ISLAMABAD: The politically-exposed persons (PEPs), businessmen and individuals from Pakistan who have been named in the Pandora Papers have submitted detailed replies to the questions sent by The News.
Finance Minister Shaukat Aziz, while responding to the ownership of offshore companies registered in Seychelles and Isle of Man i.e. Triperna Inc, Hamra Inc, Moonen Inc, Seafex said, "I confirm being part of the above companies directly or through my family members for the sole purpose of raising capital for my bank."
When asked if he could confirm or deny if these companies were incorporated in 2014, he said, "The off-shore companies mentioned were incorporated as part of the fundraising process for my bank. We were in negotiations with a Middle East conglomerate for raising capital for my bank, through a structured transaction. The proposed investor had also taken the central bank’s in principle approval for investment in the bank."
He was asked: "Can you please confirm the nature of business these companies handled?"
Tarin replied: "The companies remained dysfunctional and no transaction was conducted through the said companies. No bank accounts were opened in the name of the said companies nor was any financial transaction conducted, by the same."
Q: Can you please confirm the amount of investment that went into these companies?
Tarin replied: "The companies remained dysfunctional and no transaction was conducted through the said companies. No bank accounts were opened in the name of the said companies nor was any financial transaction conducted by the same."
Q: Can you please confirm if these companies are still active?
"No bank accounts were opened in the name of the said companies nor was any financial transaction conducted by the same. Since the negotiations with the said company could not reap the required results, these companies eventually wound up as per the applicable laws."
Q: Can you please confirm if one Tariq Fawad Malik was handling these companies on your behalf?
Tarin said: "Tariq Fawad Malik was affiliated with the said Middle East Company at the relevant time and hence was facilitating in the said transaction."
The family spokesperson of Chaudhrys said that in the past, due to political victimization, misleading interpretations and data have been circulated in files for nefarious reasons against the family in the name of so-called accountability. The spokesperson added that the assets of the family, including Chaudhry Pervaiz Elahi and Chaudhry Moonis Elahi are declared as per applicable law.
Pakistan’s former ambassador to the United States Ali Jehangir Siddiqui said, "As a Pakistani whose source of wealth is stock options in a technology investment firm where I started my career in 1999 and the company went public on the Hong Kong Stock Exchange in 2000, I have various investments globally. As a responsible individual, I make appropriate tax filings in all jurisdictions where they are necessary. In addition, these companies were set up before any government assignment or position."
Managing Director National Investment Trust (NIT) Adnan Afridi in his reply to The News said, “I have received your email pertaining to your current investigation into offshore finance and the use of tax haven jurisdictions to potentially engage in money laundering, tax evasion and other illicit activities. However, in this instance as indicated in your preamble, there was a legitimate reason for using an offshore corporate entity. Regarding your specific questions, I am happy to make full disclosure and my response is as follows: I did register Veritas Advisory Services Ltd (Veritas), in the BVI in October 2011 for approximately Rs7,500 only paid from my Pakistan credit card. I was partially based in UAE at the time trying to develop an on-line strategy consulting practice.”
According to Afridi, the purpose for the acquisition of Veritas was that "I urgently needed a corporate entity for a time sensitive international strategy consulting bid that did not allow individual proposals but required bidders to have a corporate entity. As you may be aware of my resume, I am a trained lawyer from Harvard Law School, and I have worked internationally during 1995-1998; 2001-2005 and 2013-2016. The reason for opting for a BVI entity was simply the low cost, ease of acquisition and its international standing (it was included in the acceptable list of jurisdictions by the consulting bid platform at the time). It took me literally a few minutes to purchase an off the shelf, readily incorporated legal entity for Rs7,500. Such efficiency was simply not possible if I had even tried at that time to incorporate a Pakistani private limited company (although that has changed now considerably) and a UAE entity was too expensive for a professional trying to build a small consulting practice. As it turned out, my consulting bid was unsuccessful and after a few months of further attempts I returned to Pakistan with full time employment. I can further state with full confidence that Veritas was not used to open any bank account or used in relation to any offshore bank account or transfer or holding of funds whatsoever. At no point was Veritas operationalized in the sense of having any income, transaction, or assets. It remained completely dormant during the entire tenure of its existence beyond submission of a couple of unsuccessful consulting bids."
