Executive Summary of JIT Report Panama Case

BACKGROUND

The release of the Panama Papers revealed that the family of Nawaz Sharif was the owner of several offshore companies located in British Virgin Islands. These offshore companies were responsible for the purchase of Avenfield apartments, and were also involved in funding and circulation of funds. This has lead to a scurry of media attention pertaining to the question of how the family of the Prime Minister got hold of such huge funds and whether their means of income justifies the assets. These questions have forced the Prime Minister to give an honest money trail for his and his family’s assets to confirm whether the PM used his public office to improve upon his financial condition.

CLARIFICATIONS

Respondent 1                                                          Mian Nawaz Sharif

Respondent 2                                                          National Accountability Bureau (NAB)

Respondents 3 and 4                                            Federation of Pakistan

Respondent 5                                                          Federal Board of Revenue

Respondent 6                                                          Maryam Safdar

Respondent 7                                                          Hussain Nawaz

Respondent 8                                                          Hassan Nawaz

Respondent 9                                                          M. Safdar

Respondent 10                                                       Ishaq Darr

Section 9 (a) of the National Accountability Ordinance 1999 states,

“9 (a) A holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices-

(v) if he or any of his dependents or benamidar owns, possesses, or has acquired right or title in any assets or holds irrevocable power of attorney in respect of any assets or pecuniary resources disproportionate to his known sources of income, which he  cannot reasonably account for or maintains a standard of living beyond that which is commensurate with his sources of income”

Section 14(c) of the ordinance puts the burden of proof on the respondents and the Court should assume the respondents are guilty unless proved otherwise.

  • In any trial of an offence punishable under clause (v) of sub-section (a) of section 9 of this Ordinance, the fact that the accused person or any other person on his behalf, is in possession, for which the accused person cannot satisfactorily account, of assets or pecuniary resources disproportionate to his known source of income, or that such person has, at or about the time of the commission of the, offence with which he is charged, obtained an accretion to his pecuniary resources or property for which he cannot satisfactorily account the Court shall presume, unless the contrary is proved, that the accused person is guilty of the offence of corruption and corrupt practices and his conviction [therefore] shall not be invalid by reason only that it is based solely on such a

QUESTIONS ANSWERED BY JIT

In pursuance of the order of the Honorable Supreme Court of Pakistan dated April 20th and implementation Bench Order dated 5th May, 2017, in case of C.M.A No. 2939 of 2017 in Constitutional Petition No. 29 of 2016, the Joint Investigation Team initiated the investigation into the affairs of the Panama Papers Case on 8th May 2017. The scope and mandate of the JIT focused on answering thirteen questions asked by the Supreme Court:

  • How did Gulf Steel Mills come into being
  • What led to its sale?
  • What happened to its liabilities?
  • Where did its sale proceeds end up?
  • How they reached Jeddah, Qatar and the UK?
  • Whether respondents 7 and 8, in their young ages, had the means to purchase and possess flats in the early nineties?
  • Whether sudden appearance of letters from Hammad Bin Jassim Bin Jaber Al-Thani (Qatari Prince) is a myth
  • How bearer shares crystallized into flats
  • Who is the real and beneficial owner of Nielson Enterprises ltd?
  • How did Hill Metals Establishment come into existence?
  • Where did money from Flagship Investment Ltd and other companies set up by respondent 8 come from?
  • Where did Working Capital for such companies come from?
  • Where do huge sums running into millions gifted by resp. 7 to rep. 1 drop in from.

JIT was also formed to investigate the acquired assets of the Respondents and to conclude   if the same were disproportionate to their means of income. Furthermore, JIT examined the evidence and material already available with FIA and NAB related to or having any nexus with the possession of Avenfield properties or any other properties.

METHODOLOGY

The investigation was conducted with the view to collect evidence to

  • corroborate or contradict the stance taken by the Respondents;
  • ascertain how the events actually

This was done by examining witnesses and collecting evidence, confirming events based on corroboration of statements by different witnesses, seeking Mutual Legal Assistance (MLA) from foreign countries to acquire essential documents, forensics and analysis of various records from various institutions and seeking assistance from expert document examiner when required. A reputed overseas Legal firm was selected to aid the JIT in issues related  to overseas jurisdiction and in procuring of evidence related to MLA abroad.

a.  WITNESSES

A total of 28 witnesses were summoned, of which 5 did not appear:

  1. Qatari Prince
  2. Sheikh Saeed (US national, close associate of Respondent No. 1, and required for Hudaibiya Mills Case (HMC) and Hill Metal Establishment money transactions)
  3. Moosa Ghani (nephew of wife of Ishaq Darr in relation to his involvement with fraud and fictitious money transactions associated with HMC)
  4. Qashif Masood Qazi (principle witness in HMC)
  5. Shezi Neckvi (plaintiff in Al-Towfeeq Case)

b. COLLECTION OF CASE MATERIAL

Apart from the documents and information filed in the Supreme Court by the parties, JIT had obtained and examined a comprehensive list of relevant documents from various institutions including banking records from the State Bank of Pakistan(SBP) and other commercial banks including bank account details of individuals associated with Panama Case, FBR record including Tax income Returns, wealth statements and Wealth Tax returns of Respondents, companies records from SECP, records of ongoing and pending cases before NAB and FIA and record of assets declaration of public office holders in nomination papers from ECP.

Note: Most of the government institutions, despite repeatedly asked, provided information selectively and in parts. FBR remained elusive with reference of provision of Tax returns of Mr. Ishaq Dar till the time he appeared before the JIT.

c. INVESTIGATION FROM ABROAD

JIT enlisted help from Attorney General of British Virgin Islands and Ministry of Justice  UAE. It hired the services of a UK based solicitor firm namely; QUIST, London to pursue MLA requests, arrange forensic investigations and render legal advice. A solicitor firm of BVI was hired to pursue inquiries in BVI. An investigative firm was hired in UK to assist in obtaining documents as well as assistance from Radley Forensic Document laboratory to comment on documents produced by witnesses pertaining to UK jurisdiction.

CRITICAL DOCUMENTARY EVIDENCE ACQUIRED

  1. Confirmation of Maryam Nawaz as the beneficial owner of BVI companies Nescoll and Nielson Ltd by Financial Investigation Agency, British Virgin Islands
  2. Confirmation of Chairmanship of Mian Nawaz Sharif in offshore company namely, FZE capital UAE by Jabel Ali Free Zone Authority (JAFZA)
  3. Confirmation of fictitious sale/purchase agreements submitted to the Court by the Respondents by Ministry of Justice UAE
  4. Submission of falsified/tampered Declaration of Trust submitted by Respondent No. 9 (Maryam Nawaz) as per report of forensic expert

GULF STEEL MILLS

Panama Papers, revealed that Sharif family owned the Avenfield Apartments through  creai0 offshore companies. During media interviews and before the SC, it was accepted that Sharif family owned the apartments which begged the questioned what the sources of the funds for the purchase of those apartments were and how those funds were transferred abroad. Gulf Steel Mills was the cornerstone explanation for the origin of funds for the purchase of those apartments, as well as oversees businesses established by family members of PM including Steel Mills in KSA. It was explained by Respondents 7 and 8 that the sale proceeds of Gulf Steel Mills were invested in cash and without paperwork, with the Al Thani family of Qatar and all subsequent overseas ventures were undertaken with the profit made from this investment.

Five out of the thirteen questions framed by the Honorable Supreme Court are related to Gulf Steel Mills i.e. How did Gulf Steel Mills come into being; what led to its sale; what happened to its liabilities; where did its sale proceeds end up; how they reached Jeddah, Qatar and the UK.

The JIT recorded the statements of Tariq Shafi, Mian Shahbaz Sharif and Respondents 1, 7 and 8.

JIT found that the witnesses and Respondents failed to provide any additional document before JIT to substantiate their stated position(s) on Gulf Steel Mills. Non-Provision of  asked corroborative documents/record and refusal to give data disclosure consent to JIT corroborate the fact that they were consciously veiling the evidence and possibility of its access by JIT.

TARIQ SHAFI’S AFFIDAVIT

QUICK SUMMARY:

Late Mian Muahmamd Sharif (Nawaz Sharif’s father) established a company in Dubai under the name of Gulf Steel Mills (GSM). in 1973, with Muhamamd Hussain. Mian Muhammad Sharif (MMS) made him shareholder. Sometime after the establishment of the GSM, M. Hussain, expired and pursuant to a cessation letter by all his legal heirs, the entire business of the GSM came to vest in Shafi’s name. Steel Mill factory was set up from finances generated from loans obtained from Bank of Commerce and Credit International (BCCI) in Dubai. NO AMOUNTS OF MONEY WERE TRANSFERRED FROM PAKISTAN FOR THE PURPOSE OF FINANCING OR RUNNING OF BUSINESS.

