Says offshore company meant to buy London property; three shares each were held by three companies
ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) chief Imran Khan told the Supreme Court (SC) on Tuesday that though an offshore company was created for him to purchase a flat in London in 1983, he never owned that offshore company. Imran has mentioned that Niazi Services Limited, the offshore company, had nine shares each of GBP 1 and none of the shares were ever registered in his name.
In his reply to the apex court in the case against him for not declaring his offshore company through which he had purchased his London flat, Imran has tried to explain that offshore company is an arrangement for management of property and assets while the beneficial owner is mostly a different person. He, however, has mentioned that though he was not the owner of the offshore company yet he was the beneficial owner of the property held by the said offshore company from the day one.
In his reply to a petition filed by Hanif Abbasi of Pakistan Muslim League Nawaz (PML-N), Imran mentioned that “apart from the admitted fact that the answering respondent (Imran Khan) was never the registered owner of the 9 shares of Niazi Services Limited, the said value of GBP 9 was charged back by the companies and professionals administering NSL at the outset. Since the GBP 9 being the total value of the issued share capital of NSL were expensed out or set off, the GBP 9 could not be described as an asset or property of the answering respondent for which he could not even remotely be held accountable under any applicable legal provision.”
He termed Abbassi’s petition as a counter blast to his petition against Prime Minister Nawaz Sharif. He said the petition is not bona fide as he had defeated the petitioner in elections held in 2013 for the constituency NA 56. He said that at that time the petitioner did not content his eligibility and qualification.
“The petition has clearly been filed as a counter blast to constitution petition filed against the Prime Minister, his family and others and to settle a personal grudge”, Imran said. He contended that Abbassi is an accused in what has become known as the Ephedrine Scandal and his role in the construction of the Metro Bus Service between Islamabad and Rawalpindi is yet to be investigated by NAB.
He rejected the allegations of tax evasion and money laundering leveled against him. He prayed the apex court to dismiss the instant petition and the petitioner should be fined. Imran stated that he had bought the London flat for a sum of £117000. He said that he had formed the Niazi Company Ltd with £9 and its only asset was the London flat.
He said that in 2002 he purchased the Bani Gala land for a sum of Rs43,500,000/ on installments. He added that he paid Rs6,500,000 as down payment through his own money with the intention that pay the rest of amount from the sale of London apartment.
He said that since the London flat was taking time to sell, his first wife Jemima Khan made the down payment. Therefore, it was decided that money from the London flat will be transferred to Jemima.
He said that London flat was sold for £715,000 which after paying taxes was reduced to £690,000. Imran said there was no income or other tax incidence on such acquisition or transfers therefore, no question of tax evasion or any loss to the public exchequer even arise.
Referring to the allegations regarding concealed investments made in real estate in Islamabad, Imran said that the investment in the Islamabad property was duly and fully disclosed to the FBR by him in his wealth statement for the same tax year 2014 and updated figures were duly disclosed in subsequent tax year 2014.
He said that it was also disclosed to the Election Commission of Pakistan in his statement of assets for the period ending on 30-6-2016. The PTI chief said that he never acquired funds from prohibited sources for political activities of his party. Similarly, he contended that he has not evaded any taxes. He said he brought money here through amnesty scheme.
“The only asset under NSL being the London Apartment was sold in April 2003. The total issued share capital of NSL was GBP 9 which was not held in the name of the answering respondent. Once the only asset was sold, the NSL existed on papers only, without any asset. Since the answering respondent was not the registered shareholders of the 9 shares (of GBP 1 each) of NSL, there was no mandatory, substantive or binding obligation to even make a disclosure.”
Regarding formation of the offshore company, the SC has been told by Imran Khan that “since purchase of property in the UK is undertaken through solicitors, the answering respondent was advised that the London apartment be placed in the name of a juridical entity with the answering respondent remaining its sole beneficial owner, having paid the entire sale price. consequently, NSL was incorporated with a total subscribed capital of GBP 9 and its only asset was the London apartment, whose absolute owner was the answering respondent. Three shares each were held by three other companies who submitted the requisite returns.”
Azhar Siddique Advocate when contacted by The News explained that in the cases of offshore companies, there is a corporate veil which needs to be lifted as mostly the beneficial owners are not known. In the case of Imran Khan, the lawyer said, he had declared himself a beneficial owner which settles make questions. “In wake of Panama leaks, the issue of offshore companies has come to the limelight but in many cases, the beneficial owners have admitted being owners of properties held by the offshore companies but have denied owning those companies”, said the lawyer adding: “This has happened in India too and now Imran Khan has said the same thing, he admits owning the property but not the company, which will not create any problems for the politician.”
