Multi-Billion-Rupee Solar Panel Import Scam Involves Famous Pakistani Banks

The Senate Finance Subcommittee, chaired by Senator Mohsin Aziz, convened on Thursday to discuss the ongoing investigation into the solar panel import over-invoicing. The committee was apprised of significant revelations regarding the involvement of a dummy company in the import process, which led to the discovery of widespread financial irregularities.

Federal Board of Revenue (FBR) officials informed the subcommittee about a solar panel importing company that officially documented its owner as a salary-earning individual. A dummy company engaged in the import of solar panels valued at Rs 2.29 billion through deceptive practices, while falsely reporting solar panel sales exceeding Rs 2.58 billion.

Over-Invoicing and Suspicious Transactions

A comprehensive investigation revealed that Rs 106 billion in solar imports had been procured, with over Rs 69 billion in reported value discrepancies, which are referred to as “over-invoicing.” FBR officials identified 80 dubious firms that were involved in the solar import scandal. They discovered that 63 of these companies were involved in over-invoicing activities, which totalled Rs 69 billion. The companies in question were charged by law enforcement authorities in 13 First Information Reports.

The committee identified numerous firms that engage in over-invoicing activities, such as Bright Star, Moonlight, Asadullah Enterprises, and Smart Impex. While requesting specific documentation regarding money transfers and the operational business activities of participating companies, Senator Aziz requested detailed information from Bank Alfalah regarding these transactions.

FBR officials disclosed instances of identity card abuse, which demonstrated that specific individuals submitted fraudulent deposits under fake names. One person, for example, deposited Rs 14 million into a bank account but later denied the transaction, while another individual claimed to have never seen such a large amount. The authorities discovered evidence that Bright Star defrauded customers by fraudulently representing inflated solar panel import costs and reselling them at inflated lower prices through its activities as a fraudulent entity.

The investigation revealed that money for importing Chinese solar panels was unlawfully transferred to at least ten foreign nations, resulting in transactions exceeding Rs 18 billion. FBR officials have described this as a violation of financial regulations, with further scrutiny needed on these foreign transfers.

Suspicious Transactions in Banks

Many substantial transactions were executed by Bright Star and Moonlight, as confirmed by the representatives of Faisal Bank. Moonlight executed two cash transactions totalling Rs 49 million, while Bright Star executed four cash deposits totalling Rs 185 million. In response, Faisal Bank issued Suspicious Transaction Reports (STR) on these dealings.

The committee was informed with alarming news that Smart Impact, which was under investigation, had declared an official capitalisation value of only Rs 2,000. Even though its declared capitalisation was only Rs 2,000, the entity deposited Rs 1.54 billion in cash, despite the fact that its total deposits amounted to Rs 3.39 billion. The FBR authorities designated Habib Metropolitan Bank as the bank responsible for processing these monetary transactions.

Senator Aziz expressed his concerns regarding these alarming transaction figures and resolved to summon representatives of Habib Metropolitan Bank to the subsequent meeting to investigate their involvement in these transactions.

Senator Aziz also raised concerns regarding the State Bank’s failure to provide the necessary information on the solar import scandal. However, the Deputy Governor of the State Bank assured the committee that all relevant data would be compiled and presented in the next meeting.

As the investigation continues, the Senate subcommittee’s findings underscore the need for stronger financial oversight and stricter compliance protocols. Senator Aziz has vowed to pursue further inquiries into the extent of the scandal and ensure that those responsible for the fraudulent activities are held accountable. The inquiry into Habib Metropolitan Bank and other implicated parties is expected to provide further clarity on the scale of these alleged practices and the measures needed to prevent similar incidents in the future.