LAHORE: The chief executive of ZARCO money exchange company, Syed Lakht-e-Hasnain, illegally transferred around Rs 1,870 million to his bank accounts abroad, while his company performed Foreign Telegraphic Transfers (FTTs) of $346.71 million under the hawala business in 2008, according to the Federal Investigation Agency (FIA).
This was revealed in a report prepared by the FIA Punjab, which is working on a campaign against hawala business undocumented/informal fund transfers, and investigating the flight of capital from the country.
The campaign was initiated on the directions of the State Bank of Pakistan (SBP) governor and Interior Minister and Narcotics Control Division head Rehman Malik. The investigation is led by FIA Punjab Director Muhammad Azam Joiya, who has already submitted the report to FIA Director General Tariq Khosa.
The report said foreign exchange companies were involved in the hawala business, which resulted in the loss of capital and depletion of foreign exchange reserves.
The FIA Punjab began the investigation with a two-fold strategy, firstly, by checking international flights to prevent physical transfer of forex and secondly, by launching a crackdown on foreign exchange companies involved in hawala.
During the operation, FIA Punjab booked six foreign exchange companies and their owners. Amongst these is ZARCO (ZECPL), with 727 branches/franchisees operating across the country.
Each foreign exchange company is bound to operate under the Foreign Exchange Regulation Act 1947, and the rules and regulations set by the SBP.
Instead, ZECPL operated in violation of the rules, ignoring all business ethics as well, the report said.
Between January and November 2008, the company executed FTTs worth $303.58 million through hawala.
Outward remittances: The company also concealed outward remittances worth $43.13 million between July and December 2008 and did not report to the SBP.
In the seized computer servers of ZECPL, the FIA recovered scanned images of 125 national identity cards (NICs), wich were used for outward hawala and the flight of capital.
In fact, the cardholders had provided copies of their NICs for receipt of inward remittances through the Western Union, but the company used the information to conceal data of hawala users sending money abroad.
Subsequently, the possibility of money laundering could not be ruled out, the report said.
Records also revealed that Lakht-e-Hasnain transferred Rs 380 million between November 2006 and May 2009 to his accounts abroad.
The report said Hasnain took abroad Rs 80 million in cash on Febraury 24, 2009.
The report also said an amount of Rs 1,300 million was sent to Dubai through Hawala between January and July 2009.
The SBP says ZECPL owes $6 million to the Western Union and Rs 90.048 million to its local business associates.
Reportedly, HM Revenue & Customs authority of the United Kingdom is also conducting an inquiry into ZARCO’s operations in the UK.
Also, UK’s Serious Organised Crime Agency (SOCA) initiated an investigation against Hasnain in August 2008 under suspicions of money laundering and seized the company’s accounts in January 2009.
On the basis of above mentioned evidence, the report said it was clear that ZARCO and its owner were involved in hawala, loss and flight of capital from the country, fraud, forgery and criminal breach of trust.
Source: Daily Times