LAHORE: The Federal Board of Revenue Thursday confirmed a Benami reference of $50 million against M/s Husnain Exports after more than one and half year of investigation.
The FBR had filed a reference in August 2020 in the Benami case of $50 million by attaching realized/unrealized export proceeds of $47.5 million and immoveable properties of 200 kanals worth Rs360 million.
M/s Husnain Exports was found involved in the Benami export business of pine nuts from Pakistan during the last one decade without realising/repatriating the export amount to the accounts. It was also found involved in under valuation of the exports GDs (Goods Declarations).
Documents available to the scribe revealed that a written complaint filed to the FBR Benami Zone-II Lahore in Oct 2019 by the Benamidar (Sultan Mehmood) himself wherein he had alleged that Mr. Asim Ali had held a Benami business concern i.e Husnain Exports, Benami bank accounts and assets in his name for the sake of concealment of assets, money-laundering and tax evasion.
The FBR Benami Zone-II started investigation by calling the record of alleged Benami bank accounts of commercial banks and the scrutiny of bank statements and account opening forms and banking instruments to ascertain the stance of the Benamidar/complainant.
The FBR also sought the record of immovable properties from the land revenue authorities purchased by Asim Ali through Benami bank accounts. It was found that Asim Ali had purchased 196 kanals in Mauza Mustafabad in Kasur district and four kanals and eight marlas in Mauza Sundar Industrial Estate, Raiwind Tehsil, Lahore. Both the properties were found to be registered in his name and purchased from the proceeds of Husnain Exports, the Benami business concern.
The FBR had also retrieved the record from the State Bank of Pakistan. It also found some of unrealized e-forms issued by three commercial banks in the name of Husnian Exports. The unrealized e-forms as reported by the SBP were found to be less than 50 in number.
Further, the complete export record (copies of 240 Goods Declaration Forms) retrieved from the FBR system revealed that exports to the tune of $50 million had been carried out in the name of Nenami business concern Husnain Export by Asim Ali, the alleged beneficial owner.
Following the investigation, a show cause was issued to the Benamidar and beneficial owner in 2020 and the properties as mentioned above along with bank accounts operated in the name of Husnain Exports were immediately attached.
The analysis of data provided by the complainant unraveled the presence of 240 e-forms issued by the commercial banks out of which 223 belonged to one commercial bank while the same bank had only reported 35 of these 223 e-forms to the SBP. The issue was taken up with the commercial bank that had conceded issuing the forms but it could not produce their copies.
It was further revealed that the trade manager of the commercial bank was already in the FIA custody during the period.
The analysis of exports data further revealed that the beneficial owner had been forming and operating different sole proprietorships in his own name as well for the purpose of e-forms fraud. It was also discovered that Asim Ali had shifted the entire export business to the Benami business concern, Husnain Exports, after its creation. He almost discontinued exports and proprietorship business in his own name after the creation of the Benami business concern.
It was also disclosed that export proceeds of only $450,000 against the actual exports of $50 million conducted through Husnain Exports had been realized/repatriated in the bank. However, the rest of the proceeds still remained unrealized. Further, the tax of millions of rupees was also evaded owing to non-realization of export proceeds. The analysis of GDs also revealed the practice of enormous under-valuation of the exports.
The document stated that the motive of the Benami transactions in the instant case were found to be multi-pronged, including tax evasion, money-laundering, concealment of investments and assets etc. The investigation into e-forms had established without a shadow of doubt that Asim Ali was involved in the manipulation of e-forms for almost a decade. These e-forms had been issued through the banking channel with the help of the banking staff and after the production of the same to the Customs Authorities, which were, subsequently, either destroyed or deleted from the system resulting into a huge loss of tax and foreign exchange.