KARACHI: Directorate of Post Clearance Audit (South), Karachi has unearthed a complex web of deceit and fiscal fraud involving fictitious solar panel companies, which reportedly transferred Rs 73 billion out of Pakistan.
According to details, the Directorate during the sectoral audit of solar panel imports assigned by the Federal Board of Revenue (FBR), identified significant irregularities and violations in the operations of various importers.
As a result, two FIRs have been lodged against two companies. The charges included over-invoicing, obstruction to audit, and using illicit funds to finance imports, ultimately leading to trade-based money laundering (TBML).
The investigation has exposed the modus operandi of these companies, including the suspicious closure of their registered premises.
Further investigation revealed mutual fund transfers between these two companies, suggesting a strong association between them and both were located in Peshawar.
Alarming evidence has emerged, indicating that these associated importers transferred a staggering total of Rs 73 billion out of Pakistan in connection with solar panel imports.
The investigation found that in 2,718 import Goods Declarations (GDs), the combined over-invoicing amounted to a staggering Rs 38 billion. The declared import values were exceptionally high, ranging between USD 0.35 to 0.70 per watt, a significant deviation from the bonafide prices of solar panels, which should range between USD 0.17 to 0.22 per watt, as confirmed by the Pakistan Solar Association.
Moreover, income tax records provided compelling evidence that these companies operated as fictitious entities, utilising illicit funds far exceeding their legitimate financial worth.
Similarly, the sales tax declarations corroborated the over-invoicing scheme, as solar panels originally imported at Rs 73 billion were subsequently sold in the local market for only Rs 46 billion, highlighting the stark contrast between import and local sale values.
In response to these findings, DG PCA Chaudary Zulfiqar Ali assigned the PCA South to accelerate the investigation. Director PCA South, Sheeraz Ahmed, and his team played a pivotal role in uncovering these severe violations in the solar panels sector.
Meanwhile, sources in PCA said authorities are actively pursuing further investigations to bring the culprits to justice and hold them accountable for their actions.
This expose of a massive illicit scheme involving substantial fund transfers and fiscal fraud underscores the critical need for rigorous monitoring and enforcement measures in the business and import sectors.
The investigation against these companies is a stark reminder of the importance of stricter regulations to prevent such incidents and safeguard the integrity of Pakistan’s financial system.
Copyright Business Recorder, 2023