In 1878, MMS decided to sell off 75% of the shares of GSM to Mr. Abdullah Kaid Ahli to settle the Company’s outstanding liabilities with the banks in Dubai. GSM’S name was then changed to Ahli Steel Mills Company (ASTMC), with 75% of the capital being contributed by Mr. Ahli, with total capital of company being 28,500,000 AED. In 1980, MMS decided to disengage himself from the steel business in Dubai and in an agreement between Tariq Shafi, Ahli and MMS, the remaining 25% shares in Shafi’s name but owned by MMS were sold by MMS to Mr. Ahli for a consideration of 12 Million AED.A sum of 12 million AED was to be paid by Mr. Ahli over a period of 6 months, with the last DH. 10 million to be paid in 5 equal installments of 2 million AED each.

On instruction of MMS, Tariq Shafi deposited UAE Dirhams 12 Million with Qatari prince Fahad Bin Jassim Bin Jaber Al Thani after receipt of each installment by Mr. Ahli. The Qatari prince was frequently present in Dubai and received the net aggregate cash payment of 12 million AED from Shafi in Dubai.

According to the Sharif family, the profits from this investment of AED 12 million to the Qatari prince is the source of the funds behind the purchase of apartments and several companies of Nawaz Sharif’s sons.

SUMMARY OF JIT FINDINGS:

JIT FOUND TARIQ SHAFI’S STATEMENTS AND AFFIDAVITS FALSE AND UNRELIABLE. JIT CONCLUDED THAT THE STORY OF THE SALE OF THE GULF STEEL MILLS AND THAT OF THE QATARI PRINCE IS A CONCOCTED STORY WITH NO PLACE IN FACT.

SALE OF GULF STEEL MILLS

A letter from Ministry of Justice UAE stating that the share sale 25% agreement of 1980 does not exist. No transaction worth 12 million Dirham ever took place in the name of  Tariq Shafi. Thus, it is proved without a doubt that the story about sale proceeds worth 12 million AED is fake and fabricated. The only evidence produced by the Respondents to support their contention that there were 12 million AED as sale proceeds of 25% shares, available for investment, has not been authorized by the Dubai Authorities.

The sale agreement with Mr. Kayed Ahli in 1978 placed the responsibility of clearing all liabilities including electricity bills on the first party, Mr. Tariq Shafi. If AED 12 million  were handed over to the Qatari prince, how were liabilities to the tune of AED 14 million settled?

It is clear that the liabilities were settled because of the fact that Shafi took loans and worked in Dubai after the sale of the GSM. In 1987-1988, Tariq Shafi obtained loans from BCCI on his name, on instruction of MMS. As per banking rules, BCCI would not have given loans to Shafi had he not cleared his liabilities. The fact that liabilities were cleared promptly is evident from the fact that he was put on the ECL and warrants issued against him when he defaulted in 1989. He would not have been able to work in Dubai if the liabilities of gulf steel, which he ostensibly owned, were not cleared in time.

TRANSACTION TO QATARI PRINCE

There were liabilities of 14 Million dirham received on account of sale of 25% shares, thus, it is not possible that this sum was transferred to Mr. Al-Thani for investment in  Real Estate.

It is implausible that a transaction concerning handing over of AED 12 million in cash  would take place without any receipt or record. There are several contradictions in Shafi’s statement, where he states that he was not trusted to deal with cash transactions of over AED 6000 and that he issued cheques for larger amount of money; thus, it is unlikely that  he would be trusted to deal with such a large amount of money just to be handed over without any receipt. The statement of Mr. Tariq Shafi, the letter by Al Thani and the Sale Agreement of Gulf Steel Mills produced by Respondent are inconsistent with each other. The documentary and circumstantial evidence, when examined with evidence, do not indicate any cash payment to Tariq Shafi by Mr. Ahli on account of sale of remaining 25% shares of Gulf Steel Mills in 1980. Accordingly, payment of 12 million Dirhams cash to the Qatari prince, which is claimed to be the source money for setting up various businesses, becomes a myth and not a reality. Inconsistencies in statements of witnesses when reviewed with documentary evidence indicate that Tariq Shafi neither received 12 Million Dirhams nor did he hand over this account to Qatari prince; he, in fact, tried to mislead the court.

CONTRADICTIONS IN WITNESS STATEMENTS

JIT found that there were total inconsistencies between the statements of the witnesses, a factor which lead to its conclusion. The Respondents No. 1, 6, 7 and 8’s defense about seed money (12 Million Dirhams) for their business and properties (especially Avenfield Apartments) hinges upon Affidavits submitted by M. Tariq Shafi. Thus, the statement of Tariq Shafi was cross- analyzed with statement given by Resp. 1, 7 and 8 and Shahbaz Sharif.

JIT found that annexures of Tariq Shafi were drafted by Barrister Salman A. Raja on behalf of Tariq Shafi. The witness had not read or understood the Affidavit before signing and failed to justify contents of the affidavit while attributing anomalies to the lawyer. JIT finds the documents factually incorrect, tampered with and concludes that they cannot be relied upon.

i.  TARIQ SHAFI

JIT found Shafi’s affidavit in total contradiction with his statement before the JIT, where he claimed MMS was the sole owner.

In his affidavit, Tariq Shafi explains the origins of Gulf Steel Mills and its sale. Through cross analyzing his affidavits with his statement infront of the JIT as well as documents obtained from UAE and several institutions, JIT has found many inconsistencies, leading it to conclude that Tariq Shafi’s statement is unreliable. Some contradictions include:

  1. Affidavit: In his affidavit, in Paragraph 3, Tariq Shafi states that the late Mian Muahmamd Sharif (Nawaz Sharif’s father) established, in a partnership with one Muhamamd Hussain, a company in Dubai under the name of Gulf Steel

CONTRADICTION: In his statement, however, he repeatedly stated that Mian Sharif was the sole owner of Gulf Steel Mills, which was acquired by 100% loan without any equity, and that he had never met M. Hussain and failed to explain the role of M. Hussain in the company.

  1. He stated in the affidavit that in 1973, MMS (Mian Muhammad Sharif) made him shareholder.

CONTRADICTION: This is contrary to his stance that MMS was sole owner. In his statement, he readily accepts himself to be the benamidar of MMS, however, he could not provide any evidence that could corroborate his assertion, especially in the backdrop of Shahbaz Sharif’s role in the management of the company.

  1. Affidavit: He said he signed the agreement being the ostensible owner to the extent of my

late Uncle’s share in the company.

CONTRADICTION: In in his statement, he could not explain what ostensible owner meant nor “to the extent of my late uncle’s share”. He apprised that his lawyer Salman Akram Raja drafted the Affidavit and that he only cursorily reviewed it, and blamed contradictions on his lawyer.

  1. Affidavit: Sometime after the establishment of the GSM, M. Hussain, one of the partners, expired and pursuant to a cessation letter by all his legal heirs, the entire business of the company came to vest in Shafi’s

CONTRADICTION: He reiterated in his statement that MMS was sole owner and that he  had never met M. Hussain. He could not confirm the date of Mr. Hussain’s death indicating that his role as a partner was limited to his name on the documents. He failed to produce a copy of the cessation letter.

  1. Affidavit: Steel Mill factory was set up from finances generated from loans obtained from Bank of Commerce and Credit International (BCCI) in Dubai. No amounts of money were transferred from Pakistan for the purpose of financing or running of

CONTRADICTION: He failed to produce any evidence or documentation to prove that the factory was established on 100% loans without any equity; this is a statement against banking and accounting norms and laws.

  1. Affidavit: Ministry of Justice UAE has certified that the share sale 25% agreement of 1980 does not exist. No transaction worth 12 million Dirham ever took place in the name of Tariq

In his statement, Tariq Shafi said he received the AED 12 million in 6 installments of 2 million AED with no receipt made for the transactions. This does not correspond with the norms of commercial transactions keeping in view that the entire sale consideration was to be secured against a bank guarantee. When this anomaly was pointed out, Tariq Shafi changed his stance stating no bank guarantee was arranged by Mr. Ahli.

Mr. Tariq Shafi’s first affidavit makes no mention of Qatari prince; thus, in retrospect, it is fair to conclude that Qatari factor was an afterthought by Respondents, later covered up in the second affidavit.

Moreover, his signature in the affidavit is completely different from his signatures on  most

of the company’s documents including tripartite agreements submitted voluntarily by him.

