IFAP Newsletter May 2015

www.ifap.org.pk
LETTERNEWS
The Forensic Accountant (FA)The Forensic Accountant (FA)
Monthly May 2015
The Founder/Pioneer Member of the International Federation of Forensic Accountants & Auditors (The IFFAA)The Founder/Pioneer Member of the International Federation of Forensic Accountants & Auditors (The IFFAA)
The Newsletter for Forensic Accounting Professionals
(Official Organ of the Institute of Forensic Accountants of Pakistan (IFAP)
President Communication
Dear Professional Colleagues,
“
I am not bound to win, but I am
bound to be true. I am not bound to
succeed, but I am bound to live by the
light that I have. I must stand with
anybody that stands right, and stand with
him while he is right, and part with him
when he goes wrong.” (Abraham
Lincoln).
Standing of a profession does not lie merely in technical
competency of its practitioners but also in their ethical
conduct. As forensic accounting and governance
professionals, we must serve the broader interest of the
stakeholders and contribute towards promoting a culture
of good governance. We must have a quest for holistic
professional growth, explore new horizon and aspire for a
higher degree of professionalism, which is beyond mere
fulfilment of the legal requirements. It is also pertinent to
consider that when upholding the values of righteousness,
one may even face setbacks and adversaries; however,
what is right should not be forgotten for what is
convenient.
The Institute of Forensic Accountants of Pakistan (IFAP) has
a great responsibility towards the development and
regulation of the profession; where members play a
crucial role by regulating their own actions. Being forensic
accounting and governance professionals, we must
essentially ensure self-governance so that we are able to
strike a right balance between conflicting demands and
rising expectations of the stakeholders.
Forensic accounting has risen to prominence because of
increased financial frauds popularly known as white collar
crimes. Forensic accounting can be described as a
specialized field of accountancy which investigates fraud
and analyze financial information to be used in legal
proceedings. Forensic accounting uses accounting,
auditing, and investigative skills to conduct investigations
into theft and fraud. It encompasses both Litigation
Support and Investigative Accounting. Forensic audit can
be defined as an examination of evidence regarding an
assertion to determine its correspondence to established
criteria carried out in a manner suitable to the court.
Objectives of Forensic Accounting and Forensic Auditing
 To use the Forensic Accountant's (FA's)
conclusions to facilitate a settlement, claim, or
jury award by reducing the financial component
as area of continuing debate.
 To avoid fraud and theft.
 To restore the downgraded public confidence.
 To formulate and establish a comprehensive
corporate governance policy.
 To create a positive work environment.
A Forensic Accountant (FA) can ensure the integrity and
transparency of financial statements by actively
investigating for fraud, identifying areas of risk and
associated fraud symptoms and a good fraud prevention
program can help to create a positive working
environment where employees do not indulge themselves
to abuse their responsibilities. So, by helping companies to
prevent and detect fraud the Forensic Accountants (FAs)
can help to establish a comprehensive corporate
governance policy. Forensic Accountants (FAs) can
support the propagation of the required information
about governance and ethics policies to interested
parties within and outside the organization. In this way they
can help to maintain a good image of their respective
companies to its stakeholders and also build up effective
communication process and transparency. The fraud
prevention strategy outlines a high level plan on how the
organization will go about implementing its fraud
prevention policy. An effective fraud risk management
approach encompasses controls that have three
objectives: (1) Prevent (2) Detect (3) Respond.
FA Barrister Sohail Nawaz
(President – IFAP)
May 31, 2015

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The Founder/Pioneer Member of the International Federation of Forensic Accountants & Auditors (The IFFAA) Newsletter
IFAP News (www.ifap.org.pk)
Members Meeting/Members Get Together (IFAP Members Lahore Based)
The First Meeting/Get Together of the members of the Northern Region/Lahore Region of the Institute
of Forensic Accountants of Pakistan (IFAP) was held on May 23, 2015 at 3.00 P. M. at Seminar Room
No.3, Level 3, Arfa Software Technology Park, 346-B, Ferozpur Road, Lahore. The quorum of the
meeting being present, the Chairman Mr. Irtaza Hashmat Shami on behalf of the Northern Regional
Committee (NRC) welcomed the members and declared the meeting to be in order to proceed with
the agenda. The President IFAP Barrister Sohail Nawaz in his opening remarks welcomed the
participants and appreciated the efforts of the IFAP Lahore Members, specially the Chairman of the
Northern Regional Committee Mr. Irtaza Hashmat Shami, for their contribution in organizing the
meeting/get together. The President IFAP specified that Members Meeting/Get Together was a
leading event of the Institute and provided an outstanding platform for sharing knowledge &
experience among the Forensic Accounting and Forensic Auditing Professionals.
The meeting was attended by the following members/participants.
1. Barrister Sohail Nawaz (FFA) (President – IFAP)
2. Dr. Tahir Iqbal (FFA) (Secretary – IFAP)
3. Mr. Irtaza Hashmat Shami (AFA) (Chairman Northern Committee – IFAP)
4. Syed Manzar Abbas Kazmi (AFA)
5. Mr. Aamir Amin Butt (AFA) (Regional Director Lahore – IFAP)
6. Mr. Tariq Parvaiz Khan (AFA)
7. Mirza Muhammad Zafar Baig (AFA)
8. Mr. Muhammad Masood Afzal (AFA)
9. Hira Maqsood (AFA)
10. Mr. Ilyas Ahmad Farooqi (AFA)
11. Mr. Muhammad Azam Shahzad (AFA)

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1&2. Role of IFAP and its Members
The President IFAP Barrister Sohail Nawaz in his opening remarks welcomed the
participants and appreciated the efforts of the IFAP Lahore Members, specially
the Chairman of the Northern Regional Committee Mr. Irtaza Hashmat Shami,
for their contribution in organizing the meeting/get together. The
President IFAP specified that Members Meeting was a leading event of the
Institute and provided an outstanding platform for sharing knowledge &
experience among the Forensic Accounting and Forensic Auditing
Professionals. The President IFAP highlighted the very affective role being
played by IFAP in the country and outside the country as a Professional Institute in the fields of Forensic
Accounting and Forensic Auditing. He further stated that IFAP members had become an integral part
and IFAP was firmed to support them in their endeavors. He further confirmed that the Members
Meeting/Get Together would now be an annual and semiannual event where forensic accounting
and forensic auditing professionals will explore and thrash out solutions to meet the challenges.
The Secretary IFAP Dr. Tahir Iqbal reviewed of appropriate skills required by
Forensic Accountants (FAs) empirical evidence from a developing economy
like Pakistan. Due to the growing complexities of business environment and the
growing number of Business related investigations, Forensic accounting
professionals are in a great demand now a days as they are increasingly asked
to assist in the investigation of financial and business related issues of fraud
cases. On account of global competition, the accounting profession must
convince the marketplace that it has the best equipped professionals to
perform such services. In the backdrop of increasing levels of frauds, the
demand for Forensic Accountants (FAs) is bound to substantially increase in the
future. So, it is beyond doubt that the role of Forensic Accountant (FA) is an immediate requirement
in Pakistani Scenario to prevent the further loss due to the hidden frauds in corporate world, public

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accounting and awareness of government in future. Hence, proper attention is required by the
regulators, Government and the educational Institutes to support Forensic accounting.
Mr. Irtaza Hashmat Shami – Chairman of the Northern Regional Committee shared the activities and
events in Lahore which are planned for the whole year to engage the forensic accounting and
forensic auditing professionals. He restated the importance for the Pakistani Forensic Accountants
(FAs) to network with other Professional Institutes and this meeting/get together was only the start for
other events in future. He highlighted that Forensic Accounting and Forensic Auditing is a dynamic,
challenging and rewarding profession. All the countries have their own forensic accounting and
Forensic Auditing Institutes/associations which regulates the quality and quantity of the professionals in
this field. A Forensic Accountant (FA) is one who is specialized in forensic accounting, forensic
auditing, fraud examination and forensic investigation. He also serves as a forensic accounting
management and corporate governance caretaker.
Mirza Muhammad Zafar Baig, an Esteemed Fellow Member and Business Development
Consultant explained the working of IFAP and his vision for Pakistan’s progress. A Forensic Accountant
(FA) plays an effective role in the development of economy and progress of the country. He
highlighted that poor Corporate Governance (CG) is a leading factor in poor performance,
manipulated financial reports, and unhappy stakeholders. Corporations and regulatory bodies are
now trying to analyze and correct any existing defects in their reporting system. In the current
reporting environment, Forensic Accountants (FAs) are in great demand for their accounting,
auditing, legal, and investigative skills. Forensic Accountants (FAs) are positioned to explore the design
of Corporate Governance (CG) systems, the role of the financial reporting system in Corporate
Governance (CG), the effect of the governance board on employee and managerial behavior, and
the efficacy of the internal control systems.

