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September 17, 2019

Who is ‘Politician-4’?


September 17, 2019

ISLAMABAD: In their recent updated criminal indictment in Abraaj case, the US prosecutors talked of four Pakistani politicians without identifying them -- whom the senior most executive of the company allegedly bribed or tried to bribe —.

The Wall Street Journal has already named three of the four politicians in an earlier article, leaving many guessing who is “Politician-4”. The US prosecutors allege that between 2013 and 2016, the senior most executive bribed the “Politician-4”who is said to be one of the top-most and famous officials in the present government. The 77-page indictment document on page 25 alleges that between at least 2013 and 2016, the defendant, at time assisted by Mr Lakhani and Mr Siddique, the defendants, used company’s funds to pay bribes to another Pakistani elected official (Politician-4) and to cover certain dining and travel expenses of “Politician-4.”

More: Abraaj fined $315mln by Dubai watchdog

The indictment on page 23 discussed how allegedly at the direction of the senior most executive, members of the company also bribed Pakistani elected officials for the benefit of the enterprise. In para 54 of the indictment, the US prosecutor alleged, “For example, in June 2016, the defendant authorised the payment of $20 million (Rs3.12 billion) to a particular official in Pakistan (Politician-1) with connections to two senior elected officials (Politician-2 and Politician-3) purportedly to engage Politician-1 as “a transaction adviser” and to “specifically focus on the approvals, consents and various agreements that will be required from the Government of Pakistan and its related entities” for a transaction involving Abraaj, KES Power Limited, or K-Electric Limited. The KES Power Limited is a holding company for K-Electric Limited, an electrical energy utility in Pakistan, in which various Abraaj-branded entities invested approximately $300 million [Rs46.83 billion]”.

The indictment added that in his email personally approving the agreement and payment, the senior most executive directed a senior member of the company (“Executive”) to amend the agreement.

It added, “In truth and in fact, the agreement was nothing more than a conduit through which Politician-1 could use the company’s cash to influence Politician-2 and Politician-3 in connection with Abraaj’s plans to sell its stake in Karachi Electric over which the government of Pakistan had leverage.” It added, “Indeed, prior to signing the agreement, Politician-1 reported to Executive-1 that Politician-1 would get the “blessings” of Politician-2 and Politician-3 as well as their instructions as to how this money should be distributed.”

As a further example, the indictment said, between at least 2013 and 2016, the defendant, at times was assisted by Mr Lakhani and Mr Siddique. The defendants used company’s funds to pay bribes to another Pakistan election official (Politician-4) to cover certain dining and travel expenses of Politician-4. Though the indictment does not name any of these four politicians, the Wall Street Journal had claimed in its October 2018 article that the senior most executive of the Dubai-based group allegedly paid $20 million (Rs3.12 billion) to businessman Malik for his assistance in securing cooperation for K-Electric sale. The article alleged that Malik was tasked with securing cooperation from the then senior most elected government officials to help the senior most executive sell company’s stake in K-Electric. The senior most executive, however, had denied WSJ allegations.

The said WSJ story named three top politicians – two of them public office holders -- who are believed to be referred in the updated indictment document as “Politician-1”, “Politician-2” and “Politician-3” respectively, leaving a big question mark about the identity of “Politician-4” for whom, according to the indictment, the company’s funds were used to bribe and cover his dining and travel expenses. It is yet to be seen whether the US prosecutors will formally name them, particularly the “Politician-4” whose identity has not yet been even disclosed by the WSJ.

A few months ago, the WSJ had reported that the US prosecutors accused the Group’s senior most executive of misappropriating more than $250 million (Rs39 billion) in a widening investigation into the world’s biggest failed private-equity firm. The accusation was made in the updated criminal indictment published early this month. The WSJ article added that UK police arrested this senior most executive at London’s Heathrow Airport on April 10, after US prosecutors accused him of fraud in a shorter indictment. Three more executives of the equity group were named in the new indictment, adding to three already accused, including the senior most executive.

However, the senior most executive of Abraaj Group is on bail these days and is contesting his case of alleged financial misappropriation in a court of law. He had denied the allegations saying that it is a botched case based on misunderstanding. He said that he would be exonerated soon.

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