Tariq Shafi’s claim of carrying and handing over cash of AED 2 million without any receipt or written acknowledgment is not plausible when seen in relation to the mention of bank guarantees in the contract. Moreover, per his own statement, he was authorized to handle only small amounts of payments, and his own preference was to issue cheques for larger amounts of money. He stated he was told by MMS that people who collected AED 12 million were from were representatives of Al Thani, yet he had no information on their identities, therefore, his assertion that he made payment to Al Thani’s representatives are an assumption and cannot be relied upon.

ii.  MIAN NAWAZ SHARIF

First, he refused to answer questions and said he did not know Muhammad Hussain nor his partnership in Gulf Steel Mills. After two and a half hours of the interview, he admitted only to the extent of knowing Muhammad Hussain as his uncle (Khaloo). Throughout time, his stance on Gulf Steel was:

  1. Address in National Assembly (16 May 2016)

“Our father reached Dubai for the purpose of business and established a factory with the name of Gulf Steel, comprising of 10 lac square feet of area. The factory in 1980 was sold  for 33.37 million Dirhams.”

  1. Statement before JIT

He said Gulf Mills was set up mainly from loans and that he never held any beneficial interest in Gulf Steel Mills. He declined to comment on details of sale proceeds and stated that he had no knowledge on much details of the business. Mian Nawaz Sharif’s statement that the factory was sold for 33.3 million dirhams (9 million dollars) cannot be corroborated.

ii.  INCONSISTENCIES IN HUSSAIN NAWAZ’S STATEMENT AND TARIQ SHAFI

JIT investigated the authenticity of the documents provided by the Respondents in regards to Gulf Steel Mills. It concluded that the dichotomies in statements alone are enough to undermine the authenticity of the documents produced. Inconsistent statements of Tariq Shafi and Hussain Nawaz with reference to visit in Dubai for attestation of provided documents by Notary Public Dubai and Pakistan Consulate Dubai shed doubt on whether documents were attested properly. Tariq Shafi did not see the documents nor did he have them attested; yet he said he went to Dubai to attest them with Hussain Nawaz, who denied that he visited Dubai for attestation purposes. Tariq Shafi said they were obtained by Hussain Nawaz who declined to confirm the name of the individual who got them certified.

The permission letter granted by the Government of Dubai is not attested or notarized.

iii.  SHAHBAZ SHARIF

He stated that Tariq Shafi was the beneficial owner, which is inconsistent with the statements of Shafi, Nawaz Sharif and Hussain Nawaz. When asked about liabilities, he said he did not have any knowledge. It is not logical that he admits assisting Shafi in preparation of Shares Sale Agreement (1978) yet not have any knowledge of liabilities.

CONCLUSIVE FINDINGS

  1. Gulf Steel Mills was a family business and the MMS was actual owner, and Tariq Shafi (an orphan and a minor) and Muhammad Hussain (a British national) were listed as Benami owners to distance himself and his immediate family members from prosecution under Foreign Assets (Declaration) Regulation
  2. Affidavits of Tariq Shafi are factually incorrect, tampered and misleading and cannot be relied
  3. As per information received by UAE government, Share Sale Agreement 1980 does not exist, hence attached copy is fictitious, unauthenticated and fabricated.
  4. Stated position of Respondents and Tariq Shafi on sale proceeds of 12 million Dirhams is false, inconsistent and factually
  5. NS during his address to the nation stated that in 1980 the factory (Gulf Steel Mills) was sold for 33.3 million AED. This is not consistent with the documents provided by the respondents.
  6. Tariq Shafi neither received AED 12 million from Ahli as sale proceeds of remaining 25% shares of Ahli Mills nor did he hand over this money to the Qatari
  7. Gulf Steel Mills held liabilities to the tune of 36 million AED, of which 21 million were cleared in 1978, while 14 million cleared in 1980 without any document or record
  8. Tariq Shafi produced false and fabricated findings but also has a tainted reputation as he defaulted on loans and placed on ECL by UAE
  9. Respondents misstated about transportation of scrap facilities from UAE to Jeddah. LC documentation of transportation is unauthentic and

Story of respondents about Gulf Steel Mills is unauthentic, lacks substance and seems fabricated.

OWNERSHIP OF AVENFIELD APARTMENTS

JIT aimed to answer three essential questions pertaining to Avenfield Apartments:

  1. Whether respondents 7 and 8, in view of their tender ages, had the means to possess and

purchase the flats in the early 90’s

  1. How bearer shares crystallized into flats
  2. Who is the real and beneficial owner of company Nielson Enterprises Ltd, and Nescoll Ltd?

BACKGROUND

Panama Papers alleged that Sharif family owns Avenfield apartments through offshore companies. During media interviews and SC hearings, ownership of apartments was admitted.

Leaked Panama Papers show Mariam Safdar as the beneficial owner of Nielson and Nescoll Ltd by the Financial Investigation Agency of British Virgin Islands; that propelled confusion whether it was Maryam Nawaz or Hussain Nawaz who stated he was beneficiary of a trust of which Mariam Nawaz was trustee. What are sources of those funds for the purchase of those apartments and how were they funded?

Apartments were purchased through BVI companies Neilson and Nescoll in 1993-1996. During proceedings before SC, respondents admitted not only possession but also the fact that the family had been paying rent. Beneficiary was Hussain and Hassan Nawaz, which raise the question how they in their early ages had the means to posses and purchase the flats.

Qatari investment became the primary explanation for the funds of the apartments, as well as overseas businesses. Respondents 7 and 8 state that sale proceeds of Gulf Steel Mills were invested, without documentation, in investment in Qatar, and all subsequent ventures were undertaken by the profits made by the investment.

Ownership of apartments admitted from 2006 onwards and ownership of companies was claimed to be of Qatari family, which transferred the bearer certificates as a result of final settlement between Sharif family.

METHODOLOGY

Seven statements recorded: of Nawaz Sharif, Shahbaz Sharif, Mariam Safdar (Respondent No.6), Respondent No. 7, Respondent No. 8 and Captain M. Safdar (Respondent No.9).

MONEY TRAIL

  1. DOCUMENTS BY RESPONDENTS

Respondents stated that the companies Neilson and Nescoll, which were sole shareholders of Avenfield apartments, belonged to Qatari Prince. Apartments were in possession  of Sharif family since 1993. In 2006, as a consequence of settlement with Al-Thani, the bearer shares were transferred to Hussain Nawaz, who became the sole beneficial owner of Nielson and Nescoll. In February 2006, a trust deed was signed between Hussain Nawaz and Mariam Nawaz declaring Maryam Nawaz as trustee of Avenfield properties. In 2008, another trust deed was signed. Maryam Nawaz was asked to bring original trust deed, she stated she did but they were actually good photocopies.

Respondents 1, 6, 7 and 8 provided selective documents, despite prior notice. Respondents provided 4 documents with respect to their defense: Trust deed, Share Certificates of Nescoll and Nielson Ltd, Copy of Qatari prince letter, Worksheet for settlement.

DOCUMENTS ACQUIRED BY JIT

There are certain key documents, mainly correspondence with the Director of FIA in BVI, and with Mossack Fonseca & Co, which helped the JIT draw conclusion about not only the ownership of the apartments but nearly all questions raised by the Honorable Supreme Court.

In response to JIT’s MLA, Mr. Errol George (Director, Financial Investigation Agency, BVI) has certified his correspondence with Nizbeth Maduro (Money Laundering Reporting Officer, Mossack Fonseca & Co (BVI) during June 2012 as true copies. The correspondence of letters confirms that beneficial owner of the Nescoll Ltd and Nielson Ltd is Maryam Safdar whose address is Saroor Palace, Bazou Al Eman St. Ruwais, Jeddah, KSA.

These letters are certified and authenticated and render incorrect the defense of Maryam Safdar and Hussain Nawaz with respect to the beneficial ownership of the apartments and the Trust Deed submitted. The authentication of the documents by Errol George and their receipt through formal official channels of Attorney General’s Office of BVI prove beyond a doubt that Maryam Safdar was the real and beneficial owner of Nielson and Nescoll offshore companies in 2012 and thus the Avenfield apartments. The analysis of Ms.  Maryam Safdar shows that she has never declared Avenfield Apartments as her overseas properties.

CONCLUSION: Maryam Safdar has submitted fake/falsified documents to the JIT which is a criminal offense. These documents are decoys to manipulate facts and camouflage truth. Hussain Nawaz and M. Safdar have signed these documents, and thus are prima facie involved in manipulating and misleading the Supreme Court.

