LAHORE: The Federal Investigation Agency (FIA) on Sunday registered two separate FIRs against industrialist and former close aide to the prime minister Jahangir Khan Tareen and PML-N President Shehbaz Sharif on multiple charges including money laundering in the sugar crisis probe.
As per the FIR registered against Tareen and his son Ali, the FIA says that during the course of inquiry it was noted that an amount of at least Rs1.2 billion was 'overpaid' (transferred) by Jahangir Khan Tareen from the accounts of a listed public company (JDW Sugar Mills Ltd.) to a company (JK Farming Systems Ltd. hereinafter JKFSL) owned by his children while purchasing the assets of the latter at an exorbitant non-arms length purchase price of Rs4.35 billion on 20th November 2013.
The FIR, a copy of which is available with Business Recorder, further says that it has transpired during the present inquiry that the JDW Sugar Mills Ltd recorded a false disclosure in its annual audited financial statement of 2014 which states that the company acquired Corporate Sugarcane Farms business of JK Farming Systems Limited ('a related party') on 20 November 2013. The assets and liabilities have been transferred to the company (JDW) at fair values to comply with the requirements of Business Combinations (IFRS-3).
In fact, no 'fair-value' assessment by any independent evaluator or auditor was either made or available on the date of purchase of JK Farming Systems Ltd, i.e., 20 November 2013. A.F. Ferguson S Co. (Asad Aleem Mirza Chartered Accountant) submitted its evaluation report titled 'Report on Agreed-Upon Procedures in respect of Valuation of Net Assets of Sugar Cane Operations of JKFSL' on 29 January 2014, post-facto. Hence, the statutory requirement of determining 'fair value' mandated by the International Financial Reporting Standards (IFRS-3) read with section 3-(i) and Para 13 of 4th Schedule to Companies Ordinance, 1984 was flouted and a false declaration (mentioned above) was made by JDW Sugar Mills Ltd.
M/S Unicorn International Surveyors CEO Amjad Javed Wadera candidly admitted during the enquiry that he never evaluated the value or quantum of lands, fixed assets, stores/ spares of JKFSI for which he was engaged. Rather he relied on the figures of values/quantities provided to him by the management of JKFSL which he reproduced as it is in his evaluation report.
He disclosed that even the evaluation of 532 acres lands owned by JKFSL assessed by him at Rs666 million was prepared by one of his 'low-profile' ex-employee Rana Zubair at the behest of JKFSL. Hence, the total evaluation of the assets assessed by M/S Unicorn International Surveyors at Rs1.5 billion is bogus, the FIR says.
"The highest component of this fraudulent purchase is the value of biological assets assumed at Rs2.94 billion. Neither A.F Ferguson & Co nor M/S Unicorn International Surveyors ever surveyed or evaluated this biological asset. However, A.F Ferguson inserted a value of Rs2.94 billion (biological asset) in its post-facto evaluation report dated 29 January 2014 at the behest of the management of JKFSL," the report adds.
It further says that this clearly shows that not only no due-diligence was done; rather a fraudulent evaluation report amounting to Rs4.35 billion was prepared by A.F Ferguson & Co in connivance with the management of JKFSL to ostensibly legitimise a fraudulent non-arms length transaction. "The connivance of the auditor is also substantiated from the fact that he was engaged for evaluation of JKFSL assets by the JDW Sugar Mills Secretary, Muhammad Rafiq."
According to the FIR, Jahangir Khan Tareen, who also had fiduciary control over the shares of JDW Sugar Mills, fraudulently transferred Rs4.35 billion to a private company, JKFSL, controlled by his son Ali Khan Tareen, thereby cheating the public-shareholder of JDW. Therefore, Tareen found involved in criminal breach of trust (406 PPC) and cheating (420 PPC) with respect to the aforementioned transfer of funds to JKFSL.
As per the FIR registered against PML-N President Shehbaz Sharif and his sons Hamza and Suleman, the FIA has accused the Sharif family of laundering money of Rs25 billion from 2008-2018 through the bank accounts of their 'low-paid' staff.
After identifying at least 20 'low-paid' employees of the Ramzan Sugar Mills and Al-Arabia Sugar Mills, the FIR mentioned names and bank account details of such persons who were also allegedly running front companies of the Sharif family.
According to the FIR, the low-wage employees admitted during the inquiry that these accounts were opened and operated for personal transactions of Suleman Shahbaz on the instructions of Muhammad Usman, CFO of the Sharif Group.
"Vouchers, cheques and money-trail of deposits into these accounts have revealed that money was being deposited by various people including politicians of various political affiliations, contractors, petroleum-dealers, pharmaceutical vendors, flour and rice mills owners and various traders/ merchants not related to sugar-business.
One of the politicians has disclosed that he gave the cheques amounting to Rs14 million personally to Shehbaz Sharif in lieu of party ticket but does not know how those cheques got deposited into the account of Gulzar Ahmed Khan - a deceased peon of RSML," the FIR reads. However, the politician refused to give anything in writing citing expected death threats to him and his family, it adds.
Copyright Business Recorder, 2020