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Mr. Aamir Amin Butt, IFAP Regional Director has called upon the Forensic Accountants (FAs) to play a
proactive role in eradicating corruption at all levels. He spoke about the importance of Forensic
Accountants/Forensic Auditors (FAs) in a changing economic scenario. He advised the Forensic
Accountants FAs) to involve themselves in social audits at all levels, including forensic audit of the
political system and judiciary in order to ensure that wastage and pilferage is minimized. He reiterated
that corruption can only be minimized only if the forensic audit is made mandatory by the
Government for all the public sector organizations, corporate entities, private business corporations
and industries. Forensic Accountants (FAs) are currently in great demand with the public need for
honesty, fairness and transparency in reporting increasing exponentially.
Mr. Tariq Parvaiz Khan, an Esteemed Associate Member, explicated that
the Forensic accounting is the specialty practice area of accounting that
describes engagements that result from actual or anticipated dispute or
litigation. It provides an accounting analysis that is sustainable to the court
which will form the basis for discussion, debate and ultimately dispute
resolution. While certainly ideal for court testimony, in broad terms, 'forensic', is
about fact finding and interpretation. The increase in number of fraud and
fraudulent activities in Pakistan and around the world has emphasized the
need for forensic accounting. Engagements of Forensic Accountants (FAs) on criminal matters
typically arise as the aftermath of fraud. Fraud examination in forensic accounting is different from
that of 'traditional accounting' because the Forensic Accountant (FA) has the intuitive ability to
analyze fraud. The role of forensic accounting in fraud investigations and litigation support and proffer
suggestions that will, hopefully, bring to public awareness the importance of this area of accounting.
Mr. Muhammad Masood Afzal, an Esteemed Associate Member, illuminated
the role of a Forensic Accountants (FAs) in today’s business climate. With the
ever-changing business climate, we are seeing an evolving role for
the Forensic Accountant (FA). Going beyond investigative accounting,
our role is expanding into a broader, multidisciplinary profession that surpasses
a basic understanding of financial records, International Financial Reporting
Standards (IFRS) and Generally Accepted Accounting Principles
(GAAP). Forensic Accountants (FAs) must investigate and analyze a situation
and may even be called as an expert witness during a trial. In addition, we are seeing the need for
proficiency in not only accounting and finance, but also expert valuation, statistics, computer
technology and legal processes. The role of a Forensic Accountant (FA) can be crucial in helping to
obtain a beneficial outcome in a settlement or in the courtroom.
Mr. Muhammad Azam Shahzad, an Esteemed Associate Member, emphasized
the role of a Forensic Accountants (FAs) in a Courtroom Environment. Forensic
Accountants (FAs) specialize in sniffing out financial crime, which means that
many of them spend a great deal of time in the courtroom. Depending on
whose side the accountant's on, that could change that courtroom role
significantly. Forensic Accountants (FAs) are trained to follow the money--going
through financial records to determine how the money came in, and where it
went.

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Mr. Ilyas Ahmad Farooqi, an Esteemed Associate Member, described the
role of Forensic Accountants FAs) in Prosecution and Defense. Forensic
Accountants (FAs) are not in on the investigation, they may be called
upon as expert witnesses to back up the prosecution's case against a
defendant charged with a financial crime. Forensic Accountants
(FAs) testifying on behalf of the prosecution may help explain to a jury
how certain financial crimes are carried out or interpret financial findings
to bolster the prosecution's case. Attorneys for defendants charged with
financial crimes or fraud need to refute the prosecution's evidence, and
that can mean fighting fire with fire. Defense teams may then call their
own expert witnesses to offer alternate theories or interpretations of the evidence presented.
Hira Maqsood, an Esteemed Associate Member, described the role of Forensic Accountants (FAs) in
Litigation. Attorneys can use Forensic Accountants (FAs) to assist in translating complex financial issues
into a more understandable manner. Frequently, these financial issues are a key factor in the ultimate
outcome of the lawsuit. In today’s computerized society, the attorney’s deployment of Forensic
Accountants (FAs) to inquire, identify, investigate, test, examine, analyze and interpret financial
documents and data is required more than ever before. The Forensic Accountant (FA) is proficient at
investigating, identifying and analyzing financial information, in conjunction with determining the
people associated with the case, in an effort to follow the money. Ultimately, the financial forensic
results could uncover hidden assets, identify unreported income, determine lost profits, or aid the
attorney in whatever specific financial issues the case requires.

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Syed Manzar Abbas Kazmi, an Esteemed Associate Member, defined the
relevance of forensic accounting education in financial reporting. The relevance
of Forensic Education in the field of Accounting Services via: Litigation support,
Expert witnessing and Fraud examination. Data was analyzed using the Liken
scale and secondary data through the use of text books, journal articles and
internet materials were heavily relied upon. The most important course
objectives in Forensic education which include-fraud detection, investigation
and prevention, fraud prevention and identification of Internal control of firms
and providing education on pervasiveness of and the causes of fraud and
while-collar crime were reviewed.
3&4. IFAP Syllabus & Exemption Policy
The Members discussed about the current/existing syllabus/course outlines and exemption
policy/criteria with the IFAP’s Executive Council for academic and professional qualification holders.
After discussion, the members unanimously decided and advised the IFAP’s Executive Council to
follow and implement the current syllabus and exemption Policy for the next one year (Year 2016).
Currently, the Forensic Accountant (FA) program is divided into four stages with 21 subjects of study or
Awarding of membership of Forensic Accountant (FA) Program requires completion of Twenty One
(21) compulsory subjects/papers. The Forensic Accountant (FA) Program is divided into four stages
comprised 21 papers: Foundation Stage comprised 5 papers, Certificate Stage comprised 5 papers,
Professional Stage Group I comprised 5 papers and Professional Stage Group II comprised 6
papers. Exemptions are available for professional qualifications holders as well as for graduates and
masters in commerce and business administration and other disciplines with related subjects.
Candidates with prior academic and professional qualifications are eligible to get
waivers/exemptions from certain subjects of the Forensic Accountant (FA) Program on case to case
basis.

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5&6. CPD/CPE
The members discussed about CPD/CPE requirements for IFAP’s members. IFAP must takes care of
their needs of professional development and interest. IFAP arranges seminars, workshops,
conferences, corporate trainings, short courses and other activities as part of Continuing Professional
Development/Continuing Professional Education (CPD/CPE) to constantly update the professional add
value to their professional information and knowledge of its members and add value to their
professional standing and capabilities. Members also have opportunities for inter-action with the elite
community of Forensic Accountants (FAs) at national level, access to special studies and information,
participation in branch committees/chapters meetings and other avenues of professional
development. IFAP is in the process of further expanding its services to members. All members of the
Institute are required to engage in a program of CPD/CPE in accordance with the provisions of
the CPD/CPE Regulations set by the IFAP’s Executive Council. The members unanimously proposed
and recommended the names of Mr. Aamir Amin Butt and Mr. irtaza Hashmant Shami as
trainers/facilitators for arranging and conducting CPD/CPE seminars, workshops and corporate
trainings in Lahore. Both Members shown their keen interest and offered consent for the same. The
formal appointment letters shall be notified and issued to both members later on. Approved.
7. Board of Studies
The Members discussed and shared their views about formation of IFAP’ Board of Studies. The
members unanimously decided and advised to the IFAP’s Executive Council to establish the Board of
Studies, nominate its members, and define their roles and duties for the same. The Board of studies
shall be consisted 6 members, 3 from Lahore region and 3 from IFAP’s Executive Council. The names
and designations of Members of Board of Studies shall be notified and circulated later on. Approved.
8. IFAP’s Members Directory
It was discussed and decided unanimously in the meeting to compose, design and publish
updated IFAP’s members directory annually basis including complete requisites of all members.
Approved.
9&10. IFAP’s Liaison/Branch Office
It was discussed and decided in the meeting to set up/open a IFAP’s Liaison/Branch Office in Lahore
(Northern Region) for career counselling, coaching, training and providing necessary information to
prospective students and members about Forensic Accountant (FA) Program. IFAP’s Liaison/Branch
Office is being established for the convenience of local residents and the people of
Lahore region. The office is located on Main Feroze Road to facilitate FA aspirants, parents, members
and educational institutions and will serve to nurture young talent by providing information about the
premier forensic accounting qualification of Pakistan. The IFAP President, Barrister Sohail Nawaz said
that the Institute decided to explore this opportunity for the privilege of its valued members, students
and the profession of Forensic Accounting, and to broaden IFAP’s existing network of members and
students. The members unanimously proposed and recommended the name of Mirza Muhammad
Zafar Baig as Executive Director/Liaison Officer for running and administrating the day to day business
affairs of Lahore Office. Mirza Muhammad Zafar Baig shown his keen interest and offered consent for
the same. The formal appointment letter shall be notified and issued to him later on. Approved.

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11. Statutory Recognition
It was discussed and decided in IFAP’s members meeting to follow up applications already filed for
recognition process and approach to SECP, FBR, NAB and HEC for getting statutory recognition.
Approved.
12. Publish Newsletter/ Journal
It was discussed and decided in the Members meeting that The Institute of Forensic Accountants of
Pakistan (IFAP) encourages the students to adopt a continuous learning process by providing Forensic
Accountant (FA), a monthly Newsletter already published by Institute covering contemporary articles
and latest developments in the
area of Forensic Accounting,
Forensic Auditing, Forensic
Investigation, Fraud Examination
and its allied subjects. It was
further discussed and decided in
the meeting that a quarterly
Journal under the same name
and title should be issued
by IFAP for enhance/disseminate
members’ knowledge and
education. Approved.
13. MOUs/MRAs
It was discussed and decided in
the members meeting
that IFAP contacts regularly and
maintains synergy relationships
with the existing professional
partners/associates. It was further discussed and decided to contact with national/local professional
Institute/Bodies for attaining statutory recognition and to make and sign MOUs/MRAs for the same.
Approved.
14. Others Matters
The others matters discussed in the members meeting with permission of Chair are as follows:-
a. To appoint Mr. Irtaza Hashmat Shami as IFAP’s Executive Director Punjab instead of Mr. Saqib Aziz.
b. To appoint IFAP’s regional directors under the supervision of new IFAP’s Executive Director Punjab.
c. To open and set up IFAP’s chapter/Regional Offices in Karachi, Multan, Faisalabad, Quetta,
Peshawar and Muzaffarabad.
d. To arrange recommended syllabus books/study notes and provide to the IFAP’s students and
members on actual price.
e. To contact and visit different public and private Universities recognized by HEC for promotion and
development of IFAP.
f. To arrange and conduct get together/meeting with Technocrats, Professionals, Bankers, Judges
and Lawyers for promotion and development of IFAP.

