Official documents reveal: How more than a billion were made thru dummy company

ISLAMABAD: In its first order since inception, the Benami Adjudicating Authority has established Benami property, measuring 5,145 sq yards in Karachi, and ordered its provisional attachment with the alleged involvement of Omni Group.

Dummy companies were established in the name of directors of small employees of Omni Group and money was raised to acquire a plot in a posh area of Karachi at a price of Rs267 million.

After purchase, the property was first mortgaged with M/s Sindh Bank to acquire bank credit facility/bank guarantee of Rs267 million and then the mortgage was transferred to M/s First Woman Bank for a bank loan facility/bank guarantee of Rs734 million.

In total, up to Rs1.001 billion was acquired as bank loan in favour of Crescent Construction Company (Proprietor: Farooq Azam) against the property in question.

Official documents, including the Benami Adjudicating Authority’s order and other facts of filed reference as well as background interviews, disclosed that a director of the company is Muhammad Yaseen is a plumber earning Rs30,000 or 40,000 per month, admittedly working with Omni Group. Muhammad Shabbir is a petty salaried individual working with Omni Group but in addition to this company, he also appears as director in the following 02 companies and 01 other business concerns of Omni Group.

The FBR’s Benami Zone III Karachi filed Reference C. No. Reference/ MarshalHomes/ 2019-20/01 dated 15th October, 2019 under Section 22(5) of the Benami Transactions (Prohibition) Act, 2017, concluding that M/S Marshall Homes Builders & Developers Pvt.) Ltd, through its directors has acquired and holds commercial Plot No# 216-E I Lines, Dr. Dawood Pauta Road, Saddar Karachi, measuring 5145 Sq yards as Benami property.

The Benami reference was filed against Marshall Homes Builders & Developers Pvt.), director Abid, Yaseen, Shabbir, all nominated as Benamidars and Muhammad Younus Kodwai, Abdul Ghani Majeed, Farooq Azam and others of Omni Group.

According to the details of filed reference, the Marshall Homes Builders and Developers Pvt. Ltd was incorporated on 17-10-2014 with the Authorized Share Capital of Rs1 million (Rupees One Million) divided in 10,000 (Ten Thousand) shares of Rs100, with the stated intent of carrying on business as builders, developers, contractors for all types of civil, electrical and mechanical works for any individual, AOP, company, institution Government and semi government department.

Shabbir and Abidullah were the initial directors of the company with paid up capital of Rs4,000 only, holding 20 shares and subsequently on 31-10-2015 Shabbir was relieved as director and replaced with Yasin.

On 15 December 2014, the company acquired the property situated at E.I lines Dr Dawood Pota Road, Saddar, Karachi cantonment, Karachi measuring 0.96 acres or about 4646.4 sq.yds. (As per site plan about 5145 sq.yds) for a total consideration of Rs246.9 million. Bulk of the agreed consideration was made by various (07) dummy concerns related to Omni Group of Companies and routed through Summit Bank Limited.

After purchase, the property was first mortgaged with M/s Sindh Bank to acquire bank credit facility/bank guarantee of Rs267 million and then the mortgage was transferred to M/s First Woman Bank for a bank credit facility/ bank guarantee Rs734 Million was acquired from it.

The audited accounts of the company’s Assets & Liabilities do not reflect the purchase of property nor the loan acquired. As against the meager paid up capital and huge liabilities incurred the audited accounts of M/s Marshal Homes Builders & Developers submitted to FBR for Financial Year 2017 & 2018 reflect assets and liabilities as in 2017, its assets were standing Rs312,027 while liability stood at Rs719,658 while in 2018 its assets went up to Rs59,684,166 and liability remained at Rs964,658.

A major chunk of payments made for purchase of property is linked Abdul Ghani Majeed’s bank accounts of his dummy concerns i.e. M/s Logistics Trading, Royal International and Umair Associates; which have been owned/ declared by him in his declaration filed on 31-07-2018 under Amnesty scheme.

Abidullah in his statement confirmed that he was merely carrying out instructions of Younus Kodwai. Therefore, it is apparent that the bank accounts held in the name of Marshal Homes Builders & Developers and Manpower.com (another account maintained in name of Abidullah) were actually owned by Yonus Kodwai.

