CREEK MARINA KARACHI OFFICIALS LAUNDERED BILLIONS THROUGH ILLEGAL BANK ACCOUNTS – FIA REGISTERS FIA – INITIATE FURTHER INVESTIGATION

In light of the investigation by the Joint Inquiry Team constituted by the DG FIE on 25th June 2023, the Crime Banking Circle of FIA has investigated Pakistan Defense Housing Authority (DHA) Karachi and Manhattan Singapore Pte Ltd (MSP). (l) In the case of booking and construction of the Creek Marina project, irregularities in the collection of billions of rupees from the public, evidence of violation of the rules of the State Bank and the Board of Investment have been found.Several companies were established for money laundering from the project.

Consequent upon the report of JIT constituted in vide DG office Order No 184/2023 dated 25.07.2023 and the Director FIA Islamabad Office Order No 184/2023 dated 25.07.2023, it transpired that on 27th September 2004, Pakistan Defence Housing Authority (DHA) Karachi and Meinhardt Singapore Pte Ltd [hereinafter referred to as MSPL] entered into an agreement for the construction of Creek Marina project located at DHA Phase VIII Karachi it was agreed between both parties to open and maintain an Escrow Account for the purposes of the payments received for the buyers and for the payment of expenses and project costs related to the project Creek Marina.

The Escrow Account was to be audited and agented by an independent Auditor, and its cash flows were to be quarterly reported to the DHA by the MSPL. However, no Escrow account was opened till 10th July 2020 after a settlement agreement between DHA, MSPL. And CMPL dated 18th June 2019. On 5th May 2005, an addendum was made to the said agreement, Creek Marina Pvt. Ltd [hereinafter referred to as CMPL] was added as the sub-lessee third party was executing the project in Pakistan. The CMPL is the subsidiary of another foreign special-purpose vehicle company namely Creek Marina Singapore Pte Ltd [hereinafter referred to as CMSPL] – an investment holding company for CMPL – registered in Singapore entirely owned by another offshore company namely Swiftearn Holding Limited in the British Virgin Island.

In violation of the aforesaid agreement, the CMPL fraudulently opened two bank accounts i.e., A/c account number 001-028463-001 Titled: Creek Marina Pvt. Ltd. In HSBC Bank Karachi on 20-04-2005 [authorized signatory Nasim Shahzad & others], and A/c 0007-70002286-03 Titled: Creek Marina Pvt. Ltd. In HBL Commercial Banking Branch in 15-05-2007 [authorized signatory Nasim Shahzad & others]. During the operations of these accounts, approximately Rs12.1 billion and Rs17.1 billion were credited into these accounts, respectively. It is pertinent to note that these two accounts were Current Accounts, not Escrow Accounts.

The funds fraudulently accrued in these accounts from the buyers [general public] and investors were subsequently siphoned off mainly through cash withdrawals and foreign telegraphic transfers [FTTS]. Rather than using these funds for the construction of the project. The management of CMPL fraudulently invested the same in another (new) CMPL’s HBL Investment Plus Account No. 0007-79005746-80 Titled: Creek Marina Pvt. Ltd., in HBL Commercial Banking Branch, Karachi. During that period, the Creek Marina construction project remained halted, and no substantial construction work was being carried out by CMPL.

Again, in April 2011 the management of Creek Marina fraudulently opened another account No. 001-170315-020 Titled: Creek Marina Singapore Pte Ltd- an Investment Holding Foreign Company – at HSBC Pakistan Main Branch Shaheen Complex Karachi, which was later transferred to the Meezan Bank in 2014 after HSBC’s merger with the Meezan Bank as having new A/c No. 9902-01014732-33. The account remained non-operational and dormant till 16th June 2016 when Faisal Jamil Khan, the then-Operational Manager, and Syed Ali Murad Naqvi, Branch Manager of Meezan Bank Shaheen Complex Kiyani Road Karachi reactivated the bank account on the reactivation request of Nasim Shahzad (as its authorized signatory).

The account was fraudulently re-activated in violation of the State Bank of Pakistan (SBP)’s regulation viz. AML/CFT regulations, CDD, EDD, etc., and without obtaining the mandatory documents required for a Foreign Investment Holding Company in Pakistan i.e., Board of Investment (BOI) Government of Pakistan’s approval. During the operation of this account, the funds [Total Credit Turnover: Rs 4.3 Billion] accrued in this account from the buyers [general public] and investors were subsequently siphoned off mainly through cash withdrawals and third-party payments.

Again, the management of CMPL/MSPL fraudulently opened another bank account bearing A/c No. 2010568668 Titled: Creek Marina Singapore Pte Ltd. (CMSPL) in Silk Bank Main Branch Karachi on 30th December 2021 [account authorized signatories: Nasim Shahzad, Muhammad Omar Shahzad, Nudrat Mand Khan & Muhammad Abdur Raheem] with active connivance of Silk Bank officials.

This account was opened in Silk Bank without obtaining mandatory documentation viz. Company’s Board resolution, Article of Association, Company Registration Certificate, Foam A and Form 29, Certificate of Incorporation, SECP-approved documents, verified signatures on the AOF by an Embassy official for the signatories residing abroad, and approval from the Board of Investment of Pakistan (BOI).

Moreover, no Biometric verification of the authorized signatories of the account holders was conducted. Shehryar Khalid-GM and Faisal Hameed ROSM of Silk Bank Karachi, with criminal intention and connivance, got these accounts opened by securing deferral (for submitting required documents) on this account from the Silk Bank Management. The account Service Department proceeded to open the account while adhering to instructions regarding its status as ‘Post No Debit’ (PND).

Later, Faisal Hameed merely obtained a scanned copy of the Account Opening Form with incomplete documentation. Despite PND, the account remained operational with a total credit turnover of Rs 182 Million and a total Debit turnover of Rs158 Million. During the inquiry, the management of CMPL admitted the majority of its debtors are employees of the company but failed to provide any plausible answer/justification for funds so siphoned off from this account.

Furthermore, the Borad of Investment vide its letter, No. 1 (9)/2023-FTP-(MISC) date 09-08-2023, has categorically stated that it is mandatory for a foreign company to get prior permission from BOI to operate a branch/liaison office in Pakistan. M/S Creek Marina Singapore Pte. Ltd (CMSPL) is not registered as a branch/liaison office with BOI as per available records.