LEGAL OPINION ON VALIDITY OF NIELSON/NESCOLL DECLARATION OF TRUST

JIT consulted the expert opinion of Gilead Cooper OC which states that as a matter of English law, there are two methods by which a trust can be created; either a settler  declares himself a trustee of property belonging to him; or a settler may transfer property to a trustee who accepts the trust the case of bearer shares; the legal title is vested in whoever has physical possession of the share certificates and in order for the trust to be fully constituted, the certificates must be physically handed to the trustee. There is no mention of bearer shares ever being handed over in this case and both Maryam Safdar and Hussain Nawaz have stated that they have never seen the bearer shares. If the transfer of bearer shares did not take place, there is no trust.

If this legal position is accepted, which JIT agrees with, then the obvious consequence is that the Nielson/Nescoll declaration of Trust did not create a valid and lawful trust under English law.

Moreover, Respondents have admitted that the bearer shares were cancelled in July 2006 and new registered shares were issued in the name of Minerva entities. The cancellation of bearer shares would have terminated any trust that may have existed as it left Respondent No. 6 with nothing over which she could be a trustee. Even if assuming there was a valid trust over bearer shares, it would have terminated in July 2006 when the bearer shares were cancelled.

AUTHENTICITY OF TRUST DEED PRODUCED BY RESPONDENTS

  1. FAILURE OF SOLICITOR JEREMY FREEMAN TO ANSWER EXHAUSTIVE QUESTIONS

The JIT underwent an exhaustive examination regime to include seeking comments from the solicitor Jeremy Freeman who had authenticated the trust deed. His response was elusive, delaying and ended with a request not to correspond further. Mr. Freeman’s failure to answer in comprehensive terms to Quist’s letter is strongly indicative of the fact that to do so would have incriminated not only Hussain Nawaz and Mariam Nawaz but also other respondents in addition to Freeman himself.

ii.    RADLEY FORENSIC DOCUMENT LABORATORY (FORENSIC HANDWRITING AND DOCUMENT EXAMINATION EXPERTS)

JIT, after noticing some obvious cuttings in the dates in the photocopied documents presented by the Respondents, got an expert opinion from Radley Forensic Document Laboratory (Forensic Handwriting and Document Examination Experts) in London. The  Lab submitted a comprehensive report concluding that the trust deed was a false  document. Some key indicators were:

  1. Both documents had been unbound with the removal of the eyelet and staples and rebound with the same eyelet and
  2. Type font was “Calibri”, which was not commercially available in February 2006

CONCLUSIVE FINDINGS

  1. Maryam Safdar is the real and beneficial owner of Nielson and Nescoll offshore Companies and owned Avenfield apartments since 2012 and
  2. Trust declaration documents are fake and fabricated documents. These documents are decoys to mislead the Honorable Supreme
  3. Non-provision of requested corroborative documents and refusal to give “Data Disclosure Consent” to the JIT by respondents corroborate the fact that the respondents are deliberately veiling

STATEMENTS OF RESPONDENTS

There are several inconsistencies between statements of witnesses. Hussain Nawaz said only Apartment 17 was in his possession in 1994 but Hasan Nawaz said Apartment 16, 16a and 17 were already in Hussain’s possession when he reached London in 1994. Hussain Nawaz thus is prima facie not truthful to JIT about possession of apartments. Hassan stated that Hussain was paying ground rent and utilities since 1994 to 2000; this is not consistent with statement of Hussain Nawaz who said he did not pay until after he left London in 1996.

Nawaz Sharif could not explain the timeframe and procedure of obtaining possession of apartments and did not know which son had ownership of which apartment. He admitted that he stayed in Apartment 16 when he visited London. His exclusive use of the apartment makes him the sole beneficiary of the apartment as far as possession is concerned.

Although there is sufficient evidence to conclude that the Trust Deed submitted by Respondent No. 6 is false, JIT analyzed the statements of the witnesses further, whose inconsistencies corroborate the authentic documentary evidence.

Hussain Nawaz stated that there was no written agreement prepared between the parties about the settlement that was made after 25 years to “avoid further litigation”. Argument of not signing an agreement to settle an investment spread over decades and involving payments for which no proof exists, is beyond comprehension and highly improbable.

Captain Muhammad Safdar stated that even today he did not know the owner of apartments and had never discussed it, which is widely implausible considering the issue has been discussed in media for many years and the fact that he has used the apartments many times. He claimed to have signed the trust deed, yet did not know of ownership of apartments and did not know the contents or details of trust deed. When confronted with the trust deed, he claimed it to be an incomplete and photocopied document. His inability  to recall contents of claimed trust deed vindicated that no trust deed existed.

Mian Nawaz Sharif showed ignorance about claimed trust deed and Hasan Nawaz said that this was the first time he came to know of trust deed. The secrecy with which it was conducted sheds doubt on its existence.

Family Asset settlement by Sharif family executed in 2009 was investigated by JIT. Assets settlement  does  not  cover  or  contain  any  detail  of  property  outside  Pakistan specially Avenfield Apartments. Shahbaz Sharif also verified assets settlement in 2009 but failed to justify non-inclusion of apartments or investment with Al Thani.

AL-TOWFEEK CASE

JIT investigated the 1998 Al-Towfeek litigation in which plaintiff was Al-Towfeek and defendants were Hudabiya Paper Mills, Shahbaz Sharif, Mian Muhammad Sharif and Abbas Sharif. Proceedings were issued in London to recover a loan made by Al-Towfeek to Hudabiya mils. In November 1999, the English High Court granted a charging order over the Mayfair apartments in favour of the Plaintiff. The order clearly states that the defendants have a beneficial interest in the Mayfair apartments. Despite the incarceration,  a settlement was reached and a consent order was filled in the High Court in January 2000. JIT has a draft copy of the consent order which states that the charging order be discharged upon payment.

Hudabiya Paper Mills directors included MMS, Shahbaz Sharif, Abbas Sharif and Hamza Shahbaz. In 1996, Maryam Nawaz was made director instead of Shahbaz Sharif.

On being interrogated by JIT, Shahbaz Sharif said the judgment of the English High Court was squashed by the Lahore High Court, which is patently false, and nor could he produce the relevant LHC judgment. He persisted that JIT could not probe into this issue and remained adamant about not answering any questions pertaining to Mayfair apartments.

Hassan Nawaz denied any knowledge pertaining to payment of US $8 million for the Al Towfeek litigation, a sharp contrast to statements by Hassan and Hussain Nawaz that Respondent No. 7 was informed by the Al-Thani family that a sum of US  $8 million  had been paid during the year 2000 to the Al Towfeek Company for Investment funds.

CONCLUSIVE FINDINGS

  1. True owners of Mayfair apartments at the time of the Al Towfeek litigation in 1999 were Sharif family, which included most likely Respondent No. 1, who seems to be employing his children and two BVI entities to conceal his beneficial ownership in the Mayfair properties
  2. Available record of English High Court show that members of Al Thani family had no real interest with Mayfair apartments as nobody other than Sharif family was represented in legal proceedings. There is not even an oblique reference to the Sharifs in the settlement agreement.
  3. No evidence of the payment of $8 million by the Al Thani family on instructions of
  4. Absence of role of Al Thani family in Mayfair apartments, as well as in Neilson or Nescoll, as far as 1999, is clearly

The obvious and very strong inference is that beneficial owners were not the Al Thani family.

SPECIFIC ANSWERS TO QUESTIONS RAISED BY HONORABLE SUPREME COURT

1.       WHETHER  RESPONDENTS  7  AND 8, IN  VIEW  OF  THEIR TENDER  AGES HAD  THE

MEANS TO POSSESS AND PURCHASE THE FLATS IN THE EARLY 90’S?

Hassan and Hussain Nawaz did not have independent source of income till 2000 and were dependent on parents. It was only after 2001 that they claimed to have independent businesses. (Azizia Steel Mills and Flagship Investments)

Resp. 7 and 8 did not have means to purchase, maintain or manage Avenfield properties.

2.    HOW BEARER SHARES CRYSTALLIZED INTO FLATS

Claim of respondents of letter by Qatari prince is totally false. Fabrication of evidence of trust deed from 2006 and BVI authorities of FIA documents showing Maryam Nawaz as beneficial owner makes it clear that the issue of bearer certificates crystallizing into flats is no more relevant. Flats are not the property of Qatari family and handing over of bearer shares is a myth.

3.    WHO IS THE REAL AND BENEFICIAL OWNER OF NIELSON AND NESCOLL LTD.?

Hussain Nawaz did not produce any document proving his ownership of the said companies despite repeated demand by JIT.

JIT can conclusively state that Maryam Nawaz was and is the beneficial owner of Avenfield Properties through Nielson and Nescoll and claim of Maryam Nawaz of being the” trustee” was an attempt to deceive the SC.

