PanamaLeaks a closed chapter for state entities

ISLAMABAD: Panama Papers issue, which has jolted different world capitals including Islamabad, has become a “closed chapter” for all relevant Pakistani authorities including NAB, FIA, State Bank of Pakistan, FBR and SECP.

Background interactions of The News with senior officials in these institutions show that almost all these state entities are too weak or politicized to independently inquire the matter on its merits and without any fear and favour. 

In the present situation, all is well for those named in the Panama Papers as the relevant authorities are using excuses and giving reasons to shift the responsibility on others. 

Securities and Exchange Commission of Pakistan (SECP) is the only organization, which has done some serious probe. Otherwise, there is a clear reluctance on part of all relevant government institutions to inquire into the matter.

Interestingly, the two top most anti-corruption state institutions -- NAB and FIA -- have not even bothered to initiate any inquiry into this scam which involves the names of many influential persons including the members of Prime Minister Nawaz Sharif family.

FIA sources say that without the government’s direction initiating inquiry into this matter by the Agency would mean inviting trouble for the concerned officers. “We can’t proceed into such matters without government’s orders,” a senior FIA source said, adding that the Agency is not independent enough to proceed on such matters involving high profile personalities.

National Accountability Bureau (NAB) has also been unmoved. According to a senior NAB official, innumerable complaints concerning PanamaLeaks have been received by the Bureau but no inquiry has been ordered as yet. The NAB has been under pressure from different quarters to take up the matter and initiate a thorough probe but it has not been done.

During the recent weeks, senior management of NAB has been repeatedly approached by this correspondent on the issue of Panama Papers and it is found that the Bureau is not interested in moving on the issue on its own. The NAB wants the issue to be investigated by a judicial commission.

State Bank of Pakistan has also failed to inquire those named in the Panama Papers. When approached, SBP spokesman said that by virtue of its statutory powers the SBP is not an investigating agency for matters such as PanamaLeaks until or unless such powers are delegated by the government of Pakistan.

The SBP spokesman, however, said that the Bank will extend its full cooperation to any inquiry commission if formed  by the government of Pakistan or its designated body to probe the PanamaLeaks.

Federal Board of Revenue sources claim that Pakistani tax laws don’t allow the authorities to proceed against most, if not all, of those named in Panama Papers.

As reported by The News last week, the FBR sources said that the limitation clauses of the income tax laws bar the tax man from going beyond last five years. “We have not yet found any actionable case among those named in Panama Papers,” a source said, adding that the law does not permit tax man to open cases beyond the limit set in the law.

Tax declarations of income tax filers are time barred and could not be opened beyond last five years, it is said and added that the law also restricts the tax man from probing the investment, wealth or income of a non-filer beyond ten years. Earlier for even non-filers, the time barred period was five years.

The FBR sources said that so far all those offshore companies looked into are found time barred and thus are not actionable under the law. Securities and Exchange Commission of Pakistan (SECP) probe into Panama Papers disclosures reveals that no direct investment had been made in the off-shore companies by any company registered in Pakistan.

The SECP is the only exception for having done a serious probe. Top SECP officials recently confirmed to The News that the available record reflects that prima facie, the investments as mentioned in the Panama Papers were made by the persons in their individual capacity and same has not been routed through the company’s accounts.

In its probe, the SECP found that names of a total of 444 Pakistanis had appeared either on ICIJ website or given in The News. These persons are officers or owners of 280 offshore companies mentioned in Panama papers.

Out of the referred 444 persons, 155 individuals were found to be directors on Companies in Pakistan. It is found by the SECP that these 155 persons are directors in 600 companies registered in Pakistan. The breakup of these companies include 36 Public Listed Companies; 90 Public Unlisted Companies/Not-for-profit companies (registered under section 42&43 of the Companies Ordinance, 1984); and 474 Private Companies.

It was found by the SECP that no direct investment in the off-shore companies has been made by any company registered in Pakistan. The SECP has also sought changes in law to curb the investments in off-shore companies for tax evasions, money laundering, and hiding of assets in future.