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g. To introduce, launch and implement of IFAP’s Group Exemption and Membership Scheme for
professionals and working Executives.
h. To contact and visit different Chambers, Stock Exchanges and Business Houses for promotion and
development of IFAP.
i. To arrange and conduct get together/meeting of IFAP’s members based at
Islamabad/Rawalpindi in month of Ramzan or after Eid-ul-Fiter.
j. To design and frame rules & regulations for fellow membership and criteria for issuance of COPs.
k. To contact and visit Chartered Accountants Firms/Cost & Management Accountants Firms for
promotion and development of IFAP.
l. To set up/establish IFAP’s Board of Directors and to appoint Members for the same.
m. To form/establish Forensic Accounting Research Foundation (FARF) for promotion and
development of forensic accounting education.
The Members/participants discussed potential opportunities which may possibly be materialized and
how the current challenges can be mitigated with the constrained resources available and further
support of IFAP. They also discussed other important matters including coordination with local
professional bodies, funding strategy and budget, members’ profiling, Institute’s website and other
profession related matters. The IFAP’s Lahore Members thanked Barrister Sohail Nawaz and Dr. Tahir
Iqbal for the opportunity to discuss matters of mutual interest and for the continued support extended
by IFAP. The meeting was followed by Lunch hosted by Mr. Irtaza Hashmat Shami the Chairman of the
Northern Regional Committee.
Budget Proposal for 2015-2016
By Sheikh Jamal Yousuf AFA
Income tax
1. The taxation for services rendered by individuals and AOP is very much complex as the tax deducted
is minimum tax either reduce the rate of income tax deduction on services or change the tax
deducted from minimum tax to final tax regime at the existing rate.
2. Introduce a system of reporting and reconciliation of data by tax payer of all his expenses against
with he will be given a rebate against his tax liability. Bound all retailers to issue receipt on dot matrix
paper and not the thermal paper on which the writing evaporates. This will help to generate revenue
for the government. The invoice issued by the retailers should mention his NTN and STRN against which
a tax payer can report and upload his purchasing.
3. Amend Section 122 Amendment of assessment and allow opening the last two years of tax return filed
by the tax payer, and that also within 120 days of filing of the return but before the end of financial
year in which the return is filed. The sword for opening the assessment for the last five year us very
painful and causes harassment to a tax payer and haunts him to get registered in income tax. The
government needs to win the hearts of tax payer by creating win environment and not discourage
them. Facilitate tax payer to earn their trust.
4. Penalties for not filing of withholding statement are very much on the higher side. Exemption should be
given to neither tax payers who do not have any business nor any payments on which tax has to be
deducted.

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5. Upload income tax return within time and preferably after the end of financial year to facilitate tax
payers return are upload late overloading the server and problem for tax payer to file the return as
number of times due to login in of number of filers the server hang or times out.
6. A person filing his return should instantly be updated on the Active Tax payer list and all other
departments of the government as recent instance shows that a person filing his return on time is not
updated on the excise and taxation department when he applies for car registration.
7. A very genuine problem when two new people form a private limited company NTN of the company
is not granted to them because they do not have NTN themselves they cannot apply for NTN as
salary employees because the company does not have any NTN. How to deal with this issue calling
PRAL you never get a solution as they are unaware of the situation. Now if the director does not have
NTN company does not get NTN. Representatives at PRAL suggest applying for NTN of director in
other category and when company gets the NTN apply for change in particulars of the director.
8. The request for revision of income tax return is required to be approved by the Commissioner of
Income tax introduced vide Finance Act 2013 having prospective impact but if a person wants to
revise his return for tax year before 2013 that is also not being approved. The amendment is being
used against a tax payer and he is dependent on the Commissioner for any change even if he falls
under final tax regime where tax paid is treated as full and final settlement. Please withdraw the
amendment.
9. Introduce a system of allowing extension to taxpayer by charging a fee from the taxpayer introducing
slab rate system for extension sought by tax payer.
10. Provide immunity from audit to tax payer whose pay 25% more income tax from last year tax liability.
11. Allow rebate to individuals against tax liability who invest in any mode of Islamic Financing to promote
Islamic Financing facilities in the country.
12. Allow rebate to individuals purchasing locally assembled cars against their income tax liability to
promote local industry.
Sales Tax
1. Biggest problem is getting sales tax registration as the system is centralized and all handling is done
from CRO Islamabad with PRAL acting as intermediary between the applicant and CRO.
2. The online system of registration is designed in such a way that an applicant cannot upload
documents as using and setting for active X is not easy and user friendly.
3. It has become very much hard for people to obtain registration especially for STRN. The system of
online attaching documents is designed in such a way so that applicant is dependent on PRAL
officers at RTO to submit their documents.
4. In the past Securities and Exchange Commission of Pakistan (SECP) introduced the online filing facility
and complete registration process is done online. SECP allows to attached PDF files which is very
much convenient and user friendly. In case of any objection or observation are directly sent to the
applicant and he is allowed to attach the documents himself instead of going to SECP for uploading
the document.

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5. In case of PRAL the applicant gets objections through email he has to give the documents at PRAL
office for uploading the documents without any acknowledgement by the PRAL officer. Now if the
officer does not upload the documents what can the applicant do as he has no acknowledgement
for submission of the documents?
Problems that an applicant normally face
1. In case of commercial importer other than a place owned by a tax payer or rented place the CRO
ask for ownership documents of the person whose premises is being used if a tax payer provides
evidence of ownership in the form of property tax paid or CVT challan the application is rejected. If
you sent an email to the esupport@pral.com.pk they reject your application and the reason they give
is that it is cancelled by the system. There is no audit trail for the applicant to check what the status of
the application is. Applicant should be allowed to upload document themselves instead of going to
PRAL. In case of objections a window should open and applicant can resolve the query himself
directly.
2. In case of manufacturing units applying for sales tax registration In Karachi K-electric provides only
one electricity meter on one sub-lease. If person has one acre plot in any industrial area and he gives
it on rent to four tenants only one of the tenant will get sales tax registration and the others will be
rejected as they do not own an electricity meter now what can a tax payer do as it is inherent
problem as only one meter is allowed on one sub lease and sub meter is not accepted by CRO for
sales tax registration.
The suggestions for government to enhance its revenue are
1. Grant immediate sales tax registration to Commercial Importer as commercial importer pay complete
sales tax at the import stage along with value addition tax. They are not allowed any refund so what’s
the loss to the government.
2. Grant immediate registration to all sales tax applicants who are not allowed any refund or input
against their input like CNG station.
3. Charge fee for registration in sales tax category wise.
4. For manufacturing dis allow the input whose evidence is not produced at the time of registration like
electricity , telephone etc. (Manufacturing units may run on alternative energy) at least grant
registration to move forward with revenue generation rejecting applications only discourages a tax
payer and promotes the culture of corruption in FBR.
5. The revision of sales tax return for a tax period is very cumbersome exercise and all depends on the
approval by Commissioner of Inland Revenue services. If a taxpayer applies for revision charges a
nominal fee and allow him revision of the return.
Corporate Law (Companies Ordinance 1984)
1. Make the SECP e-services website compatible will all latest browsers and operating system and do not
restrict it to Internet explorer only.
2. Please amend the COMPANIES (APPOINTMENT OF LEGAL ADVISERS) ACT, 1974 and allow advocates
to represent more than 3 companies delete the limit of 3 companies and also increase the
remuneration from Rs.1,200 to at least Rs.2,500/- per month.

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Covering Articles
Forensic Accounting—Past, Present, & Future
By Michael Brown CPA, CFE
The field of Forensic Accounting continues to grow rapidly from its origins in ancient Greek, Egyptian,
and Roman times as the gatekeepers over asset (e.g., gold, grain, and livestock) control and fraud
detection. Modern era forensic accounting has its roots in an 1817 Canadian court case Meyer v
Sefton, which is the earliest cited example of an accountant acting as an expert witness in North
America. Forensic Accountants (FAs) also owe a special thanks to Sherlock Holmes, the fictional
detective of the late 19th and early 20th century who helped put “deductive reasoning” on the map.
It wasn’t until 1946 that the term Forensic Accounting was coined by Maurice Peloubet, a leading 20th
century accountant in his article “Forensic Accounting—It’s Place in Today’s Economy.”
There is a great misconception today of what Forensic Accountants (FAs) actually do. Let’s first clarify
some things: we do not dig up dead people’s tax returns, and we do not make great lovers just
because we are good with figures. Though accountants have long been the butt of bean-counter
jokes, Forensic Accountants (FAs) get a lot of respect because of their perceived roles in the
numerous publicized financial scandals of the last forty years. In fact, the modern day Forensic
Accountant (FA) is part accountant, part lawyer, and part investigator (if not also part psychologist).
History of Forensic Accounting
A little more history: the word forensic is a derivative of the Latin word forensic, meaning belonging to
the forum, which was ancient Rome’s site for public debate. Forensic means relating to the use of
science or technology in the investigation and establishment of facts or evidence in a court of law.
Thus, forensic testimony or forensic medicine is used to assist the court or the attorneys in resolution of
legal issues, including assistance at trial. The integration of accounting, auditing, and investigative skills
yields the specialty known as Forensic Accounting. Modern day Forensic Accounting can be defined
as using financial knowledge and skill in conjunction with investigative techniques to resolve a matter
in a legally defensible manner exacting to the specifications of the law.
Forensic Accountants (FAs) are hired to investigate, analyze, interpret, summarize, and present
complex financial information. Normally, accountants, especially Chartered Certified Forensic
Accountants (CCFAs) act like watchdogs; a forensic accountant is trained to act more like an FBI
Special Agent with a FA designation. We are taught to look beyond the numbers and to assist with the
protection and/or recovery of assets. Personal attributes of a Forensic Accountant (FA) include
curiosity, persistence, creativity, organizational skills, self-confidence, and sound professional
judgment.
Modern Day Scandals
As the business world has grown and become more complex, including the prevalence of accrual
basis accounting, financial reporting issues became a top priority and interest in determining true
financial results has become even more paramount. The 1970s witnessed massive financial disclosure
problems at companies such as Lockheed and Penn Central, which created a furor that blamed
financial accounting irregularities on cozy relationships between corporate boards and independent