Moreover, he said, that Veritas was struck off the Register of Companies in the BVI in December 2017, "two years prior to my appointment as Chairman NIT. Given the fact that Veritas was a dormant entity even prior to that, and with no asset or capital except US$1 which is the regulatory requirement (yes, only one US dollar), there was never any question of any conflict of interest with NIT or any other employer. Please be assured, that I take conflict of interest issues very seriously and would not in any way seek to compromise the same. Being struck of the Register of Companies in BVI ensured that the company was not able to be used again.
“I had one share of US$1 in Veritas. Veritas did not have any capital, business, bank account, operation or income at any period of time whatsoever. Therefore, given the fact that there was no income, and it was a dormant entity of a value of US$1, the cost was charged of as expense and declared as such in tax returns instead of showing it as an asset in wealth statement (as advised by my tax counsel). If any income had been generated or the company had formally started operating, then clearly, I would have made the necessary declarations in the relevant tax periods as I do so for all my income or assets.
“I hope the above answers satisfactorily answer your concerns. While I am not a politician, I strongly believe that one should be transparent in all their dealings and am happy to assist you in this effort,” he commented.
Former finance minister Ishaq Dar’s son Ali Dar, while responding to The News queries, said, "Yes, the said two companies were registered in the British Virgin Islands. In 2017, the request for the change of registered address had nothing to do with any investigation relating to my father. It was done because the email address to which the communications were sent till then by the Registered Agents had ceased to operate as it was an email address that came with the dial-up internet connection of Etisalat based on an old technology, having an “emirates.net.ae” suffix. Under the circumstances, the Registered Agents were accordingly informed about the new email address together with the associated P.O. Box number in Dubai.
"I have never been a tax resident in Pakistan nor have I ever been involved in any professional, employment or business activities whatsoever in Pakistan. Ever since I graduated from UK, which was almost two decades ago, I have been settled and working in UAE where there has never been any taxation (except for the recent introduction of notional VAT that applies on limited transactions); so there was no question to look for any Tax Haven. Similarly, there has never been any need for a Secrecy Haven as my business is lawful and bonafide with complete disclosures to UAE authorities as per UAE laws, rules and regulations, as well as it is subject to the yearly independent audits as per International Auditing Standards. One of the world’s topmost auditors (known as Big 4) had been our auditors and, as part of their “Know-Your-Client” procedures and practices, they don’t even sign-up a client until and unless they are fully satisfied about the bonafide, lawfulness and legitimacy of the business of the client. The said two companies incorporated in BVI were done solely for the purposes of ease of registration, lowest corporate incorporation fee and nominal annual renewal charges.
"Therefore, I am pleased to confirm that both companies were incorporated for legal purposes, and always acted accordingly, and were in no way meant for, or ever engaged in, money laundering, tax evasion or any other illicit activities.
“It is pertinent to note that Dar Al Nahayan Ltd remained a dormant company and no business was ever done in that company which was closed/struck-off the Register in November 2012. With the passage of time, the local freezones in Dubai like JAFZA and DMCCA started offering much more practical, efficient and economical basis for registration and operation of companies in Dubai, so the second company i.e. Baraq Holdings Ltd, which had become dormant for many years (prior to 2017) was also closed/struck-off the Register in 2018,” Dar said.
President National Bank of Pakistan Arif Usmani said, “All my tax records have been provided to FBR and every asset I own internationally or locally declared in my wealth statements filed with FBR. I hope you realize that I have a 40 year banking career and spent 26 years outside Pakistan in senior positions with four international banks. I created a family trust to manage my wealth and inheritance issues in a perfectly legitimate and standard manner under advice of my bankers. All my wealth was acquired legitimately from salary, bonus and investment gains. I appreciate your queries but I don't feel I owe any specific explanations of what is an entirely private matter which has already been fully disclosed to the authorities responsible,” he said.
Dawn media group’s CEO Hameed Haroon said, “Please be advised that the entity mentioned in your letter has been duly declared, and is being reported, to the relevant authorities in Pakistan in accordance with the applicable laws of the land.”
