A Customs investigation has uncovered the illegal import of 71,815 internet routers worth Rs3.269 billion through two fake companies, with the consignments cleared without the mandatory approval of the Pakistan Telecommunication Authority (PTA).
The findings are part of a 39-page report sent by Collector of Customs Karachi Airport Sadia Shiraz to the Secretary Enforcement at the Federal Board of Revenue (FBR). The report states that the imports, made through the Air Freight Unit, were also used for trade-based money laundering.
According to the report, M/s Muslim Sons Enterprises and M/s Mosani Syndicate were paper companies registered in the names of front men. Influential operators allegedly used them as market IDs. Investigators found no office at the declared addresses. One address turned out to be a rice and flour shop, and the other a rented residential house.
The two firms used their WeBOC user IDs from 5,715 different IP addresses, of which 1,048 were common to both. Customs said this showed a single group was running both companies. Their sales tax returns were also filed within minutes of each other.
A review of financial records and income tax returns showed that the companies imported routers worth Rs3.269 billion, including duties and taxes, and transferred Rs2.1 billion abroad. Their owners’ combined initial capital was only Rs2.2 million, putting the import cost at 42 times their capital.
The routers were supplied by 12 foreign suppliers, including M/s AK Sons Trading Company, and sold to 108 local buyers. Of the Rs2.9 billion in local sales, only a nominal amount of sales tax was paid in cash. Many of the sales were shown to blacklisted, suspended or inactive buyers, or to companies in unrelated sectors such as human resources and personal services.
The report also identified 10 consignments of routers imported without PTA type approval under the same companies. In addition, the firms under-invoiced goods by Rs1.3 billion in total. In one case, they declared routers at Rs97 million, against a value of Rs565 million assessed by Customs.
Customs officials said that when they refused to clear the goods or allow illegal auction or manual delivery, people linked to the companies tried to pressure them through financial inducements, influence and threats.
One individual allegedly threatened officers with serious consequences and a smear campaign on social media through phone calls and voice notes. The report adds that a campaign against the officers was also run through social media podcasters.
Citing violations of the Anti-Money Laundering Act, the Customs Collectorate has recommended a joint investigation team comprising the National Accountability Bureau (NAB), the Federal Investigation Agency (FIA), Inland Revenue and Customs Intelligence.
It has also recommended suspending the companies’ WeBOC user IDs and National Tax Numbers (NTNs), and referring the case to RTO-II Karachi for sales tax and income tax proceedings. Attempts to contact the two companies for comment drew no response.
