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Islamabad: A Senate subcommittee on Finance has unearthed a staggering multi-billion-rupee corruption scandal tied to solar panel imports. The investigation revealed massive over-invoicing and dubious transactions amounting to Rs160 billion, with the involvement of major companies and prominent financial institutions.
The subcommittee of the Senate Standing Committee on Finance, under the chairmanship of Senator Mohsin Aziz, has mandated a comprehensive audit of all solar panel imports dating back to 2018. The investigation revealed irregularities, notably involving two companies—Star Business Solution and Moonlight, both located in Peshawar—which emerged as key participants in the scandal.
Transactions Exceeding Legal Limits
Documentation revealed that selected organizations circumvented legal requirements for an annual transaction limit of Rs20 million by arranging money exchanges ranging from Rs2 billion to Rs5 billion in a single fiscal year. According to reviews, Bright Star and Moonlight maintained functioning accounts at Dubai Islamic Bank branches in Dubai and Askari Bank branches in Lahore, allowing them to conduct highly balanced suspicious large-scale transactions.
Bright Star created its account on August 3, 2018, with Rab and Zainab Nawaz listed as account holders, but began conducting business activities within three days. The business entity handled a total of Rs2.7 billion in transactions in 2018, increasing to Rs5 billion in 2019 before declining to Rs1.5 billion in 2020 and Rs3 billion in 2021, for a final value of Rs2.5 billion in 2022. Moonlight reported total revenues of Rs7.9 billion, including considerable cash transactions.
Over-Invoicing and Money Laundering Allegations
According to officials, import charges from illegal solar panel companies ranged from $0.35 to $0.70 per watt, even though genuine manufacturing costs in China might be as low as $0.15 per watt. The financial crime investigation team at Post Clearance Audit (PCA) South identified a large Rs106 billion money laundering scam involving bogus solar panel imports. Two brothers, allegedly the masterminds, used a network of seven shell companies in Lahore and Peshawar to launder billions. These companies exhibited economic power beyond their reported wealth of Rs119 million by depositing Rs42 billion in cash in several banks.
Both the Financial Monitoring Unit and the Federal Board of Revenue reported cash-based suspicious transactions totaling Rs46 billion. Despite the FMU’s assertion that Currency Transaction Reports (CTRs) are not suspicious on their own, many Suspicious Transaction Reports (STRs) were sent to enforcement bodies as a result of their investigations.
Senate Subcommittee’s Concerns
Senator Mohsin Aziz raised serious questions about the FBR’s failure to detect these irregularities. “How were these companies allowed to process transactions worth billions without oversight? Where was the FBR when these suspicious activities occurred?” he asked.
Senator Aziz also criticized the financial institutions involved, pointing out that daily transaction limits of Rs2 million were repeatedly bypassed. “Despite triggering CTRs, there appears to have been no meaningful enforcement action,” he said.
The Senate committee demanded a comprehensive investigation into the involvement of the implicated entities, specifically Dubai Islamic Bank, Askari Bank, and the relevant regulatory authorities. It underscored the necessity for more stringent enforcement measures and enhanced accountability to avert the recurrence of similar controversies in the future.
This corruption scandal highlights the necessity for more stringent financial regulations, improved monitoring systems, and prompt measures against transgressors to protect the nation’s economic interests.
