Senate body probes 'corruption' in solar panel import scandal
ISLAMABAD:
A Senate subcommittee on Finance on Monday raised serious concerns over a multi-billion-rupee corruption scandal in the import of solar panels.
The Senate Standing Committee on Finance's subcommittee questioned how certain companies managed to conduct transactions far exceeding the legally prescribed annual limit of Rs20 million, with some firms allegedly processing transactions worth Rs2 billion to Rs5 billion in a single year.
The panel was told that a total of 11 companies have been allegedly involved in the mega scandal.
Presided over by Senator Mohsin Aziz, the subcommittee convened to discuss the details of the scandal.
The Federal Board of Revenue (FBR) was heavily criticised for its failure to detect and prevent these suspicious transactions.
"How did a few companies manage transactions worth billions? Were these transactions conducted in the country of origin, the country of shipment, or elsewhere? If so, why?" Senator Aziz questioned.
He further probed how companies exceeded the Rs20 million annual transaction limits. "Where was the FBR when these suspicious transactions occurred?"
The committee revealed that 11 companies were involved in the Rs160 billion solar panel transactions, with two central players being Star Business Solution and Moonlight from Peshawar.
A private Islamic bank disclosed that the accounts for these companies were opened at its Badami Bagh branch in Lahore. Bright Star's account was opened on August 3, 2018, by Rab Nawaz and his wife, Zainab Nawaz, while Moonlight's account was initiated by Zahid Akbar. Bright Star began conducting business just three days after its account was opened.
According to the bank's representatives, Bright Star processed transactions worth Rs2.7 billion in 2018, Rs5 billion in 2019, Rs1.5 billion in 2020, Rs3 billion in 2021, and Rs2.5 billion in 2022.
Senator Aziz pointed out that while a single-day transaction limit was Rs2 million, these companies processed multiple millions in a single day. "How was this possible?"
The bank officials responded that transactions exceeding Rs2 million trigger a Currency Transaction Report (CTR), which is then forwarded to the Financial Monitoring Unit (FMU).
FMU representatives explained that receiving a CTR does not automatically indicate suspicion, but if a transaction appears dubious, a Suspicious Transaction Report (STR) is filed and forwarded to enforcement agencies for further action.
Senator Aziz demanded clarity on the enforcement agencies' actions against the companies implicated in the STRs, stressing the need for stricter scrutiny and accountability.
It is pertinent to note that earlier this month, the Post Clearance Audit (PCA) South uncovered a massive Rs106 billion money laundering scheme tied to fraudulent solar panel imports.
The investigation identified two brothers as the alleged masterminds behind the operation, which relied on a web of seven shell companies based in Peshawar and Lahore. Despite a declared financial worth of just Rs119 million, the companies laundered billions through over-invoiced solar panel imports.
PCA findings revealed that solar panel prices were inflated by up to 500%, with panels imported at $0.35$0.70 per watt, far exceeding the original $0.15 per watt cost in China. To conceal the illicit funds, Rs42 billion was deposited in cash across multiple commercial banks.
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