Owner of Peshawar Zalmi Javed Afridi, while responding to The News queries, said, “My reason to incorporate was in good intentions. It was for tax saving not avoiding. I was told by a friend (relative) of mine, who is a British national, that we can take advantage of Capital Gain Tax in Britain.”
“As a non-UK resident, I will be able to buy properties and sell to make a gain and will not suffer any Capital Gain Tax. This seems to be a usual tax saving on property business. I was not to finance the purchase. That will be his part. This decision took place in 2014 and I decided to have those three companies incorporated. Unfortunately, the companies could only be incorporated in May 2015 due to KYC issues in UK. The tax laws changed, and the benefit of offshore persons and companies was withdrawn. This was to take effect from April 2015. So, the companies were almost dormant. No business, no investment was done by any of the companies I owned. Hope the above will give you some idea as to my somewhat simpler intentions to make some profit without my involvement abroad. As a businessman, I will take a chance to take opportunity to make money. I also accept that it does not always work,” he said.
Mian Raza Mansha, in his reply to The News, said, “Thank you for your trailing e-mail message received on Wednesday evening. I do not deny owning immoveable properties via personal investment companies (PIC). In an effort to alleviate any possible misunderstanding, I would appreciate it if you would substantiate your ascertains by sharing your research. As rightly pointed out by your good self, PICs can be used to address privacy concerns. As you will appreciate being a private citizen, I am reluctant to share my personal financial arrangements with the public at-large via a large media conglomerate.”
Syed Shehryar Ali, in his response to The News queries, said, “All information is declared in my aunts annual tax return. Given our family history and legacy, I find it insulting that you would even imply tax evasion or any such activity. Kindly do not email me again as I would consider that harassment.”
Tariq Sayeed Saigol, while responding to The News queries, said, “I refer to the questionnaire you have sent to me via email on the 28th September, 2021. While I firmly believe that the confidential information you seek should not be discussed with anybody other than concerned parties, however, in the interest of the public work you are doing and without prejudice to my legal rights, I would like to state the following:
“The transactions and assets referred to in your letter, barring certain errors, are acknowledged and have been appropriately disclosed with relevant authorities of Pakistan, including FBR in consultation with PWC, Pakistan (not India). The same do not involve any violations of laws and regulations for the time being in force in Pakistan. It would be appreciated that the above information has been shared without prejudice to our legal rights and in confidence. Given the sensitive nature of the information you have mentioned in your letter, it is earnestly hoped the same will be kept confidential and if unfairly disclosed into the public domain, I reserve my right to claim suitable damages from you. I shall be obliged if you acknowledge receipt of my communication,” he said.
The owner of ChenOne, while responding to The News, said, “Previously, all (4) were the shareholders of the CGI Limited. As a matter of fact, out of four, Muhammad Kashif Ashfaq was the shareholder from beginning. Whereas the other 3 shareholders, i.e. Muhammad Rizwan Latif, Umair Javaid & Abdullah Naeem had become shareholder of this company by virtue shares gifted to them by other family members. Subsequently, Muhammad Kashif Ashfaq, Umair Javaid and Abdullah Naeem have transferred their shares to Muhammad Rizwan Latif. At present, there is only one shareholder in this company, i.e. Muhammad Rizwan Latif.”
According to them, the purpose of establishment of this company was to explore the business opportunities in the Gulf market and other global markets during the quota regime period. Currently, the company has no warehouse; the warehouse under question had been sold out against the adjustment of some bank loans. That company deals in trading of different products like furniture, home furnishing, home accessories, leather products and garments. They said the company is declared with the tax authorities during the relevant tax years.
Former secretary Finance Salman Siddique’s son Yawar Salman in his reply said, “The entity Cres Tech Holdings was incorporated as part of a plan, as was then envisaged, to undertake foreign business. However, owing to certain circumstances neither any equity was contributed nor any bank account opened. There is no change in position as of today. This position could be confirmed by you directly also. Since no equity was ever contributed and entity worth remains Nil, the question of disclosing to tax authorities does not arise. Hope the above would enable you to conclude that no default exists in this case,” he said.