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auditors. The 1980s gave us massive problems with, among others, the savings and loan industry, E.F.
Hutton, and Drexel Burnham Lambert, Inc. The 1990s saw an increase in the speed of financial
communications, putting significant pressure on companies and individuals for the content and timing
of financial information. The 1990’s also brought about a tremendous increase in the availability of
twenty-four hour news, bringing the courtroom (including the bizarre low speed car chase of O.J.
Simpson) to the viewing public. Recently, major scandals in such companies as Enron, WorldCom,
HealthSouth, and Adelphia reminded us that fraudsters have not quit and gone home.
Some of the scandals cited above involved issues such as, by way of example and not exhaustion,
insider trading, overstating restructuring charges (creating a buffer with which to meet future Wall
Street earnings estimates), using acquisition accounting to overstate future earnings, over-accruing
charges such as loan losses or sales returns in good times (to use to smooth earnings in bad times),
recognizing sales before completion, and deferring expenses to improve reported results. The
watchdogs responsible for this governance failed, and the Forensic Accountants (FAs) were called in.
The U.S. House and Senate passed the Sarbanes-Oxley Act in 2002, which required public companies
to have a financially literate Audit Committee composed from their Board of Directors, and
established enhanced auditing, quality control, and independence standards.
M&K Forensic Services
Forensic work is not only practiced on Wall Street and comprised of scandals screaming through
headlined national news articles. Investigative accounting performed by M&K encompass services
such as shareholder and partner disputes, asset tracing and recovery, damage and lost profit
analyses, reconstruction of books and records, bankruptcy proceedings, professional liability claims,
matrimonial disputes, tax investigation and dispute resolution, and other types of litigation consulting.
The objectives of a forensic assignment take the form of preparing findings regarding the truthfulness
of representations, the analysis of specific financial transactions or account balances, and analyzing
disclosure issues against accounting and auditing standards and principles. The engagements are
often non-recurring, the scope is specific, and the objective is to affix responsibility. Frequently, the
context of the relationship is adversarial. In the course of performing this type of work, Forensic
Accountants (FAs) may gain access to documentary evidence through subpoenas, search warrants,
and consent of the parties.
Documentary Evidence
Sometimes it is difficult to immediately ascertain the relevance of documents, so it is essential for
documents to be controlled, organized, and updated (much like maintaining a database system).
Documentary evidence has always been the cornerstone in litigation matters. When collecting
evidence, we obtain original documents when feasible, make working copies for review, and store
the originals in a segregated and protected manner. We do not touch originals any more than
necessary. Initially, it is important to avoid getting bogged down in details so as not to lose sight of the
big picture: Documents do not make cases, but they provide significant corroborative evidence for
testifying witnesses, as well as serve to impeach the credibility of witnesses, if required.

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Organizational Techniques
Sound organizational techniques for managing documents include classifying evidence by witness,
transaction, chronological order, and/or key document files. If feasible, the database should be
implemented early in the case. We suggest you commence chronologies as soon as possible to
establish a chain of events leading to the ultimate findings of liability and damages, as well as
identifying the proof required to make the case. It should be noted that making chronologies too
comprehensive may defeat the purpose and hinder the efficiency and progress of the investigation.
Update To Do lists frequently, maintain a cumulative record of actions performed, and document
short and long-term objectives. The ability to summarize significant items and events in a succinct
manner will aid in the overall efficiency of the examination, as well as enhance communication and
persuasion. It is imperative to master these core competencies in order to provide a complete and
comprehensive analysis.
Electronic Detection
Electronic detection has broadened the potential for legal discovery and has become a popular
mechanism to locate, secure and search for documentary evidence. Most documents today are
created using electronic media encompassing word processing, electronic spreadsheets, emails, and
proprietary computer applications. The nature of digital data makes it well-suited to investigation. The
legal community has caught on quickly to the advantages of electronic discovery. It is now common
to have lawyers seek the production of entire computer drives where necessary, as well as cell
phones, personal digital devices, etc. Once data is collected, you will likely require the use of
electronic evidence data discovery software to aid in, among other tasks, classifying, analyzing,
reviewing, and presenting the documentation and data obtained. No matter how big or small the
matter, electronic evidence may often be organized and presented in a lead/summary spreadsheet
for ease of communication and forcefulness of persuasion. There are a number of excellent products
on the market to assist in reviewing documents, annotating, redacting, integrating, bates numbering,
and producing the data for other relevant parties.
Conclusion
As you can readily see, over time the definition of Forensic Accounting has gradually changed from
merely preventing theft, to testifying in court, to the creation of the modern day investigative
accountant. History tends to repeat itself and the need to effectively and efficiently respond to
scandals and disputes will continue to surely grow in the 21st century. Have fun in your quest for truth,
justice, and the forensic way! Though the truth may not set you or your client free, it may set back your
adversary for a tidy sum.
Forensic Accountant (FA) Knowledge, Skills and Abilities
By Majid Latif Bhatti-AFA
Forensic Accountant (FA) is different from Fraud examiner and Financial/traditional auditors. Timing,
Scope, opinion and methodology of conducting audit are different. The Traditional Accountant looks
at the number and Forensic Accountant (FA) is looks behind the numbers. The Forensic Accountant’s

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(FA’s) professional goal is to whether the allegation are responsible based on the financial evidence
and, if so, the financial impact of the allegation. Many of the aspects of Forensic Accountant (FA) fall
outside the traditional education, training, and experience of auditors and accountant. The following
skills, abilities, and/or knowledge are necessary to serve as an effective Forensic Accountant (FA).
a. Ability to identify fraud with minimal initial information.
Many times, the fraud investigation begins with minimal knowledge of the specific of a potential
fraud.
b. Interviewing
Throughout the course of seeking evidence and information, the Forensic accountant (FA) becomes
involved in interviewing.
c. Mindset
One of the critical success factors of Forensic Accountant (FA), and one of the hardest to define of
measure, is mid set. A successful Forensic Accountant (FA) has certain mind-set that includes several
abilities. He or she is able to think like crook. This attribute is basically counter to the average auditor
who has lived a life with integrity and believes strongly in honesty.
d. Knowledge of evidence
The Forensic Accountant (FA) must understand what constitutes evidence, the meaning of the “best”
and “primary” evidence, and form that various accounting summaries can take to consolidate the
financial evidence in a way that acceptable to the court. It is imperative that a Forensic Accountant
(FA) understand the rules of evidence in the court and how to conduct the investigation from the
beginning as if all evidence will make it to a court of law. If these rules are ignored, evidence could be
compromised and found inadmissible if it does get to court.
e. Presentation of Finding
The Forensic Accountant (FA) must have the ability to clearly communicate the finding resulting from
the investigation in a fashion understandable to the layperson. The presentation can be oral or written
and include the appropriate demonstrative aids. The role of Forensic Accountant (FA) in witness box is
the final test of finding in public forum. By its nature, however, accounting and financial information is
difficult for the averages person to comprehend. Therefore, the Forensic Accountant (FA) as an expert
witness must have above-average communication skill in distilling financial information in a manner
that the average citizen can understand, comprehend, and assess to reach a sound conclusion.
f. Knowledge of Investigative techniques
When the issues have been identified, it is imperative that further information and documentation be
acquired to obtain further evidence to assist in either supporting or refuting the allegation or claim. It is
a question of knowing not only where the relevant financial documentation exist but also the
intricacies of GAAP, financial statement disclosure, and system of internal control, and being aware of
the human element involved in fraud.