Abidullah, who has been shown as the CEO of the company, has also been an employee of Parthenon (Private) Limited since 2010, which is owned and run by Younus Kodwai.

He used to work as a computer operator with a salary of Rs25,000. Abidullah also explained that he was made director in the company by Younus Kodwai and he signed all the documents and cheque books as instructed to him by Younus Kodwai. His declarations filed with the FBR do not reflect any financial worth to support the notion that he could be conducting these huge transactions.

Shabbir was in NAB’s custody at the time of investigation; therefore, no information could be gathered by Benami Zone, but his brother Yaseen has testified regarding his brother’s involvement in this matter.

Similarly declarations filed with the FBR do not reflect any financial worth to support the notion that he could be conducting these huge transactions.

Yaseen has testified that his brother Shabbir had introduced him to Younus Kodwai because his brother was already associated with him. He completely disowned any stake in Marshal Homes Builders & Developers Pvt Ltd, as being a plumber he earns Rs30,000 or RS40,000.

He confirmed some plumbing works done for Younus Kodwai and Omni Group concerns. He confessed having signed cheques and stamp papers at Faisal Bank. His declarations filed with the FBR do not reflect any financial worth to support the notion that he could be conducting these huge transactions.

Thus the investigation reveals that through unverifiable paper transactions the ownership of this costly property has been handed over to a dummy corporate entity i.e. M/S Marshall Homes Builders & Developers Pvt Ltd; whose current directors deny ownership of benami company/property. Even otherwise, the given management of company lacks creditworthiness and required expertise & exposure.

Beneficial owners: As per statement of Farooq Azam, Proprietor Crescent Construction all dealings with between Marshal Homes and Crescent Construction were managed and steered by Muhammad Younus Kodwai who was to derive the future benefit from the profits of the projects of Crescent Construction Company. Similarly, Abidullah in his statement confirmed that he was merely carrying out instructions of Younus Kodwai; therefore, the bank accounts held in the name of Marshal Homes Builders & Developers and Manpower.com though maintained in the name of Abidullah were actually owned by Yonus Kodwai, therefore he appears to be the beneficial owner.

Abdul Ghani Majeed whose bank accounts have been used for payment of consideration is the other beneficial owner. Farooq Azam who joining hands with the said benami concern has acquired huge bank guarantee/credit facility against the aforesaid Benami property is yet another beneficiary.

In view of above, Benami Zone Karachi alleges the aforesaid property acquired by a dummy/ benamidar management fully qualifies the criterion of a Benami property under sections 2(1)(8)(A) (a) (b) and 2 (1) (8) (C) of Benami Transactions (Prohibition) Act, 2017

Subsequent to preliminary examination of the Reference, Notice under Section 24 (1) of the ibid Act was issued to the nominated Benamidars and Beneficial Owners to furnish evidence in their defense and appear for hearing before Benami Adjudicating Authority, Bench-III Karachi.

After providing opportunity of hearing, the Benami Adjudicating Authority issued its orders by stating that in view of above, subsequent to detailed examination of the statements contained in the Reference, consideration of incomplete and unsatisfactory reply to the Notice under Section 24 (1), analysis of evidence on record perusal of legal provisions and relevant dictums of the higher judiciary, it is hereby held without any shadow of doubt, under Section 24 (3) (ii) of the Benami Transactions (Prohibition) Act, 2017 that the commercial plot E.I Lines Dr. Dawood Pota Road, Saddar, Karachi Cantonment, measuring 0.96 acres or about 4646. 4 sq. yds. (As per site plan about 5145 sq.yds), the subject matter in instant reference had been acquired and held/being held Benami as defined under section 2(8) (A) (a) (b) & (C) read with section 3 (2) of the Act and Order for Continuing of Provisional Attachment under section 22(4)(a)(i) dated 12th September, 2019 passed & issued by the Initiating Officers is hereby, confirmed.

It further stated in its order that the plot is subject to further action under Sections 4 read with section 25 (1) of the Benami Transactions (Prohibition) Act, 2017.