QATARI LETTERS

The significant question to answer is whether the appearance of the Qatari prince letters is a myth or a reality.

Hussain Nawaz accepted ownership of apartments and struggled to find a means used to purchase them. Throughout media interviews and half of SC proceedings, there was no mention of a Qatari prince. On 5th of November 2016, council of Respondent No.6, 7 and 8 presented a letter by Qatari prince as final defense of how sale proceeds of Gulf steel with the Royal family in 1980 resulted in Avenfield apartments becoming property of Sharif family, as well as all other businesses.

INVESTIGATION METHODOLOGY:

JIT recorded statements of Respondents No. 1, 7, 8 and Shahbaz Sharif. Respondents failed to produce any documents before JIT to corroborate contents of Qatari prince letters. JIT initiated request for MLA to UK, BVI, UAE and Switzerland to obtain evidence to establish ownership of Nielson and Nescoll Ltd. and to collect evidence that would corroborate or contradict letters sent by Al-Thani.

JIT FINDINGS

There were serious inconsistencies in the stances taken in the letters by the Qatari prince, as well as with Hussain Nawaz’s statement. In the first letter Hussain Nawaz was the sole beneficiary of the investment but distributions made in the second letter also include Hassan Nawaz. Most of the claims made in the letter by Al-Thani are made on heresy. There were also hand written notes and a worksheet to explain “accruals and other distributions”. This raises serious doubts about the veracity of the letters.

1) ISSUE OF DOCUMENTATION:

It was claimed by the respondents that there was no documentation for the sizable investment of AED 12 million as Hussain Nawaz said his grandfather didn’t believe in documentation neither was it the norm in the Gulf. However, documentation of establishment of Gulf Steel Mills is detailed and shows documentation was the norm. Lack of documentation for such a sizable investment is implausible.

2) ISSUE OF CASH PAYMENT AND TRANSFER:

Statement of Tariq Shafi, letter by Qatari prince and sale deed of Gulf Steel Mills (proved to be false) are inconsistent with each other. In his statement before JIT, Tariq Shafi said he had never met Al-Thani nor maid any direct payment. His claim in his affidavit of handing over money to Al-Thani completely contradicts his statement. Tariq Shafi failed to produce any receipt/record of transfer of money to Al Thani.

Tariq Shafi himself admitted he only handled in small cash not above 60000 AED, thus it is unlikely he would handle 12 million AED. He also stated he gives large amounts of money  in checks. It is also mentioned in sale agreement that bank guarantees were kept for payment from Mr. Ahli to him. This belies his claim that payment was made on verbal instructions and trust.

Moreover there were liabilities of AED 14 million from the sale of Gulf Steel; thus it is not plausible that AED 12 million was paid to the Qatari prince.

JIT CONCLUSION: QATARI PRINCE NEITHER RECEIVED AED 12 MILLION NOR DID TARIQ SHAFI RECEIVE IT FROM MR. AHLI AS SALE PROCEEDS

There is also a silence of the Sharif family on the Qatari investment, a silence which only awakened when half of the Supreme Court proceedings had taken place. Hussain Nawaz  did not mention the Qatari prince in a TV interview with Jawad Chaudhary when asked about source of income to establish factory at Jeddah or of Qatari assistance. He said he did not mention him to avoid controversy. Omission of the family to even hint at Qatari investment despite relentless media attention is incomprehensible according to the JIT.

INCONSISTENCIES IN STATEMENTS OF RESPONDENTS

There were inconsistencies between Respondent No. 7 and No.1’s statements where Resp.1 claimed no knowledge of Qatari payment for Mayfair apartments and Resp. 7 said he had knowledge about it. Reluctance of key witnesses such as Shahbaz Sharif to answer any questions related to the Qatari investment seems like a conscious effort to steer away from it to avoid further contradictions.

There is discrepancy between the Qatari letter and the first affidavit by Tariq Shafi. The first affidavit did not find any mention of Qatari investment. The omission in the first affidavit of Tariq Shafi, despite the letter of the Qatari being submitted to the Supreme Court is perplexing.

On the issue of the bearer shares being transferred from Al-Thani to the Sharif family, Hussain Nawaz had contradictory statements, first saying that the bearer shares had been sent in 2006 by Mr. Waqar Ahmad and Nasir Khamis, and was unable to explain how they had been sent to Minerva. He later changed his statement in 2007 when he said that he gave the instructions to Waqar Ahmed to send the shares to Minerva. He and Maryam Nawaz said they never saw the bearer shares, making the trust deed inauthentic.

AUTHENTICITY OF ENTRIES IN SPREAD SHEET ATTACHED TO SECOND QATARI LETTER

Al Thani tried to justify various investments made by Resp.1, however neither he nor respondent could provide one corroborating document to provide banking transaction or connect missing links. The document he submitted (a spreadsheet of investments he  owned through Respondent No. 1’s sons) cannot be admitted as evidence. The spreadsheet is not an official document, submitted without any date, letterhead, signatures and certificate. In actuality, returns in real estate business are not linear yet the pattern of the rate of annual interest in the spreadsheet is linear thus seems artificial.

Inconsistencies in statements of Hassan and Hussain Nawaz make the transactions in the spreadsheet seriously questionable which could only have been explained by Al Thani himself.

TRANSACTIONS SHOWN FOR BUSINESS ACCOUNTS OF MR. HASSAN NAWAZ (US $3.72 MILLION)

Hassan Nawaz said that Hussain had sent him about 2.4 million GBP to help him set up a business without disclosing the source. Hussain Nawaz said that after discussion with representative of Al-Thani, he had sent a fax of the spreadsheet to Hassan Nawaz to  confirm the transaction.

No documents were produced to corroborate the claims made in the statements or letters.

Conflicting accounts of the brothers show that investment with Al-Thani family is factually incorrect.

AL TOWFEEK CASE

Respondents claimed that US $8 million were paid by Al-Thani to settle the Al-Towfeek investment. If this is true, then this should have reflected in the accounts of Hudabiya Paper Mills Ltd. as a loan from directors, as Mian Sharif was director of the company at the date of substitution.

SPECIFIC ANSWERS

The fact that there were material contradictions between the statements of the respondents, the heresy nature of the letters with no documentation, the affidavits of Tariq Shafi found totally wanting as evidence is quite sufficient to state that the letters are a myth than a reality.

(1) Response by UAE authorities establishes that the gulf steel agreement is a false document, which has been submitted in the Apex Court by Respondents 6, 7 and 8.

2) the response to the MLA by the financial investigation agency, BVI establishing that the panama leak document showing Ms. Maryam Safdar as beneficial owner of Nescoll and Neilson is genuine and lastly as per report of the document expect that the two trust deeds sent by Respondent No. 6, 7 and 9 are false and to mislead the court. On strength of overwhelming documentary evidence, it is concluded that the appearance of the letters of Qatari prince are a myth.

PART II: EFFORT TO RECORD MR. AL THANI’S STATEMENT

Special arrangements were made to ensure timely delivery of summons to Al Thani. Response from Al Thani remained wanting and lacked urgency. He was given adequate time and multiple opportunities to appear before JIT (even in Qatar) but to no avail. JIT offered to record the statements of the Qatari prince in Qatar on 28th or 29th June.

Mr. Thani refused to be subject to the jurisdiction of Pakistani laws and Pakistani courts in any manner whatsoever. He chose to delay his responses to the last minute and repeatedly asked that the jurisdiction of Pakistani laws do not apply to him. This led the JIT to  conclude that it has collected sufficient evidence so the appearance or non-appearance of  Al Thani was not significant.

HILL METAL ESTABLISHMENT AND GIFTS

  • How did Hill metal Establishment come into existence? Where did its working capital come from?
  • Where do the huge sums running into millions gifted by Resp. 7 to Res. 1 come from?

Hundreds of millions of rupee gifts from Respondent No. 7 to Respondent No. 1 were being discussed. It was established that this was a successful concern and is generating huge amounts of profits out of which he sends certain sums to Resp. 1 by way of gifts.

JIT recorded statements of Resp. 1, 7, 8, Rehman Malik and Shahbaz Sharif. In 2006, Respondent No. 7 set up a new steel mill manufacturing business in Jeddah, Saudi Arabia by utilizing the sale proceeds of the Aziza Steel Mills Company. The annual cash flow and retained earnings from this business have enabled the Respondent No. 7 to send remittances to his father in Pakistan. The purpose of these remittances has been to free his father from any financial constraints, given his full time involvement in politics. The only document produced y respondents to prove this was a copy of the sale agreement between Al Aziza Steel Company (ASCL) and Al- Ittefaq Steel Products Company Ltd (Purchaser).

