Senate Panel Uncovers Rs110 Billion Solar Import Fraud
ISLAMABAD: A Senate sub-committee investigating financial misconduct has exposed a staggering Rs110 billion fraud involving over-invoicing and money laundering under the guise of solar panel imports. More than 80 companies, including several dummy entities, have been implicated in the scandal.
Chaired by Senator Mohsin Aziz, the sub-committee of the Senate Standing Committee on Finance vowed to pursue the matter rigorously and hold those responsible accountable. The committee also criticized the State Bank of Pakistan (SBP) for not fully cooperating in providing essential data for the investigation.
Massive Over-Invoicing and Suspicious Transactions
Officials from the Federal Board of Revenue (FBR) revealed alarming instances of trade-based money laundering and financial misrepresentation through inflated invoices. One case involved a company that falsely claimed its owner was a salaried individual, despite importing solar panels worth Rs2.29 billion and reporting sales of over Rs2.58 billion.
According to the FBR, approximately Rs106 billion was transferred abroad for solar imports, with Rs69 billion identified as over-invoicing. A total of 80 companies were flagged for suspicious transactions, 63 of which accounted for the bulk of the financial discrepancies.
In response, the FBR has registered 13 First Information Reports (FIRs) against the accused companies. Investigations identified businesses such as Bright Star, Moonlight, Asadullah Enterprises, and Smart Impex as key players in the over-invoicing scheme.
Fraudulent Transactions and Identity Misuse
Further scrutiny revealed that numerous individuals had misused identity cards to facilitate fraudulent transactions. One person deposited Rs14 million into a bank account but later denied any involvement, while another claimed he had never handled such a large sum of money.
Bright Star was specifically highlighted as a company that exaggerated the cost of imported solar panels and sold them at significantly lower rates in the local market, reinforcing concerns about financial malpractice.
International Money Transfers and Suspicious Banking Activities
The investigation uncovered that while solar panels were sourced from China, financial transactions were also routed to ten other countries, with Rs18 billion transferred abroad under questionable circumstances. The Senate panel called for further scrutiny of these transfers.
Banking representatives testified that Bright Star and Moonlight had conducted multiple high-value transactions. Bright Star alone processed Rs185 million across four cash deposits, while Moonlight handled Rs49 million through two transactions. Following these findings, banks issued suspicious transaction reports in accordance with anti-money laundering regulations.
In another shocking case, Smart Impex, a company with a declared paid-up capital of just Rs2,000, managed to deposit Rs1.54 billion in cash, with total deposits exceeding Rs3.39 billion.
Next Steps in the Investigation
The Senate committee expressed concerns over the SBP’s delayed response in providing relevant data, despite repeated requests. However, the deputy governor of SBP assured the panel that all necessary information on solar imports would be presented at the next meeting.
The investigation is ongoing, with further inquiries scheduled to determine the full extent of financial misconduct and ensure accountability for those involved.