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g. Investigative Skills
Forensic Accountant (FA) usually apply investigative skills at the appropriate time during the course of
their investigation. For example, in dealing with criminals matters, the primary concern is to develop
evidence around motive, opportunities, and benefits. Of equal concern is that the benefit of doubt is
given to the other side to ensure that proper interpretations are given to the transactions. Other
concerns, such as the question of method of operation and the issue of economic risk, must also be
addressed. Similarly, investigative skills are needed in litigation support. The Forensic Accountant (FA)
must ensure that: a proper foundation exists for the calculation of the future lost profits; all assumptions
incorporated in to work product are recognized and identified; he understands his limitations as an
expert; and the issue of mitigation of damages is considered.
h. Investigating mentality
Along with their accounting knowledge, Forensic Accountant (FA) develop and investigative
mentality that allow them to go beyond the bounds set out in either GAAP or GAAS. The following
three tenets in Forensic Accounting driven by the necessity to prove intent in court in order to prove
there was a fraud. The investigative mentality develop in the search for the best evidence, for
competent and sufficient evidence, for forensic evidence, for example:
 Scope in not restricted as result of materiality, often especially in the early stage of a
management/employee fraud, the transactions are small and accordingly are most easily conveyed
to the court to show a pattern of conduct that is deceitful. As a dollar value of the transactions and
their complexity increase, the ability to convey the essence of the transaction is hampered, and the
Forensic Accountant’s (FA’s) task is made more difficult.
 For the most part, the use of sampling is not acceptable in establishing evidence.
 A critical element of corporate investigations in particular is the assumption of integrity by the
management, both personal statements and its documentation of financial transaction and events.
The investigative mentality is best develop by continue experience as a forensic witness. It is through
this process that the Forensic Accountant’s (FA’s) eye are opened, because counsel for the opposing
side raises and possibilities the accountant may not have considered up to that point. Repeated
experience as a forensic witness creates a grate awareness of what is relevant and must be
considered, so the expert witness can present financial evidence independently and objectively to
reflect the reality of the situation.
i. Identification of financial issues
When Forensic Accountants (FAs) are presented with a situation generated by the complaint,
allegation, rumor, inquiry, or statement of claim, it is important that clearly identify the financial issued
significant to the matter quickly. They base their decision on experience and knowledge, and any
resulting recommendation must reflect both common sense and business reality. For example, if
documents are needed from a foreign jurisdiction, although the most obvious recommendation
would be to obtain these records, it is usually not practical to do so. Other alternatives must be
considered.

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j. Interpretation of financial information
It is usual for a transaction or a series of event to have only one interpretation .The Forensic
Accountant (FA) must be extremely conscious of a natural bias that can exist in the interpretation
process. It is important that transactions be viewed form all aspects to ensure that the ultimate
interpretation of the available information fits with common sense and the test of business reality. A
proper interpretation of information can be assured only when one has looked behind and beyond
the transaction in question without any scope limitations. In particulars, a Forensic Accountant (FA)
who is called as an expert witness must be aware of alternative accounting or financial formulas,
rules, and interpretations.
Importance of Forensic Accounting in Countries of Business
Opacity: A Means to End Fraud
By Barrister Umer Abdullah–FFA, Member Executive Council IFAP
Introduction
When hearing аbουt Enron, Conrad Black, Kimberly Rogers οr WorldCom, one wіll dеfіnіtеlу thіnk
аbουt theft, bribery аnd fraud. The key word here іѕ “fraud”; whеrе many studies hаνе bееn
conducted аbουt thіѕ subject. What іѕ fraud аnd hοw іѕ іt detected аnd dealt wіth, аnd hοw іѕ іt
possible tο bе protected frοm іt? Such qυеѕtіοnѕ аnd thеіr аnѕwеrѕ аrе key terms іn thе domain οf
forensic accounting, ѕіnсе fraud hаѕ played a major role іn thе existence οf accounting, hence
forensic accounting. Understanding fraud іѕ nесеѕѕаrу fοr those whο want tο understand whаt
Forensic Accounting іѕ, hοw іt hаѕ come іntο thе system, hοw іt exactly deals wіth thе issues wе face,
аnd tο whаt degree іt hаѕ hеlреd іn сеrtаіn issues οf fraud, οr even іn strengthening thе accounting
system іn general.
Research hаѕ bееn conducted οn fraud аnd hаѕ bееn given different definitions, аll whісh come іn
line wіth one another. Other researches wеrе done tο highlight thе job οf internal controls іn
minimizing thе chance οf theft οr misappropriation. Hοwеνеr, little research wаѕ done οn forensic
accounting diffusion аnd proper implementation.
Fraud activities hаνе bееn manipulating, stealing, аnd destroying many businesses аnd industries. Tο
face such harmful trends, fraud examination hаѕ bееn сrеаtеd; аnd grеаt efforts hаνе bееn exerted
tο detect, investigate, аnd prevent similar acts frοm encountering. Thеѕе preventions hаνе shed lights
οn an nеw concept аnd practice known аѕ “Forensic Accounting”, whісh hаѕ become a common
notion tο fight against fraud аnd similar unethical acts. No matter hοw much fraud activities increase,
thеrе mυѕt always bе аn anti-fraud scheme tο shield against іt. Tο provide availability οf balance аnd
protection іѕ thе main reason whу Forensic Accounting existed.
Nonetheless, thе legal, supervisory, аnd regulatory systems οf financially corrupted countries сrеаtе
significant opportunities аnd tools fοr thе laundering аnd protection οf thе proceeds οf crime, аnd
allow criminals whο mаkе υѕе οf those systems tο significantly increase thеіr chances tο evade
effective investigation οr punishment. A country’s commitment tο bank secrecy аnd thе absence οf
сеrtаіn key supervisory аnd enforcement mechanisms aimed аt preventing аnd detecting money-

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laundering increase thе possibility that transactions involving thе country’s entities аnd accounts wіll
bе used fοr illegal purposes.
Sіnсе one οf thе mοѕt powerful tools used today іѕ forensic accounting, іt іѕ advantageous tο study іtѕ
possible implementation іn countries wіth business opacity, аnd tο probe thе essential methods
needed tο establish thе implementation οf thіѕ procedure іn different sectors аnd аt many levels.
Therefore, іn order tο achieve thеѕе objectives, thеrе іѕ a need tο investigate thе following research
qυеѕtіοn: “Whаt аrе thе conditions οf possibility fοr implementing Forensic Accounting іn a country
characterized by аn opaque financial sector?” More specifically, thіѕ research hаѕ two objectives:-
i. Tο identify thе best way tο highlight thе importance οf using forensic accounting activity іn order tο
clear thе roads οf thе future οf business activities; bу learning frοm past mistakes such аѕ Enron аnd
WorldCom аnd bу using οthеr cases οf financial fraud similar tο thе international ones.
ii. Tο identify thе way tο diffuse аnd implement forensic accounting аѕ a vital tool thаt, whеn used
professionally, саn greatly hеlр fight against fraud activity.
Moreover, thе gap іѕ that forensic accounting іѕ nοt known іn many countries. Forensic Accounting іѕ
nοt ѕο much spread іn thе world, іt іѕ οnlу known іn USA аnd ѕοmе developed nations. Thе study іѕ
contributed іn finding thе best way tο implement Forensic Accounting especially wіth thе existing
gap, wіth thе objective οf covering іt mainly bесаυѕе іt іѕ ѕο hard tο implement forensic accounting
especially thаt іt іѕ nοt diffused worldwide. Thе objective іѕ tο arrive аt аn аnѕwеr tο thе research
qυеѕtіοn аnd tο ѕhοw hοw forensic accounting саn bе implemented іn thе countries characterized
bу аn opaque financial sector; thе overall aim іѕ tο achieve thіѕ goal.
Literature Review
Different research hаѕ bееn conducted tο define fraud including thе types οf fraud such аѕ thаt οf
Gilbert whο defined “fraud” аѕ: “аn act using deceit such аѕ intentional distortion οf thе truth οf
misrepresentation οr concealment οf a material fact tο gain аn unfair advantage over another іn
order tο secure something οf value οr deprive another οf a right. Fraud іѕ grounds fοr setting aside a
transaction аt thе option οf thе party prejudiced bу іt οr fοr recovery οf dаmаgеѕ.”
Farrell & Healy revealed аbουt fraud thаt іѕ increasing worldwide аnd іѕ becoming more costly tο
businesses еνеrу year аѕ fraudster’s υѕе intricate methods tο commit аnd cover thеіr criminal acts.
Consequences οf fraud саn vary frοm public morality corrosion, weakened faith іn thе organization,
tο loss іn market valuation аnd confidence οf stakeholders.
Wіth thе various definitions attributed tο fraud, οthеr research done highlighted thе importance οf
having internal control thаt wουld limit thе continuous fraudulent behaviors. External audits аrе аlѕο
undertaken tο ensure thаt internally instituted fraud control mechanisms аrе adequate іn scope,
effective іn application аnd complied wіth. Hοwеνеr, іt іѕ quite unfortunate tο note thаt thе
complexity οf thе human brain аnd іtѕ dynamic method οf reasoning hаνе tremendously diversified
present-day scams away frοm thе hitherto known modes οf fraudulent activities thаt now render trυе
corporate governance ideals аlmοѕt unworkable.
It іѕ thus worth mentioning thаt іn аn attempt tο prevent fraud, thе Auditing Standard Board (ASB) іn
2002 issued thе Statements οf Auditing Standard 99 (SAS 99) whісh introduced a “Fraud Triangle”.
Fraud Triangle indicates thаt thе probability οf committing fraud іѕ high іn situations when