A summary of the statement of Respondent 7 before the JIT is:

  • Sole source of funding for the setting up of HME was the sale proceeds of
  • Entire net proceeds of sale was received by resp. No. 7

Analysis of JIT

Hussain Nawaz failed to produce essential documents such as Articles of Association, memorandum of ASCL to ascertain the sources used to set up his factory in 2001. He said further funding was provided by Al-Thani. The loan amount calculated, even hypothetically, still falls short of the amount spent in the year 2001  by USD $4.5 million.

Respondents claim that machinery was transported from Dubai to Jeddah has been  proven

false by the UAE government’s denial of any such transportation.

OWNERSHIP OF ASCL:

It has been claimed that sale proceeds of ASCL were the sole funding for setting up HME. This is contradicted by the following facts:

It is claimed that a net amount of SAR 63.1 million were received by Respondent No. 7 for his sole benefit, whose proceeds he furthered as “sponsor funding”. However inconsistencies in the statements of respondents reveal that Respondent No. 1 and his brothers all had an equal share in ASCL which was held on behalf through their respective children in the case of Respondent No. 1 and Shahbaz Sharif. Thus Respondent No. 7 would only have been entitled to one third of the net proceeds from the sale of ASCL. If net proceeds are accepted to be SAR 63.10 million, that would amount to SAR 21 million, which is significantly less. This raised the question whether HME was funded by undisclosed means or persons.

While Respondent No. 7 has maintained before the Honorable Supreme Court that he received sale proceeds of SAR 63.1 million through three cheques mentioned in an unsigned document, the investigation of JIT and sourced documents obtained by it shows that Respondent No 7 has concealed the existence of three further agreements in relation  to the sale and transfer of ASCL’s assets. These sourced documents have been obtained by the JIT through employing a consultant law firm (Guernica Intentional Justice Chambers) which has confirmed to the JIT that the documents have been obtained from a number of open and confidential sources and that they are original and verified.

These documents conclusively establish that the net proceeds received by the Respondent No. 7 were only SAR 42.47 million. The documents were an amending agreement, a mandate to act as an attorney and a mandate to act as an Escrow Agent all bearing the signatures of Respondent No. 7. These source documents if accepted completely negate the statement of the Respondent No. 7 with respect to the amount of funding he received.

Although it has been claimed that source of debt to set up HME came was a short term funding from friends and business associated, as well as SIDF and commercial banks in KSA, the Respondent could not provide any documentary proof to substantiate the claim. SIDF loans did not become available to the respondent until 2010 and the steel mill was set

up in 2005. Respondent also mislead the court by stating he had access to a facility of SAR 35 million from Al-Rajhi Bank, which JIT, upon investigation, found had been canceled. JIT found that Respondent No. 7’s personal bank account with NCB was also used to inject funds of unknown and undisclosed sources into HME.

A source document obtained by JIT called the Receipts and Payments Account of HME show a reference to CFZ, showing an amount of US $1,000,613 been returned to it by HME. This  is a reference to Capital FZE, an offshore company owned by Hassan Nawaz Sharif. Copies of documents certified by Jazbel Free Zone contain an employment letter of Nawaz Sharif and an employment contract of Nawaz Sharif with Capital FZE.

This leads JIT to conclude that Respondent No. 1had direct, indirect , overt and covert association with businesses and entities not declared in Pakistan.

Gifts by Respondent No.7 to Respondent No.1

From 2001, Respondent No.1 was receiving gifts and remittances from his son and his business entity named HME from Saudi Arabia. Respondent No. 1 received Euro 1.267 million and US $10.148 million from Respondent No. 7. Scrutiny of Respondent No.1’s bank record show a substantial amount was donate to PML(N) in 2013.

Contrary to the statements of Respondent No. 7 which attributed annual cash flows and retained earnings from HME as source of funds, the supporting evidence (HME cash and profit statement) is neither the cash flows nor the retained financial position. While Respondent No.7 declared the remittances to his father as “gifts”, the remittances included payments from the accounts of HME; a business entity as opposed to Respondent No. 7 personally.

The evidence brought on record by the Respondents is selective, incomplete, partial and inconclusive. If SIDF loan agreements are taken on face value, Respondent No.7 did not produce evidence establishing his personal capacity of meeting the SAR 90.4 million equity requirement as his share in the sale proceeds of Al Aziza.

FLAGSHIP INVESTMENTS LIMITED

The significant question to be answered is where did money from Flagship Investment Ltd and other companies set up by Respondent No.8 come from and where did the working capital for such companies come from?

The analysis is based on JIT’s own sources as well as information available publically. It is imperative to highlight that information submitted by respondents was found to be severely lacking.

DICHOTOMIES WITH REGARD TO SOURCES OF FUNDS

Respondents in the CMA had stated that the funds came from the investment made from  the Al-Thani family in Qatar. However in the statements before the JIT, Hassan Nawaz said he requested Hussain Nawaz for the funds and he did not know where he got them. Respondent No. 7 denied ever being approached by Respondent No. 8 in this regard.

The dichotomies of the stances taken before the JIT clearly indicates the story of the utilization of Qatari funds is prima facie false and concocted.

Through tables showing movement of funds (inflow and outflow) of Respondent No. 8, it is evident that Respondent No. 8 has extended more funds in the shape of loans to his companies in the UK, and to Chaudhary Sugar Mills in Pakistan than were available to him after accounting for his claim of proceeds from Qatar. Another important factor is that the aggregate loss of the known UK Company of Respondent No. 8 is GBP 10, 551, 540. Despite such heavy losses, Respondent No. 8 managed to erect an empire of real estate assets in UK through the conduit of numerous small size companies that require minimal regulatory reporting disclosures.

JIT investigated the 9 known companies of Respondent No. 8 as well his known properties in the UK which were owned/mortgaged by him or his companies and found more than 20 such properties. Respondent No. 8 has failed to provide any documentary evidence to justify the sources used to own these properties. As per disclosures given in the financial statements of UK companies, Respondent No.8 was not drawing any salary from these companies. Hence Respondent No. 8 had no known means of income to fund these investments in real estate.

Hassan Nawaz also indulged heavily in inter-corporate movement of capital amongst his companies wherein links of two offshore British Virgin Island companies are established as minority share holders of two of his companies (Quint Eaton Place 2 Ltd and Quint Ltd). These BVI companies forwarded funds to UK companies. Respondent 8 was asked to explain this linkage but responded by denying the liabilities outstanding towards the BVI companies, which is contradictory to the financial position given in the accounts of the companies.

Quint Paddington Ltd received funds from Capital FZE, an offshore company in UAE owned by Respondent No.8. Hassan Nawaz claimed that the UAE Company had dissolved and had no association with any family member, yet JIT found that it remained functional till 2014 and it ostensibly was being managed by Mian Nawaz Sharif as Chairman of the Board.

Another company by the name of Hilltern International Limited emerged in 2014 and provided funds to Flagship investment Ltd. Respondent No.8 could not give explanation of the funding and denied ownership of the company.

The financial for Quint Ltd and Quint Eaton show a fee payable to M. Safdar yet Respondent No. 8 failed to mention it. M. Safdar and Maryam Nawaz simply distanced themselves from the business transactions of Resp.8.

Furthermore the financials of Chaudhry Sugar Mills disclose a loan in 2010 from Hassan Nawaz of PKR 87,348,466. No evidence is available for the said loan’s repayment to Respondent No. 8.

Hassan Nawaz’s case is made weaker when JIT analyzed the long list of identified bank accounts for which he refused to provide any documents to justify the reported funds movements in the financial return of his companies. Continuous revolving of funds by Resp.

8 amongst his UK companies clearly reveals that the purpose of formation for these companies with insignificant paid up capital was

  • To evade the disclosure requirements for companies in UK,
  • To give an impression that the real estate empire was built owing to the successful business
  • Revolve funds inside and outside UK through his companies instead of his personal accounts to escape any probability of legal actions in case of legal proceedings
  • To camouflage real origin of funds and mix it with real businesses to layer the real transactions. It is incomprehensible as to how any person can manage to establish such a huge business empire comprising of such expensive properties with minimum equity and has continually been occurring

FINANCIALS OF FLAGSHIPS LTD

Flagships Investment Ltd was established by Hassan Nawaz in 2001 with a paid-up capital GBP 1 only. The beginning of the company is based on a loan given by Respondent No. 8 amounting to GBP 705,071, which Respondent No. 8 has referred to as proceeds from Qatar that has not been supported by any evidence.

