RICHEST INDIVIDUALS OF PAKISTAN

While the two ministers failed to come out with details of any case of tax evasion registered by CBR against the former prime minister and his family they argued that members of Sharif family were presumed tax evaders because they pay only a negligible amount as income tax disproportionate to their lifestyle.

Nawaz Sharif paid Rs 3000 only as income tax in 1993 but this does not make him a tax evader because there are scores of other rich people, Ahmad Dawood, Nasim Saigol, Rafiq Habib, Mian Mohammad Mansha, Adamjee and Bawanys who have legendary wealth but do not income tax proportionate to their presumed income and lifestyle. Yet no case has ever been registered against them, evidently because like Nawaz Sharif, they too are making use of the exemptions, allowances and loopholes in the prevailing tax system.

Any income tax consultant would have told the two ministers that under the existing tax laws, the amount of wealth tax paid is allowed as deduction from the total income of the assessing year, and this total income is reduced to the extent of wealth tax paid. This is what Nawaz Sharif and his family members were doing. At the best Sharif and his likes were avoiding tax and not evading tax.

Ittefaq group emerged as one of the richest family of Pakistan, with four members declaring their assets to be in excess of Rs 30 million ( one million US dollars), according to the Wealth Tax Directory published by the caretaker govt in 1993. Only 19 other individuals assessed their assets to be in excess of Rs 30 million and they included three each from Rupali and Schon groups and two from Chakwal group.

Following is the list of millionaires (owning assets over a million US dollars) as emerging from the Wealth Tax Directory published by the caretaker govt of Moeen Qureshi.

Sehr Saigol w/o Nasim Saigol declared her worth at Rs 188,51,382 while Shamim Farooq Saigol declared her assets at Rs 5,27,766 with Zero liability. Names of top industrialists like Nasim Saigol, Mian Mansha, Tariq Saeed Saigol, Rafiq Saigol, Rafiq Habib and members of Bawany and Dawood families did not appear in the tax directory at all or taxes paid by them was negligible.

" If my company announces a dividend, I will not draw my dividend and it will go to the reserve of the company and is reinvested. This reduces my tax liability", was implausible reply by Nasim Saigol when I asked him, as to how his name or others like him does not appear any where among the top tax payers.

Pakistan's nameless, faceless billionaires:

" The biggest landowner of this area is also Pakistan's biggest landowner. So Mr Pressman, please tell me who is biggest landowner of Pakistan?" he responded by counter questioning me.

From Gothki, a small road branches off to the native town of Ghulam Mohammad Mehr, Known as Khan Pur Sharif. His grandson, on vacation from studies from Europe confirmed what my guide had told me.

" My guide had told me that the land from Grand Trunk Road to Khan Pur Sharif belongs to your family?" I asked him

" And from here to Indian border also" came the prompt reply.

In August 1990, when Benazir govt was dismissed and replaced by caretaker govt of Ghulam Mustafa Jatoi, a former Indian Ambassador S K Singh wrote in an article, reproduced by daily, The Nation, Islamabad that Jatoi was Pakistan's biggest landowner owning 80,000 acres of land. I asked Singh at a meeting in New Delhi as to how he found out the size of Jatoi's holdings?

" It was Jatoi who had told me " replied Singh.

How Mehr and Jatoi could own tens of thousands of acres while agricultural reforms limited the land holdings to 150 acres is itself an interesting study for any enterprising journalist. But I can give a clue.

After Benazir govt dismissal in August 1990, caretaker Interior Minister Zahid Sarfraz claimed at a press conference that Asif Zardari was a bigamist and was married to one Aruna before he married Benazir. To substantiate his claim, he distributed documents about a loan secured from Agricultural Development Bank of Pakistan (ADBP) by members of the Zardari family including Bilqis Sultana wife of Hakim Ali Zardari, daughter Azra Hakim Ali and one Aruna Asif Ali w/o Asif Ali Zardari. As expected, the claim was rediculed by Bhutto family but nobody cared to talk about the veracity of the documents, apparently because everybody was aware of the practice of land holdings in the name of non-existent wives and children.