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managements οr οthеr employees hаνе incentive οr аrе under financial pressure, thе conditions thаt
provide opportunities fοr management οr employees tο commit fraud exists, οr thе ethical values οr
characteristics thаt cause management οr employees tο rationalize thе fraudulent act exists.
Fraud саn bе detected аnd investigated tο prevent thе possible dаmаgеѕ thе activity саn cause. Sο
whаt advice wουld a Forensic Accountant give tο a company suffering frοm fraud activity? A
professional саn list four things thаt саn bе done tο mitigate thе occurrence οf fraud аnd thеу
include fraud prevention, fraud detection, fraud investigation аnd follow-up legal action οr resolution.
Thе anti-fraud program οf аnу company ѕhουld focus οn аll four.
Thе past two decades hаνе witnessed significant changes іn thе business environment including
globalization, technological advances аnd now wіth reported high-profile financial scandals, ways tο
improve public trust аnd investor confidence іn financial reports. Emerging regulatory, social,
economic, ethical, аnd legal challenges facing thе world οf businesses contribute tο аn increasing
demand fοr Forensic Accounting thаt encourages accounting.
A study done assures thаt thе demand fοr аn interest іn Forensic Accounting wіll continue tο increase
іn thе future аnd more accounting programs аrе being рlаnnеd tο provide Forensic Accounting
education, Thе business community аnd thе accounting profession аrе deeply concerned wіth
reported financial аnd accounting scandals. Hοwеνеr, few tο none research wеrе conducted tο
study thе proper diffusion аnd implementation οf forensic accounting іn thе countries οf opaque
business practices.
Research Framework
Many factors іn a country’s business mechanism contribute tο thе fraudulent behavior іn thе financial
sectors. Fοr instance, being considered аѕ a tax haven country wіth banking secrecy regulations,
money laundry activities аnd low corporate governance, fraudulent activities become easy tο
commit. All οf thіѕ results іn a national wide corruption triggering thе need tο introduce Forensic
Accounting. Hοwеνеr, due tο thе opaque financial nature οf thе country аnd prior tο thе introduction
οf Forensic Accounting, major changes hаѕ tο bе done tο prepare thе country fοr thе diffusion аnd
implementation οf Forensic Accounting οn both thе macro аnd micro levels discussed earlier.
Thе causes fοr corruption οf whісh several exist іn mοѕt corrupted countries аѕ іt wаѕ previously noted,
аrе attributed tο thе absence οf dysfunctional key anti-corruption institutions, thе lack οf awareness
οn corruption, іtѕ causes, consequences аnd thе weak legal framework аnd thе absence οf proper
legal implementation mechanisms. Adding tο thеѕе аrе thе confessional аnd feudal mentalities,
inefficiency οf supervisory bodies, low salaries οf public sector employees, political influences οn thе
judiciary, thе absence οf civic education, foreign interference іn domestic affairs, selective οr lenient
enforcement οf thе law, аnd thе inefficient media. In οthеr words, thе factors contributing tο thе
fraudulent business practices саn bе categorized under four notion; culture, education,
management аnd government аnd legislation. Whether іt іѕ thе lack οf awareness regarding Forensic
Accounting (culture аnd education) аnd thе advantages іt саn bring, corrupt practices οf
management аnd thе inefficiency οf supervisory board οr absence οf a law thаt enforces Forensic
Accounting (government аnd legislation), thе four categories ѕhουld bе tackled tο рυt аn еnd tο thе
continuous fraudulent acts.
Fοr instance, thе lack οf whistle-blower protection laws prevented citizens frοm reporting οn political
corruption іn thе legislature οr οthеr sections οf government. In thе private аnd public sectors, thе lack

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οf аn access tο information law, a whistle-blowers’ protection law, conflict οf interest law аnd οthеr
disclosure аnd transparency mechanisms іѕ a major obstacle tο integrity.
Results аnd Discussion
Thе literature review ехрlаіnеd thе different meaning οf fraud, forensic accounting, аnd thе
characteristics οf аn opaque business country аnd hοw саn Forensic Accounting hеlр іn limiting
fraudulent behavior thаt іѕ mаkіng іt easy fοr money launderers tο continue thеіr illegitimate practices.
Furthermore, Forensic Accounting саn serve аѕ a liberator fοr countries wіth opaque business
practices such Luxembourg, Austria, Lebanon аnd many others, putting аn еnd tο аll thе business
corruption taking рlасе аt thе different sectors οf thе country, bе іt government οr аnу οthеr private
οr public sector. Hοwеνеr, tο reap thе best results οf Forensic Accounting a proper diffusion аnd
implementation process mυѕt take рlасе thаt requires thе work οf thе parties іn a country, bе іt
government itself, people’s view аnd awareness οf Forensic Accounting οn thе cultural basis, thе
companies thаt mυѕt require frοm іtѕ employees tο bе aware οf FA аnd tο еmрlοу Forensic
Accountants (FAs) аѕ well аnd universities аnd οthеr academic institutions thаt bear οn іtѕ ability tο
teach Forensic Accounting.
Countries wіth opaque business practices tend tο share similar characteristics thаt justify thе
prevalence οf fraudulent activities. Aѕ іt wаѕ mentioned earlier, thе factors thаt contribute tο thе
fraudulent behavior іn thе financial sector саn bе categorized under four categories; culture,
government аnd legislation (macro-level), management, аnd education (micro-level).
Thе importance οf adopting forensic accounting іѕ thus highlighted, hοwеνеr, thе process οf
introduction іѕ nοt аn οn thе spot process. On thе contrary, іt requires time аnd effort іn terms οf
shifting cultural awareness tο realize thе importance οf Forensic Accounting. Thаt being ѕаіd, thе
government аѕ a primary facilitator аnd thе educational systems ѕhουld take раrt іn сrеаtіng
awareness аnd shifting cultural mentality towards Forensic Accounting. Managements mυѕt аlѕο
educate employees οn Forensic Accounting аnd tο adopt іt аѕ раrt οf іtѕ system.
Forensic Accounting іn Culture
The Institute of Forensic Accountants of Pakistan (IFAP) conducted a study tο examine thе
acceptance level οf thе public іn Pakistan regarding forensic accounting. Thе study revealed thаt
problems arise frοm thе fact thаt Forensic Accounting service іѕ still nеw tο mοѕt οf thе businesses аnd
even tο thе public іn Pakistan. Thіѕ leads tο confusion аmοng thе public аnd ѕοmе mау even bе
unaware οf thе existence οf thе system. Therefore, thе importance οf thе service іѕ disregarded (goes
unnoticed).
Two variables affect thе acceptance levels οf thе public fοr thе practice οf forensic accounting аѕ
thе main tool іn investigating a company’s account tο detect fraud. Thе variables include thе public’s
understanding level οn forensic accounting functions аnd thе perception regarding thе
implementation οf forensic accounting іn thе investigation. Thе understanding level οf thе public аnd
thе functioning οf forensic accounting wіll determine whether thе public іn Pakistan wіll accept іt аѕ
thе main tool іn investigating a company’s account іn case οf fraud. Thе perception οf thе public οn
thе implementation οf forensic accounting іn thе investigation οf a company’s financial statement
аlѕο determines thе acceptance level οf forensic accounting іn thе country.

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Thіѕ study shows thе importance οf two basic components thаt ѕhουld bе available tο сrеаtе a
ground fοr forensic accounting implementation; thеѕе elements аrе awareness аnd knowledge οf
forensic accounting аѕ аn anti-fraud tool аnd thе perception οf implementing forensic accounting,
whereby thеѕе two elements аrе considered аѕ major factors fοr thе level οf acceptance οf such
tool.
In οthеr words, іf a change іѕ mаdе іn cultures οf financially corrupted аnd opaque business
practices, іt wіll result іn changes іn thе people’s practices, norms, аnd values, hence thеіr behaviors;
аt thе еnd, іt wіll сrеаtе аn awareness аnd knowledge аbουt fraud аnd hοw tο fight іt аnd thе tools
thаt сουld bе used tο inhibit іt. In addition, thіѕ process similarly applies tο forensic accounting.
Forensic Accounting іn Education:
Although thеrе іѕ a growing demand fοr fraud аnd forensic accounting globally, much οf іtѕ
advancement аnd adoption іn thе accounting curriculum іn thе universities аrе taking рlасе іn thе
developed economies. Thе adoption οf forensic accounting іntο thе universities accounting
curriculum hаѕ an hυgе potential tο enhance students’ skills аnd competencies аnd сουld bе used аѕ
a veritable resource frοm whісh fraud сουld bе mitigated.
Many cases reveal thаt those who commit fraud аrе nοt necessarily geniuses οr hаνе a creative
mind. Thеу аrе typical accountants’ whο copy fraud schemes frοm thе past. Therefore, thе
importance οf thе programs fοr fraud prevention/detection education аnd training іѕ emphasized,
аnd thе qυеѕtіοn іѕ raised аbουt whether thе business school аt universities offers enough programs tο
educate accounting аnd auditing professionals fοr fraud prevention/detection.
Forensic Accounting іѕ nοt οnlу restricted tο university programs, thеrе іѕ аlѕο a specialized certificate
thаt іѕ concerned wіth forensic accounting, whісh іѕ thе Diploma іn Investigative & Forensic
Accounting (DIFA) Program offered by the Institute of Forensic Accountants of Pakistan (IFAP). DIFA іѕ
designed tο provide a broad range οf knowledge аnd skills tο carry out financial investigations. Thіѕ
range includes accounting, audit, income tax knowledge, fraud knowledge, knowledge οf law аnd
rules οf evidence, аn investigative mentality аnd critical skepticism, understanding οf psychology аnd
motivation, аnd strong communication skills.
Thе DIFA Program focuses οn knowledge аnd skills thаt саn bе best taught аnd examined іn person:
such аѕ handling a face-tο-face meeting wіth a client, interviewing skills, аnd testifying іn court аѕ аn
expert witness.
In conclusion, thе base οf forensic accounting іѕ a knowledge іn accounting, auditing, internal
controls, risk assessment аnd fraud detection, a basic understanding οf thе legal environment ѕіnсе
thе legal environment іѕ essential іn order tο support thе litigation, acknowledging thеіr competence,
obtaining a diploma specialized іn forensic accounting whісh сουld bе given bу educational
institutions thаt grant certifications such аѕ DIFA. Thеѕе formal certificates саn deepen thе students’
knowledge аnd sharpen thеіr skills іn forensic accounting.
Forensic Accounting іn Management
Poor corporate governance wіll lead a сеrtаіn individual οr a group οf people wіth thе same interest
tο act upon іt tο commit fraudulent activities іn thе company. Thіѕ саn bе reinforced bу thе fact thаt
top-level management ѕhουld follow thе policies οf thе firm, whісh wіll hеlр thе company tο perform
better.

