The National Accountability Bureau of Pakistan seizes foreign accounts linked to the top executives of Bahria Town and his spouse in Mauritius, intensifying a broader inquiry into the diversion of funds through offshore routes and illegal use of government land.
KARACHI: The National Accountability Bureau (NAB), Pakistan’s top body in fighting corruption, has taken its operations beyond the national border to pursue Bahria Town. The National Accountability Bureau has frozen $4.5 million that was kept in foreign bank accounts that are connected to the CEO of Bahria Town and his wife, in connection with the NAB Bahria Town money laundering probe.
The way the NAB Bahria Town money laundering case came into Mauritius
This particular NAB money laundering case not only has implications for the Pakistani economy but goes far beyond the country’s jurisdiction. As mentioned by the National Accountability Bureau, there are accounts in Mauritius that have been attached in connection with the investigations. It means that the investigation has become one of international criminal finance. NAB has attached these accounts in connection with an investigation involving allegations of laundering of funds from the Bahria Town housing project into foreign territories.
Additionally, the case involves accusations regarding misuse of state land, which has been a long-standing accusation against the development of big residential complexes in Pakistan, as opponents claim that such projects take advantage of their political influence to obtain cheap land either without proper permissions or at discounted prices. The investigation by NAB into the Bahria Town case brings together both elements.
Denials by Malik Riaz
The founder of Bahria Town, Malik Riaz Hussain, who is among the leading figures in the real estate sector of Pakistan in terms of political influence, dismisses all the allegations outright. In previous instances, he has dismissed the investigations against him as being politically motivated and described his financial difficulties as part of an orchestrated campaign against him, as opposed to a process meant to bring him to account.
A trend of high-profile investigations into real estate developments
One such investigation is that into the NAB Bahria Town money laundering allegations, which is part of a wider trend of measures being taken to ensure accountability in the real estate development sector in Pakistan, which for many years has been considered by financial watchdogs as susceptible to money laundering because of its cash-intense and poorly documented operations. The reason for this is because Bahria Town controls some of the biggest private housing schemes in the cities of Karachi, Lahore, and Islamabad.
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Implications of the Mauritius attachment
By attaching accounts in a Mauritian financial institution, NAB has taken a step further in its investigation into money laundering at the Bahria Town branch of the NAB Bank. The fact is that Mauritius serves as an important offshore banking hub for South Asia and provides mechanisms which have been employed by South Asian investors in a legal manner, though, according to Pakistani regulators, these structures may also be used for laundering funds generated domestically. The fact that the attachment was successful implies that the NAB has collected enough evidence to persuade local authorities to accept their request.
Where do we go from here in the NAB Bahria Town matter?
It is at this stage that the investigation into the money laundering charges against NAB Bahria Town becomes crucial. While freezing the foreign bank accounts does provide a legally binding hold on the assets in question, turning that seizure into an actual recovery would necessitate lengthy legal battles through several courts in different jurisdictions. It is likely that the legal representatives of Malik Riaz will challenge the seizure in Pakistan and in Mauritius.
