Timely Acquittal

FIA alleges money laundering through benami accounts but fails to link them to Sharif family

A special court in Lahore has acquitted Prime Minister Shehbaz Sharif and his son Hamza Shehbaz in a Rs 16 billion money laundering case that was lodged by the Federal Investigation Agency (FIA) in November 2020.

The case of Shehbaz Sharif’s second son, Suleman Shehbaz, who was also nominated in the case, is pending and will be decided once he appears in the court. He was declared a proclaimed offender due to his continued absence from the court hearings.

The case was lodged by the Federal Investigation Agency (FIA), alleging that their team had detected 28 benami, or proxy, bank accounts of the Shehbaz Sharif family which were used to launder Rs 16.3 billion during 2008-18.

The FIA booked Shehbaz Sharif and his two sons in November 2020 under Sections 419, 420, 468, 471, 34 and 109 of the Prevention of Corruption Act, read with Section 3/4 of Anti-Money Laundering Act.

According to FIA, the money was received in proxy accounts opened in the name of various low-wage employees of the Sharif family-owned Ramzan Sugar Mills Ltd, Al-Arabia Sugar Mills Ltd, as well as accounts of some “fake companies set up and controlled by the Sharif Group”.

As an example, the FIA claimed that during 2016-17, an amount of Rs 3.7 billion was deposited in a bank account owned by one Malik Maqsood, who was identified as a low-grade peon employed at the Sharif Group’s Model Town office in Lahore which was headed by Suleman Shehbaz.

However, later during investigations the FIA dropped some Rs 9 billion from its charge, saying it had been deposited in an account held not by the Sharif proxies but another accused, Mushtaq Cheeni. During the court proceedings, the defence raised the question as to why the FIA was keen to chase the Sharif family but not bothered about Cheeni’s affairs.

According to FIA, vouchers, cheques and money trail of deposits into the proxy accounts showed that most of it was not linked to receipts of sugar trade, but came from various sources such as contractors, petroleum dealers, pharmaceutical vendors and flour and rice mills owners.

At least eight hearings were held in the case, but it never led to the framing of charges against Shehbaz Sharif and Hamza. Progress in the case was often hampered either due to the absence of the accused, or, when they were present in the court, the unavailability of records that the prosecution’s case was based on.

Later, Shehbaz Sharif and Hamza moved applications seeking acquittal. Their lawyer argued that while a number of witnesses had recorded their statements in the case, none of them named any of the defendants as recipients of the money in those suspect accounts. He said the case was lodged by the FIA with a “malicious intent” to defame his clients.

During Wednesday’s hearing, the judge asked the prosecutor to provide evidence to support FIA’s stance that the Sharifs had been directly depositing or withdrawing money from those “proxy” accounts, or that transactions in those accounts were made on their direction, to which the FIA replied that it had no evidence to establish those claims, except that Shehbaz Sharif was the shareholder of Ramzan Sugar Mills, whose employees opened those accounts.

The FIA prosecutor argued that some of the accounts were operated by the administration of Ramzan Sugar Mills. But when asked by the court to submit his statement in writing, he said he was not authorized to file written statements.

In June, while ordering the pre-arrest bail of Shehbaz and Hamza, the court had stated that “prima facie, no evidence of corruption, misuse of authority and bribery” was thus far found on record against the father-son duo.

That order also referred to the statements of 64 witnesses recorded in the case, adding that according to those statements, the total amount of transactions recorded in those suspect accounts came to Rs 60.7 million, not Rs 60 billion as claimed by the FIA. Besides, none of those 64 witnesses named Shehbaz and Hamza as having links with those transactions, or mentioned any bribery, kickbacks or commissions, the court ruling said.