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Even іf a company applies gοοd internal control systems, thе management wіll still bе thе major
factor influencing thе implementation. Companies ѕhουld look towards nеw аррrοасhеѕ rаthеr thаn
follow thе traditional аррrοасh, аѕ forensic accounting mау bе thе next best alternative іn resolving
problems.
Loebbecke аnd Willingham conclude thаt thе probability οf material financial misstatements due tο
fraud іѕ a function οf three factors. Thе factors include thе degree tο whісh those іn authority іn аn
entity hаνе reason tο commit management fraud, thе degree tο whісh conditions allow managerial
fraud tο bе committed, аnd thе extent tο whісh those іn authority hаνе comply tο ethical values thаt
wουld facilitate fraud commitment. Thеѕе three factors ѕhοw thаt thе management сουld simply
commit fraudulent activities ѕіnсе thе public including shareholders аrе unaware οf thе
countermeasure tο bе taken tο prevent financial crimes. It argues thаt thеrе ѕhουld bе a set οf
guidelines сrеаtеd fοr thе public аnd management tο ensure thаt actions ѕhουld bе taken whеn
financial fraudulent activities occur.
Thе main problem οr issue іѕ thе constant misunderstanding οf thе role аnd responsibility οf thе auditor
аѕ thе public expects auditors’ tο detect financial asset misstatement οr even fraudulent activities
frοm thе financial statements. Thіѕ hаѕ bееn thе long perception οf whаt аn auditor’s responsibilities
аrе. Therefore, thіѕ perception ѕhουld bе regenerated аnd corrected. Auditors’ wіth forensic
accounting background wουld bе allotted аѕ Forensic Accountants (FAs) specifically tο investigate
thе company’s financial statement. Thеѕе people wουld bе responsible fοr detecting financial
misstatements. Wіth thе proper education given tο thе public, thіѕ perception οf auditors’ сουld bе
enhanced.
Forensic Accounting іn Government аnd Legislation:
Forensic accounting hаѕ played a major role іn thе improvement οf detection, investigation, аnd
representation οf аll cases аt hand іn law courts іn judicial formalities. If companies wish tο utilize
information regarding a fraudulent activity іn a court of law, thеу mау асqυіrе thе skills οf Forensic
Accountant (FA) bесаυѕе thеу саn handle investigations іn a way thаt іѕ completely acceptable іn a
court οf law.
Forensic accounting іѕ thе specialty practice area οf accountancy thаt dеѕсrіbеѕ engagements
resulting frοm actual οr anticipated disputes οr litigation. “Forensic” means “suitable fοr υѕе іn a court
οf law,” аnd іt іѕ tο thаt standard аnd potential outcome thаt Forensic Accountants (FAs) generally
hаνе tο work. Forensic Accountants (FAs) οftеn hаνе tο give expert evidence аt thе eventual trial.
Forensic accounting ѕhουld bе раrt οf criminal investigation, fοr thе matters relating tο financial
implications whеrе thе report οf Forensic Accountants (FAs) mυѕt bе considered аѕ evidence аnd
proof tο bе presented іn court trials.
Countries thаt established forensic accounting іn thеіr legal system, hаνе Forensic Accountants (FAs)
whο work wіth law enforcement аnd thе district attorney’s office. Jυѕt аѕ wіth οthеr types οf evidence,
thе prosecution obtains search warrants tο locate financial information аnd compel knowledgeable
people tο conduct οr hold interviews аbουt thе situation іn qυеѕtіοn.
Forensic Accountants (FAs) саn аlѕο provide litigation support. Attorneys engage thе services οf
Forensic Accountants (FAs) tο review existing documentation аnd testimony аnd ехрlаіn thеіr
financial significance. A Forensic Accountant (FA) саn tеll thе attorney аbουt thе additional

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information needed tο prove thе case аnd qυеѕtіοnѕ tο аѕk thе witnesses. Thе Forensic Accountant
(FA) mау аlѕο review dаmаgеd reports аnd state whether thе report wаѕ рυt together accurately
аnd supports thе case.
Government agencies lіkе thе NAB, FIA, IB and thе FBR, Internal Revenue Service hаνе Forensic
Accountants (FAs) tο investigate everything frοm money laundering аnd identity-theft-related fraud tο
arson fοr profit аnd tax evasion. Law firms’ οftеn υѕе Forensic Accountants (FAs) tο hеlр divorcees
uncover thеіr exes’ hidden assets.
Conclusion
Thіѕ study/article deals wіth thе importance οf having аn investigative system thаt wουld limit thе
frequent financial frauds аnd business opacity taking рlасе worldwide. In thіѕ context, forensic
accounting hаѕ bееn presented аѕ a tool tο inhibit thе prevailing frauds, money laundry аnd theft.
Hοwеνеr, tο thе reap better results forensic accounting mυѕt bе properly diffused аnd implemented
wіth a grеаt emphasis οn enhancing public (cultural) awareness, attributing a major role tο
managements, education аnd governments/legislation.
Fοr instance, thе public mау bе unaware οf thе significance οf forensic accounting аnd mау lack thе
needed knowledge fοr implementing іt іn investigative matters. Thus, thе need tο incorporate forensic
accounting іn thе culture οf financially corrupted countries іn order tο сrеаtе awareness οf forensic
accounting аѕ аn anti-fraud tool аnd thе means οf implementing іt іn thе investigation οf financial
statements. Thіѕ step саn bе handled bу government аnd legislation аѕ primary facilitators.
Furthermore, thе importance οf adopting forensic accounting іn thе universities’ accounting
curriculum іѕ highlighted especially thаt thе demand fοr іt іѕ increasing gradually. Such adoption hаѕ a
hυgе potential tο enhance students’ skills аnd competencies аnd сουld bе used аѕ a veritable
resource frοm whісh fraud сουld bе mitigated. Fresh graduates’ саn аѕ well attain a Diploma іn
Investigative & Forensic Accounting (DIFA) Program thаt provides a broad range οf knowledge аnd
skills tο carry out financial investigations.
Aѕ fοr managements, thеrе іѕ a need tο develop a proper corporate governance аnd internal control
systems іn whісh those οf high authority аrе held liable аnd responsible fοr аnу fraudulent аnd
unethical misbehavior.
In sum, іt іѕ somehow a long process tο ѕtаrt incorporating forensic accounting іn academic curricula.
A first step thаt needs tο bе established іѕ сrеаtіng awareness οn ethical issues. Aѕ іt wаѕ discussed,
cultural shifts towards thе importance οf Forensic Accounting іѕ mυѕt bе maintained, governments,
legislation, educational systems аѕ well аѕ managements ѕhουld share thеіr раrt іn thе diffusion аnd
implementation οf forensic accounting.

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Recommendations of Prevention Committee on Tax Evasion
(Part-II)
Point – 7 ELIMINATION OF EXEMPTION PROVIDED THROUGH SROS
Recommendations
The FBR is currently evaluating the impact of SRO’s on the revenue collection and their repercussions
of overall economy. The committee of the view there are numbers of SRO’s which are of beneficial
and provide benefit and promote local manufacturing by allowing concessionary Customs duty on
raw material and bringing new FDI in Pakistan. However there are large of number of SRO’s which are
being misused and duties/taxes are being avoided through them. We therefore, recommend that
those positive SROs should be made part of law, i.e. annual budget, and SRO culture should be
terminated w.e.f 1st July 2015.
Point – 8 INTRODUCTION OF FOOLPROOF SYSTEM TO COLLECT TAX FROM PROFESSIONALS AND
OTHERS
RECOMMENDATIONS
a. A very encouraging step in this direction was taken by the Government through the Finance Act, 2013
by insertion of Clause (ix) in Section 114 of the IT Ordinance for mandatory filing of returns by the
professionals. There is a big group of artists, dress designers, models, event managers, sales and
marketing people running different businesses from their homes or offices in the back streets or just
through the cell system, etc. are generating significant untaxed revenues. However, it is a bitter truth
that FBR has failed to make any significant progress in this direction to bring them into the tax net. All
professionals like Doctors, Lawyers, Engineers, Attorneys, Architects, Chartered Accountants, and
Consultants etc. misreporting their income be treated as criminal offenders which should constitute
criminal penalty. Amendments be made in respective law. All professionals be required to receive
their fee through banking channels i.e. cheques, pay orders, demand drafts etc.
b. It is therefore recommended that a separate zone in each city with required strength be created
responsible for the following:-
i. Ensure members of various professional bodies and known potential prospective taxpayers are
registered with tax department;
ii. Work in co-ordination with FBR IT team to generate profiles of such professionals and Others
Assets, Revenue and Expenditure information and match with information available through
filing of Return of Income and Wealth Statement; and
iii. To carry out sting operation by the officials of FBR or/and any other agency (3rd party) at
specialist clinics, big hotels, Expo centers, Building Control Authorities for Architects, Courts for
lawyers or at their business premises in the big cities to check their receipts. Obtain data of
foreign bank accounts of professionals to investigate whether any fee related to services in
extended in Pakistan are received/deposited in such accounts. This action will create a great
deterrence for huge evasion of taxes in this area.

