusting corruption case;

 

“As per Bank’s KYC document dated 21.5.2009, it was mentioned that Noor is a salaried individual and working since the age of 17 years. According to the document, Noor did Matric when he was 15 years old and Bachelors from Keele University UK when he was only 19 years old. It was mentioned that he used to work in UK as a Marketing Executive in a foreign firm called ‘Regina Industries’ and used to earn GBP700 per week. On his return to Pakistan started working in the company, Instaplast, as a director for business development and drawing monthly salary of PKR120,000/-.

 

Further, the source of funds declared at the time of account opening was wages from the employer. It was also mentioned in his KYC form that he had been maintaining account in Habib Metropolitan Bank (HMB). However, HMB denied having maintained any banking relationship with the suspect Noor Israr Rauf.

 

The Financial Monitoring Unit of NAB (FMU) obtained company information on Instaplast from SECP which indicated that objects of the company were to establish works, factories, and other industrial or commercial undertakings inside and outside Pakistan for the manufacturing of plastic moulded articles, hollow objects, plastic crockery, utensils, cans, caps, preforms, bottles, closures, toys and/or any other items of industrial or domestic use, and printed polyethylene sheets and bags. “As per Form 29 dated 31-10-2011, following were the directors, chief executive of the company; Schehram Majeed Siddiqui (CEO), Shahid Sattar Assad Maqbool

 

The bank reported the suspicion in Noor Israr Rauf’s USD account (9014040967) in July 2011 on the basis of factors as indicated in column 21. From Mar 2011 till July 2011, Noor had deposited funds in multiple transactions amounting to USD 51,400 in cash mode in his USD account. On the other hand, USD29,842 were withdrawn via ATM in 58 separate transactions and USD1,530 was spent on various merchants in 109 transactions. These funds were withdrawn from ATM machines or at various retail merchants in the USA and Dubai. As per information provided to bank, expenses recorded in the bank statement of Noor pertained to his living expenses in the US when he was there for training. Source of funds were explained as father’s savings which have been generated during his employment.

 

It is important to note that father of Noor Israr Rauf is Israr Rauf who is presently Member and Director of Tax in FBR. In contradictory information provided to bank by the suspect in July 2011, disclosed that he qualified CSS exam and joined Sindh Police as an ASP and that he was sent to USA for training. Upon further investigation, his father Israr Rauf informed the bank that Noor did not join the police but has gone to USA for further studies and he will be supporting his son during this tenure. The bank asked for the documentary evidence regarding his employment in police or educational institution but the suspect refused to provide any documentary evidence.

 

FMU has analysed the Noor’s account statements of both (PKR, USD) accounts from the date of account opening till Nov 2011 and observed similar pattern of transactions in both the accounts. The funds were deposited in cash followed by withdrawal in cash or through Retail merchants. Both the accounts were closed on Dec 01, 2011.

 

The analysis of accounts mainly indicates cash transactions. The cash deposits followed by withdrawals in cash have been observed. The amount involved during the highlighted period is quite high for a student who is supported by his father. Also, the customer’s father has misled the bank by providing contradictory statements regarding customer profile. As per information, Noor’s date of birth is 26.5.1989. It is difficult to believe that a person who has completed Matric at the age of I5 years (as disclosed) can complete Bachelor’s degree at the age of 19 years given the number of minimum years required to complete post-matric qualifications viz. A-levels (at least 2 years) and Bachelor from UK (at least 4 years). Likewise, the disclosure that Mr. Noor was working as Director in a company at the age of 20 years (as disclosed in May 2009) also sounds unbelievable. It appears that the company is being used to camouflage the unexplained funds at the disposal of Noor or his father.

 

As the sources of funds being routed through the account of Noor Israr Rauf are suspicious and considering the fact that he is the son of Israr Rauf who is Member Tax/Director in FBR, the unexplained proceeds in the accounts of Noor and subsequent expenses out of that account may be linked to possible acts of corruption on part of his father Israr Rauf. Moreover, it is also possible that Noor or his father might be holding assets with other financial institutions. Therefore, the financial intelligence is being shared with NAB for necessary action under the provisions of AML Act, 2010, under advice to this office.”

 

Before this FBR and FIA have thoroughly investigated massive fraud of refunds of sales tax at FBR Karachi office in the duration 2007-09 but unfortunately no action was taken against those responsible.