Below are the questions and answers of Muhammad Ali Tabba's family.
Q: According to records we have seen, you are shareholder of a company -- Lucky Rawji Holdings Limited -- registered in British Virgin Islands. Sohail Tabba is another Pakistani shareholder. Is that correct?
Answer: LCL Investment Holding Limited (A wholly owned subsidiary of Lucky Cement Limited) holds 50pc shares in Lucky Rawji Holding Limited (LRHL). Muhammad Ali Tabba and Muhammad Sohail Tabba are the directors of LRHL, not the shareholders.
Q: Described asset of the company is to hold 100pc shares of a cement company based in Congo which has an estimated value of $175m. Is that correct?
Answer: As mentioned above, LCL Investment Holding Limited holds 50pc shares in LRHL and LRHL invested USD 131.7 million in Nayumba Ya Akiba S.A., a cement manufacturing company in Democratic Republic of Congo, mainly financed through debt.
Q: Rossneath Investments Limited is a company having investment portfolio in Deutsche Bank and Credit Suisse AG branches in Singapore. Amina Abdul Aziz Bawany is the beneficial owner.
Answer: Rossneath Investments Limited is a company having investment portfolio in Credit Suisse AG branch in Singapore.
Yes, Amina Abdul Aziz Bawany is the beneficial owner of Rossneath Investments Limited.
Q: The company’s estimated value of the assets is $132,925,406 and the source of funds has been described “inheritance of shareholdings from the family business, Lucky Cement Limited.”
Answer: Based on 30th Jun 2021, Rossneath Investments Limited. estimated value of the assets is USD125,299,923 and the source of funds is Lucky Cement Limited shares.
Q: The British Virgin Islands is a tax and secrecy haven. Why did you opt to form companies there?
Answer: As discussed earlier, the source of income of Rossneath Investments Limited is the dividends from Lucky Cement Limited, which is subject to tax in Pakistan.
6- Have you and your siblings declared the foreign assets to tax authorities in Pakistan? If yes, please indicate since when?
Answer: Yes. Declared under amnesty scheme “Foreign Assets (Declaration and Repatriation) Act, 2018.
On the other hand, Makhdoom Khusro Bakhtiar in his response said, “My ancestors have been sizable agriculturists from the south of the province. The land holding number that is being quoted here is significantly under-reported and is from an unconfirmed source of media reporting. It is, however, correct that the primary source of income has been agriculture, which is adequately handsome and even now, my primary income source is agriculture income on which I duly pay the taxes as per the laws of Pakistan,” he said.
"It is pertinent to note that that my brother, Makhdum Omar Shehryar, is an independent person and has pursued his own professional career from the start. I categorically refute the assertion that I am his business partner. I, or my dependents, have never held any shareholding nor have been part of the management of RYK Sugar Mills. As mentioned above, my brother is pursuing his own separate career, which is independent of me. The questions by reference to stated facts per se relate to other independent family members. Nonetheless, I have confirmed from them that the referred assets, companies and transactions are duly declared with the tax authorities of Pakistan.
"I have always proactively recused myself from any decision making process and cabinet agenda items which deal with sugar or are sugar related. This conduct of mine is a matter of public record. Furthermore, on two occasions, to avoid any possible perceived conflict of interest situation, following measures were taken; My written request for relinquishing of charge as Federal Minister for National Food Security & Research as it deals with sugarcane crop and I was subsequently assigned EAD."
Former SAPM Dr Waqar Masood Khan, in his reply to the ICIJ, said, “I am not aware of Linkquest Ltd (BVI) and its business. I am also not aware whether it owns any assets. I was appointed as Special Assistant to Prime Minister (SAPM) on 5 October 2020 and I resigned on 23 August 2021, a period of less than 11 months. SAPM is a non-executive appointment. The designation of chief adviser on finance and revenue is not correct. It would be inappropriate that you link these questions related to Abdullah with me or my brief stint as SAPM. I may bring to your knowledge that Abdullah Masood Khan is not my dependent. He is a private citizen and lives an independent and modest life.”