Senate panel wants law against illegal Modarba investors

ISLAMABAD: A Parliamentary panel of the Upper House of the Parliament on Thursday asked the government to prepare draft law for prosecuting those who made massive investments in Modarba and Double Shah like illegal schemes out of mere greed.
During the proceedings of the Senate Standing Committee on Finance meeting held under chairmanship of Senator Saleem Mandviwalla here at the Parliament House, the National Accountability Bureau (NAB) informed that they have decided to file review petition in the Supreme Court after Mufti Ehsan the main accused in the multi billion Modarba scam was granted bail by the Islamabad High Court.
“We have arrested a renowned religious personality from a mosque as he used to misguide people by using name of modarba scheme. We arrested him when he was sitting in Etikaf,” Director General NAB, Mohammad Hasnain testified before the Committee.
The NAB official also mentioned that there was maximum imprisonment of 14 years but Double Shah got bail and now Mufti Ehsan was also released on bail. Out of 36 accused in modarba scam, 16 were arrested by NAB. In mufti Ehsan case, the scam amount stood at Rs8.2 billion with affectees’ number stood at 10,000 while in another case the number of affectees was 25,000.
He said that NAB has recently received claim of Rs400 million in Modarba scam and when it was thoroughly investigated, it was found that 600 people from remote area had handed over that money to the accused.
The Chairman of the Committee Saleem Mandviwalla asked Finance Ministry, State Bank of Pakistan (SBP) and Security and Exchange Commission of Pakistan (SECP) to come up with draft law for prosecuting those who made investments out of mere greed. Senator Ilyas Bilour inquired from the SECP about action taken by the regulator against registered modaraba companies in case of wrongdoing. One NAB official pointed out that some companies registered as private limited were misguiding people by writing modaraba scheme. The SECP admitted that it was happening and there was need to impose a bar by amending the laws.
The committee refused to approve the amendments in Anti Money Laundering (AML) law in its existing shape as tabled by the federal government and decided to further deliberate to ascertain exact list of offences of tax laws for making it part of money laundering law.
An independent advocate on international law Mr Mohsin who was invited by the Committee recommended to include only serious offences such as tax frauds into the list of money laundering to make it in accordance with best international practices. He cited an example that India was making plans for including foreign assets obtained through illegal or untaxed money as part of the law against money laundering.
The FBR officials argued that they proposed Rs1 million in shape of income tax and Rs5 million as Sales Tax as ceiling for making cases through proposed amendments in AML with the condition that the committed tax fraud had exhausted two forums till tribunals.
But Senator Ilyas Bilour told about his own case when he was asked to give Rs7.5 million for getting favorable decision at the tribunal level but when he did not oblige the decision was made in such a way that higher tax rate was imposed on him but he approached the high court against the decision of the tribunal.
The Committee also took up alleged corruption in privatisation of MCB. They wondered that when the NAB official informed the Committee that they possessed photocopies in 21 folders that they got from the SBP in this case. When the NAB official was informed that in the last meeting they confirmed that the original record was available with them but the NAB official categorically stated that the investigation team did not possess original record of this case.
“We have held meeting with Secretary Finance to get record of this case and written to them as well,” he said. The Finance Division replied that they did not possess original record of this case and whatever would be available it would be handed over to NAB,” he added.