From financial statements, it is evident that Flagships Investment Ltd. mainly relied on loans from Hassan Nawaz. The total amount of funds injected by him amount to GBP 3,282,007 with closing net position of loan at 2016 to be GBP 1972279. Respondent No. 8 did not provide evidence of the source of funds through which he made such hefty amount of continuous loaning to Flagship Investment Limited. Moreover Flagship Investment Ltd. was incurring losses which aggregated to the tune of GBP 12684,920.  If a  company does not make profit, it is unlikely to be continued but not only did Flagship Investments Ltd. remain existent but it also mortgaged at least 10 prime properties in the UK. Respondent No. 8 failed to provide any evidence for how these properties were bought or sold.

CONCLUSION

The network of companies being established and dissolved over time appears to have been designed to camouflage the activities of Hassan Nawaz and his companies as well as to create a smoke screen in the way of discovering unaccounted wealth, the purchase of properties in the UK and amassing of wealth and properties. JIT found a significant amount of money being moved discreetly and continuously. The respondents have  not  collaborated with the JIT and have at every opportunity delayed producing evidence. It is not fathomable that documentation of transactions and large purchases entering millions  of sterling are not available and that these transactions were executed on the basis of  verbal and mutual understanding.

Respondent No. 8 has failed to provide any documentary evidence or motive behind revolving funds in companies which are incurring losses on a consistent basis. A pattern of incorporating loss making companies for revolving funds and then subsequently being dissolved is observed.

Multiple transactions with other associated companies of Flagship Invesment Ltd, which involved huge amounts of money, was carried out to layer the flow of funds so that the real source of funds and its utilization could not be easily identified.

NAB CASES

The Honorable Supreme Court ordered that the JIT may examine the evidence already available with NAB and FIA relating to or having nexus with the possession or acquisition of aforesaid flats. Some cases originally initiated by defunct Ehtesab Bureau after the creation of NAB in 1999 were then transferred to it, which were subsequently processed by NAB. Some cases were initiated by NAB on its own and the same were referred to FIA for investigation and preparation for references under NAO 1999. Similarly FIA and SECP also conducted cases against Respondent No.1 and his family and their business concerns.

32 cases received by NAB, FIA and SECP have been thoroughly examined by JIT.

1) ONGOING CASES SINCE 1999-2000

JIT found 8 investigations under process since 1999-2000 and after 18 years they are still pending and no serious efforts are taken to finalize those outstanding cases on merit. These include a 1999 case on Nawaz Sharif regarding misuse of authority in illegal appointments in FIA; he allegedly misused his authority. In 2000, 69 million share equity in the financial statement of Hudabiya Engineering company is unexplained. There are at least eight more NAB cases concerning unexplained purchases by Sharif family and of having means above their income.

The Sharif family went into appeal in 6 cases from time to time.

  • Quashed/ Acquitted cases of NAB: NAB had filed 4 reference before the Accountability Courts, trials of only one reference where Nawaz Sharif was sentenced to 14 years and a fine of Rs. 20 million and disqualified to hold office for 20 years. He was acquitted in LHC in 2009.
  • Rest of three references never went to proper trial by Accountability Courts, with the reason being that Nawaz Sharif and family was sent to Saudi Arabia and those references were adjourned sine die. 3 separate write petitions were opened in LHC for quashment of those
  • Writ petitions were heard by 2 member bench of LHC. All of them were split decision and a referee judge was referred who stated that the case should be squashed and NAB not be allowed to

Similarly, investigations into Sharif family by FIA and Nab have been quashed at least 15 times.

RECOMMENDATIONS BY JIT

JIT recommends taking action where:

  1. NAB inquiries were delayed and are still under process after 17-18 years
  2. No investigation by NAB despite availability of record
  3. Where despite strong grounds, no appeal before SC
  4. Case closed without proper justification

Acquisition of London Properties is a case going on for 17-18 years. Case had been abnormally delayed by successive NAB authorities. Not a single evidence related to Avenfield properties has been collected. Now sufficient material has come one record with direct nexus with the NAB investigations. JIT recommended that NAB complete investigation without delay.

Due to new information coming to light, JIT recommended investigation be resumed in the 2000 case of acquisition of land through coercion, 2000 misuse of funds of Zia council case, Sharif trust investigation 2000, 69 million Rs unaccounted for in Hudaibiya Mills case and State v Nawaz Sharif and Saif ur Rehman.

There are several cases investigated by FIA which are quashed by Lahore High Court. LHC only discussed the jurisdiction of FIA regarding conducting investigations into matters of foreign currency accounts of private individuals. Since cases are linked with Hudaibiya  mills case on which new info has come to light, JIT recommends these cases be opened.

Scrutiny of record shows that investigation related to Chaudhry Sugar Mills was closed by Officers of SECP in connivance with each other and with mala fide intentions. The matter was covered up by officers of SECP and investigation was shown to have closed in back dates. JIT is of the opinion that matter related to Chaudhry Sugar Mill was since closed by SECP prematurely with mala fide intentions thus recommends reopening of the case. Investigation under S 63 of the Companies Ordinance was initiated by SECP against Chaudhry Sugar Mills. The Company did not provide complete record and investigation was abruptly closed in 2016 with back dates of 2013.

Conclusion

Due to new information uncovered by the Panama Papers and the JIT, the various NAB and FIA cases which had been quashed or delayed must be reopened and reinvestigated. SECP has illegally covered up investigations into Chaudhry Sugar Mills and should initiate investigation again.

HUDABIYA MILLS CASE

 

EVIDENCE BY JIT

During its investigation into NAB and FIA cases, JIT uncovered new evidence. New bank accounts were found on the name of Mr. Mukhar Hussain, an employee of Ittefaq Group, and three bank accounts of Saeed Ahmed, a close confidante of Ishaq Dar. The movement of funds in these accounts is linked to several fictitious fraudulently opened accounts for the purpose of money laundering. Funds to the tune of US $2,238,333 were deposited in the two accounts and transferred to the accounts of Musa Ghani and Talat Masud Qazi. Out of total outflow outside the country, an amount of total US $3.907 million was sent to UK. Aside from USD 0.350 million sent to Shamrock Consulting Corporation, JIT discovered USD 3.557 million sent to various companies and individuals in London from 1993-1995.

ISSUE

Since its inception in 1991, various fictitious and fraudulent foreign currency accounts were opened and loans were obtained with deposits therein used for the benefit of business concerns namely: Hudaibiya Paper Mills (HPM), Engineering, Chaudhry Sugar, Hamza Board Mills. Finally, the unwinding of intricate loan structure set up by Respondent Number 10 was completed in 1998 whereby the entire remaining proceeds amounting to 712 million ended up in Hudaibiya Paper and Hudaibiya Engineering as advance against share subscription. Since 1998 both companies have not issued shares against the advance. There is no claim whatsoever by any person against the companies demanding issuance of share certificates against the advance or return thereof. This indicates that Qazi family transferring huge funds are not the actual depositors and the real depositors intended to keep identities hidden.

In audited accounts of HPM, it was discovered that an amount outstanding to Rs.310.23 million on account of liabilities to assets payable to Al-Towfeek was settled and converted into a long term loan. The accounts do not disclose the identity of the lender who provided this loan to the company for adjustment of settlement. The status of the loan remains unchanged.

If the statements of the Respondent is correct that the USD 8 million was paid by Al-Thani due to investment by Mian Muhammad Sharif, than the accounts of HPM should have reflected a loan from the directors, which it did not, instead showing a long term loan by an undisclosed lender.

On account of new evidence, JIT recommends that all 3 cases be fit to be reopened and brought to trial again on basis of new additional evidence. Mr. Saeed Ahmad and Javed Kiyani’s name be added to the accused list.

Mr. Javed Kiyani assisted in opening of Fictitious Current Accounts (FCA), remitting funds into these accounts. Ishaq Darr submitted an affidavit under oath for the money laundering carried out by him through Benami Acts for the Sharif family. In his confessional statement, he admitted that he had been handling money affairs of the Sharif family and alleged Nawaz Sharif and Shahbaz Sharif were involved in money laundering worth at least USD 14.886 Mln. Naeem Mahmood, director of Hajeveri Mordoba, opened several benamidar accounts in various banks, on instructions of Ishaq Darr.

During 1992, Javed Kiyani started transferring money from different accounts abroad into Benami FCAs opened at HBAZ. Funds of significant account were issued in these FCAs and some were deposited in the fictitious accounts of the Qazi family. Ishaq Darr opened false accounts on the names of Qazi family members on instructions of Nawaz Sharif. These FCAs were operated by Ishaq Darr and Naeem Mahmood on instructions of Nawaz Sharif and were used for transfer of FCY funds for Nawaz Sharif abroad for purchase of offshore companies.