Bename ownership:

Malik Naeem, Commerce Minister in first Nawaz cabinet, told a meeting of Financial Writers Association in Islamabad in January, 1993 that an individual (Seth Abid) had invested Rs 5 billion in real estate in Lahore but his name does not appear in any govt transactions or govt document. Seth Abid is not a member of Lahore Stock Exchange but his Abid group is controlling the exchange through 25 members including his son and son-in-law.

In fact, benami transactions have received stamp of approval from the court of Law, as the Commission of Inquiry into affairs of Mehran Bank scandal had observed " In our country benami transactions are common and have been recognised by the courts, and a seller of property sometimes does not know, nor is supposed to know who are real purchasers, so long as the price paid is fair and the transaction is fair" The Commission concluded.

The voiceless small investors have been shouting from rooftops that multiple applications and inside trading is the biggest scourge of the Pakistani stock exchanges, yet like an ostrich, burying head in the sands, Corporate Law Authority (CLA) has discounted all such claims. It was only recently in the case of Southern Electric Company's public subscription that CLA found 15 cases of multiple applications and took a firm decision that the amount worth Rs 15 million should be seized.

During Benazir's first stint for power, Asif Zardari was accused of arranging loans worth several billion rupees for his front men in Ansari Sugar Mills, Sakrand Sugar Mills and Noushero Feroz Sugar Mills and in duty-free shop project of Fauzi Ali Kazim.

According to a news item in Daily The Nation, dated 17.3.97, Sindh govt Irrigation Secretary Idris Rajput accused Asif Zardari of constructing illegal water course on lands owned " in the name of his front man, one Ansari " in Rahuki town of Badin district. The prime objection of the govt official was against the construction of illegal water course since there was nothing wrong in owning land through front men.

A leading carpet export business in Lahore, Gulshan Carpets is owned by ladies of Ittefaq group ( Mariam Nawaz Sharif, Sabiha Shrif) but operated on their behalf by one Sheikh Hamid. No reference is ever made to Gulshan Carpets in any of the business transactions of the Ittefaq Group.

Banks and DFI's during Nawaz Sharif era sanctioned loans and invited bids for projects without revealing the name of the project and location, making it clear that these were instances of Benami holdings.

In the New Islamabad City Project, the four nationals of Singapore reported to be directors in the Singapore-based company were apparently fronting for somebody else since they have had no previous record of doing business. In the private sector TV channel, four foreign directors are again fronting for somebody because their antecedents were not known.

Privatization Commission had to abort its deals fr the sale of Pak-Saudi Fertilizer in 1993 under Nawaz Sharif and in 1995 under Benazir because the buyers were found to be fronting for politically heavy weights. Same happened with the proposed sale of United Bank Ltd to Bashrahill.

A UAE-based company of " carefully obscured antecedents, ARY Traders was given the monopoly of import of gold into Pakistan by Bhutto govt. " Who were the real beneficiaries of the decision to grant this monopoly?", President Leghari asked in his statement filed in Supreme Court, in 1997.

People with unknown and obscured means of income have successfully fronted for the political heavy wights because the Term of Reference (TOR) provided by the Privatization Commission stipulate that no question will be asked from the bidders about the source of income, because the foreign exchange accounts are above scrutiny and capital gains are exempted from income tax.

How Mehr and Jatoi own tens of thousands of agricultural land, in violation of agricultural reforms, an invisible Seth Abid invests Rs 5 billion in real estate in Lahore and controls Stock Exchange, how people can open scores of bank accounts, launch fake companies and borrow billions in their names? An answer to these questions can help plug some of the basic flaws in Pakistan's bubble economy and improve the working of institutions fathering corruption in Pakistan.
 
 

Pakistan's Tax Web

Table of Contents

Interesting Cases of making MONEY

Robber Barons of Pakistan