JIT then collected a long line of transactions of funds from these FCAs to accounts abroad. According to a Rehman Malik report filed by petitioners, Hans Rudolf (direct contact of Nawaz Sharif) registered Shamrock Consulting Corporation (an offshore company) in BVI having  authorized  capital  of  USD  5000  in  May  1992.  Funds  amounting  $350000  were transferred from Shamrock’s bank account to Rudolph’s. However, when Rehman Malik appeared before JIT, he said the information was provided by a source and there was no documentary evidence available except a couple of documents he handed over to General Amjab, the then chairman of NAB. General Amjad however denied this. This leads the JIT to conclude that Rehman Malik is a highly unreliable witness.

In 1998, equity of $6.67 million was transferred to HPM through a resident in the Middle East. US $6.9 million were transferred to HPM through Qazi family in garb of investment. The sources of these funds are unexplained for.

ASSETS BEYOND MEANS

The JIT has based its analysis on:

  • Income/Wealth Statements,
  • Company information,
  • Bank account details of individuals,
  • Family settlement documents
  • Return of personal

The Honorable Supreme Court asked JIT to collect evidence, if any, showing if the Respondent No. 1 or any of his dependents or benamidars, owns, possess or has acquired any assets or any interests disproportionate to means of income. New evidence uncovered by JIT proves that:

  • Confirmation of beneficial ownership of Maryam Nawaz of Nescoll and Nielson
  • Chairmanship of Nawaz Sharif in offshore company FZE Capital, UAE by JAFZA
  • Fictitious sale/purchase agreements submitted to HC by respondents
  • Confirmation of tampered objects such as Trust agreement

Children of Respondent No.1 were students with no independent source of income of their own when Respondent No.1 entered politics; the company owned by Nawaz Sharif experienced an exceptional growth in income and wealth. Assets grew geometrically but tax income of Respondent No.1 shows otherwise.

1) NAWAZ SHARIF

Records show that Nawas Sharif (NS) started filing returns from year 1983-84. Investigation of JIT shows that NS opened 5 PKR bank accounts and 3 Foreign Currency accounts in four different banks during the period from 1-7-2009 till date. He mentions his occupation as self-employed and business Chaudhry Sugar Mills. He received annual salary from CSML on a monthly basis, contrary to his publicly held stance that he had no role or involvement in family business. JIT investigation has uncovered that NS was chairman of the board of the offshore company Capital FZE and was drawing a salary from there too.

The facts provided by Sharif family shows that Respondent No. 1 had confined his role to that of an equity holder in the family business, who does not hold any formal position and  is not the director of any board. However, it is evident that he is enjoying pecuniary benefits, other than dividends in the shape of unexplained inflows in his personal bank accounts, through the business profits of his sons and gifts.

The evidence collected prove that he in fact was chairman of the board of Capital FZE. This fact was not disclosed in his tax returns or fillings before the Election Commission of Pakistan. As per claims of NS, his wealth is based on inherited wealth of his father, who owned millions of rupees in the 1970s. The financial analysis of MMS does not explain this claim. An anomaly of opening of benami accounts in the name of Qazi family and source of inflow in these accounts was not clarified by the Respondents.

A detailed analysis of financial details of Sharif family’s companies with SECP reflects serious dichotomies in declaring their assets. Respondent No.1 built assets and declares them on the name of his children, however there is no plausible source of income with Respondent No. 1 and his children.

Another hike is seen in Sharif assets after their return to power in 2008. Funds were shifted from UK/UAE empires to Pakistan in the form of gifts in excess of Rs. 880 million. Substantial funds were transferred into the accounts of Resp. 1 in the form of gifts from Hussain Nawaz, taking advantage of tax emption of foreign gifts. Massive assets were built while showing the cost as nil based on gifts. The Respondents have failed to substantiate their sources of income behind these gifts abroad when compared with the account  details of their companies. It is observed that their companies were in loss and not in a position to give gifts.The JIT concludes that Respondent No. 1 is in possession of Assets beyond known means of income.

2) MIAN MUHAMMAD SHARIF

His wealth started to increase in the late 1980s and 1990s. The wealth of MMS multiplied 4.3 times in the year 1992 from Rs. 7.53 million to Rs. 32.15 million by Rs. 8.5 million in 1995. Sources of income were not available to justify the increase in wealth. Analysis of his companies’ profile reflecting his source of income is not commensurate with the increase in wealth. A sharp increase in assets is seen from 1993 onwards. Having analyzed his economic growth and available source of income, JIT concludes that Mian  Muhammad Sharif possessed assets beyond known means of income.

c) MARYAM SAFDAR

Accumulation of Maryam Safdar’s assets show a drastic hike in early 1990’s with no declared source of income. Analysis of financial details of her assets and records of FBR reflects dichotomies of misdeclaration of assets which are tantamount to hiding of assets and tax evasion. Maryam Safdar declared ownership of a BMW car claimed to be gifted by UAE royal family. Rs. 3.5 million was paid by her as custom duty without any known means of income. The car was sold at Rs 28 million, showing increase in her wealth; however the same increase was reflected in later years as well.

Not only are the assets observed to be accumulated without known means of income but she has been observing loaning millions of rupees without any substantial evidence of source of income.

d) HUSSAIN NAWAZ SHARIF

His assets multiplied 10 times in 1992, from Rs. 3.3 million to Rs. 33 million, however, his income was nil. Accumulation of Hussain Nawaz’s assets shows a drastic hike in 1992 and then again in 1997 with no visible increase in income. He failed to provide any details in this regard despite repeated requests. JIT believes that the buildup of assets was through irregular means and Hussain Nawaz was used as a proxy to build family assets. Analysis of his financial details of his assets and record of FBR show various dichotomies of misdeclaration of assets which are tantamount to hiding of assets and tax evasion. JIT concludes that Hussain Nawaz possessed assets beyond known means of income.

e) HASSAN NAWAZ

Accumulation of Hassan Nawaz’s assets shows a drastic hike in 1992 and then again in 1997 with no visible increase in income. He failed to provide any details in this regard despite repeated requests. JIT believes that the buildup of assets was through irregular means and Hassan Nawaz was used as a proxy to build family assets. Analysis of his financial details of his assets and record of FBR show various dichotomies of  misdeclaration of assets which are tantamount to hiding of assets and tax evasion.

His companies’ annual financial position reflect that the companies were operating in losses; despite this, he managed to build an empire of UK assets and sent loans to Sharif companies in Pakistan, which is not explainable. Sources of these funds were not provided by the respondents despite repeated requests.

.JIT concludes that Hussain Nawaz possessed assets beyond known means of income.

f) ASMA NAWAZ DARR

It cannot be ascertained from where assets worth Rs. 1.47 million in year 1991 were acquired by Asma as declared by Nawaz Sharif in his Return of Wealth Tax. It seems like an attempt to hide assets and move money. Assets owned by Asma Nawaz grew 21.7 times in the year 1992/93 without any visible source. In 2000, CSML was incurring losses of Rs. 131 million yet Asma Nawaz received dividends worth Rs. 1,128,000. This cannot be justified as a company in loss cannot provide to its shareholders.

g)  MUHAMMAD ISHAQ DARR

Ishaq Darr did not file income tax returns from 1981/2, which is prima facie amounting to tax evasion.

An exorbitant increase in his assets has been found in 2008/2009 for which sources of funds were not furnished despite repeated requests. Analysis of his financial details of his assets and record of FBR show various dichotomies of misdeclaration of assets which are tantamount to hiding of assets and tax evasion. Respondent No. 10 invested GBP 5.5 million in BARAQ Holdings in UAE. Sources of these funds were not made visible despite repeated requests. Out of these funds, GBP 4.97 million were given to him by his son. He gave a substantial amount of funds to charity (Rs. 169.2 million). Major chunk of charity was given to his own organization and keeping his funds within his own access. These donations were mentioned in his personal expenses in his wealth statements. Thus availing tax exemption on them is prima facie tantamount to tax evasion.

Analysis of his assets and FBR records reflect that Ishaq Darr possessed assets beyond known means of income. Other individuals stated to have assets beyond known means: Kalsoom Nawaz and Mr. Safdar.


BARRISTER MUHAMMAD AHMAD PANSOTA

(Advocate High Court)

MISS. AMNA KHAN

(Student, LUMS)

AHMED & PANSOTA

(Advocates & Legal Consultants)

20-Sir Ganga Ram Mansions, The-Mall, Lahore


DICLAIMER


This document is merely a summary of the Joint Investigation Report dated 10
th July 2017, formed by the Honorable Supreme Court of Pakistan in Panama Case. The summary has been prepared with a view to highlight the essence of the report and the document in no way reflects the views of anyone at Ahmed & Pansota.


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