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Point – 9: Admissibility of Input Sales Tax
RECOMMENDATIONS
a. Introduction of rational GST at all stages and elimination of refunds. It has been advocated that single
stage sales tax at a lower rate may be imposed without any claim of refund in place of present GST in
value added mode. There are reservations against proposal of Single stage Sales tax (SSST) at a lower
rate of GST at every stage; Nowadays the VAT model is implemented in 8 of the 10 major economies
and in 140 of the approximately 170 countries around the world working well for large economies
(such as Germany) and in small countries (like Mauritius) and not a single country ever tried to convert
from VAT to a single stage sales tax system (SSST).
b. Clause 8(1)(ca) of the Sales Tax Act 1990 states that input tax may not be claimed by a registered
person on the goods in respect of which sales tax has not been deposited in the Government treasury
by the respective supplier. In the current environment of payment of taxes in time, it is difficult for a
buyer to ensure the deposit of the sales tax into Government Treasury by the seller, as the buyer does
not have any enforcement power over the seller. FBR is trying to transfer its own burden to taxpayers
and trying to hide its inefficiencies. This provision should be withdrawn as the court has also declared
this section as ultra vires.
c. To eliminate culture of fake invoices, PCT Code identification shall be incorporated in Sales Tax Return
Form STR -7.
d. Cellular Companies tax Collection.
i. Income tax @ 14% under section 236 of Income Tax Ordinance 2001 is deducted at source of
the amount of bill price of prepaid telephone card which is adjustable. Federal Excise duty @
18.5% of the charges is collected only in Islamabad and Baluchistan by FBR. Whereas,
Provincial authorities of Sindh, Punjab and KPK are charging sales tax @ 19.5% on telecom
services due to 18th amendment.
ii. A combined audit of all telecom companies on behalf of all revenue agencies i.e.; FBR,
Provincial Revenue authorities (SRB, PRA and KPRA) and PTA to plug loopholes and revenue
leakages (Income tax, FED and Sales Tax) may be conducted.
iii. Payment through Pre Paid Cards shall be the only mode (even if dealers get such cards from
companies, it should be the responsibility of the Service Provider to collect and deposit tax).
iv. The Pre-Paid Cards shall be printed only at the Pakistan Security Printing Corporation or under
secure / controlled environment.
v. Top up shall also be made through pre-paid card, sold to cell company’s agents,
shopkeepers.
vi. Cellular Phone Companies and Internet Provider Companies shall place orders, (with payment
of the PSPC charges) of printing with PSPC for provide/print/supply of pre-paid cards of various
denominators, with printed matter to be provided by the respective companies.
vii. Pakistan Security Printing Corporation PVT Ltd will print the Pre-Paid Cards, with “15% WHT and
19.5% GST Paid" on each card.

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viii. Cellular Phone Companies and Internet Provider Companies will deposit the total amount of
GST and WTH in FBR account at NBP, and provide the paid voucher, certified by FBR through
PRAL System, to PSPC and collect the pre-paid cards.
ix. As GST on services is a provincial tax, Cards will be printed separately with name of
province/federal territory for sale in Punjab, Sindh, KPK, Baluchistan and Federal territory. This
will enable transferring GST to the respective provinces collected by FBR.
x. The printing of Pre-Paid Cards suggested only at the Pakistan Security Printing Corporation PVT
Ltd, due to security reasons, to eliminate fraudulent duplication of Pre-Paid Cards. In fact
security level provided for Currency notes printing is required to eliminate possibility of
duplicate cards.
xi. On line access to the system of telecom companies should be given to FBR.
xii. Similarly, tax collection mechanism (forensic audit) for other sectors of economy i.e. Textile,
Manufacturing etc be reviewed and improved
Point – 10: CUSTOMS CONTROL TO BE IMPROVED FOR TRANSPARENCY AND FAIRNESS
RECOMMENDATIONS
a. The menace of unauthorized and under invoiced imports is impacting negatively on the growth of
organized sector and it is impediment to provide level playing field to all the business houses.
Therefore, in order to improve Custom controls following recommendations are made:-
i. The fixation of value is measure through which the mis-declaration or under declaration by
importers can be check and discouraged. In order to institutionalize the valuation system, we
recommend that it should be outsourced to third party to ensure proper and realistic
determination of value for levy of Custom Duty and other taxes. It will help the appraisement
department of Customs in assessing the fair value of goods imported;
ii. Duty and tax structure should be reviewed in order to rationalize its impact on legal imports;
iii. The enforcement arm of customs should be strengthened with appropriate legal powers to
stop the sale of unauthorized imported goods;
iv. Counterfeit imported products should be effectively checked;
v. Penalties for mis-declaration and under-invoicing to be made more stringent;
vi. Re-Export or temporarily imported goods shall be cleared against a security in the form of a
postdated cheque for the differential amount between the statutory rate of customs duty and
sales tax and the amount payable under the notifications, along with an undertaking to pay
the customs duty and sales tax at the statutory rates in case such goods are not re-exported
on conclusion of the project; and
vii. Afghan Transit Trade shall be regulated for Tracking. No monopoly shall be allowed by FBR for
a single tracking company, and Tracking Company shall be the bailee of the cargo.

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b. Following recommendations made by the Sub-Committee of the Revenue Advisory Council in the
matters of Custom Valuation vide report dated 18th Jan, 2010 be adopted:-
i. That high level Government effort should be made to ensure proper implementation of
agreements executed with Governments of the Republic of China and United Arab Emirates
for cooperation and mutual assistance in Customs matters;
ii. The FBR should make further effort to execute similar agreements with such exporting countries
from where the value of goods declared by the importers are unreliable and inaccurate;
iii. A proper study should be made to analyze the viability and effectiveness of posting Customs
Valuation Counselors at Commercial mission in such trading partner countries; where risk of
underreporting and mis-declaration is high and rampant;
iv. It should be made mandatory for the Authorized Dealers to put condition in the LC or Contract
that the Exporter of the goods will manually sign commercial invoice (in quadruplicate)
indicating LC/Contract number, importer’s National Tax Number, Description of goods, H.S.
Code, Country of Origin, actual amount paid or payable and submit the same along with
other original documents for approval of the designated bank in Pakistan;
v. Paragraphs (23) and (24) of the Chapter XIII of the Foreign Exchange Manual be amended;
whereby it should be made mandatory for the Authorized Dealers to send the copies of Form
‘I’ along with copy of manually signed invoice to the Customs Valuation Department on real
time basis;
vi. It should be made mandatory for the importer to instruct exporters of the goods to keep one
copy each of the commercial invoice, packing list and certificate of origin duly signed
manually in the Container;
vii. The FBR should emphasize on strengthening Post Clearance Audit (PCA) as it is in line with the
best international practices;
viii. Skilled and fully dedicated team of auditors also having expertise in the financial accounting
and are well conversant with audit techniques may be posted/hired/recruited for the PCA;
ix. Registration process (ID issuance) in Custom’s automation system may be made more stringent
to ensure that fake importers/exporters do not enter in the system. This will help in their post
clearance audit;
x. The services of external auditors having sector specializations for example chemical, textile
etc. be acquired for PCA;
xi. There should be more emphasis on entity and product based audit instead of transaction
based audit.
xii. That an experienced and dedicated team of present and former Custom Officers should be
formed to study the following and keeping in view the best practices in the world and local
demands; make appropriate recommendations in this regard:-
1. Items currently listed on the exemption list and persons registered under the DTRE;
2. Importance for allow ability of exemptions and granting registration under the DTRE
Scheme;

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3. Benefits achieved by the stack-holders and GOP;
4. Study of Cost benefits versus Revenue losses suffered by the GOP;
5. Alternative available;
6. Monitoring and auditing of the transactions; and
7. Recommendations for establishment of appropriate mechanism for allow ability of
exemptions and granting registration under the DTRE Scheme.
xiii. That keeping in view the global commitment tariff reforms with respect to Customs Duty have
already been carried out; however in order to de-incentivize under and mis-declaration;
reasonable reforms should also be made in other taxes viz. income tax, sales tax and federal
excise duty;
xiv. Capacity building of Customs Officers should be enhanced for detection of under declaration
and mis-declaration of goods; and
xv. That keeping in view the international obligations and guidelines provided by the WTO and
WCO; Customs Duty should be levied on the Transaction Value, except in the identified
circumstances.
Point – 11: RECONCILIATION AND STREAMLINING OF FEDERAL AND PROVINCIAL TAX LAWS
RECOMMENDATIONS
Conflicting issues related to chargeability of taxes on services emanated due to legislation after the
18th Constitutional amendment, must be resolved without any further delay. This has resulted in
undesired litigation and disappointment to lot of large and bonafide taxpayers.
Point – 12: DEVELOP CAPACITY TO FORMULATE AND IMPLEMENT TRANSFER PRICING
RECOMMENDATIONS
a. The globalization of economic activity and the increasing volume of international transactions of
multinational enterprises (MNEs) imply that transfer pricing for tax purposes already is and–in the near
future–will remain one of the most important tax issues. Coupled with the growing type and number of
cross-border transfers of intangible assets, concerns arise about the adequacy of transfer pricing rules
as they are currently provided by many national tax authorities including Pakistan.
b. The key question of transfer pricing is how prices for goods, services and intangibles that are
transferred across borders, but within multinational networks should be established. Thus, the success
of the local operation is the only interest of national taxing authorities. The arm’s length rule, which has
formed a core value in international taxation for most of the twentieth century, serves two functions in
this context. Firstly, it provides national taxing authorities with a mechanism for fair allocation of profits
as between local operations of a multinational group and other parts of the group. Secondly, as
nation states compete with each other for tax revenues, it provides a mechanism for fair allocation of
taxing jurisdiction among nation states.

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c. Section 108 of the IT Ordinance, deals with the powers of the Commissioner Inland Revenue with
regards to the determination of the arm’s length value of any transaction between associates. In order
to determine the arm’s length result of any such transaction, the Income Tax Rules, 2002 state that the
following methods may be applied by the Commissioner. These methods are identical to the methods
available under the OECD Guidelines:-
i. The Comparable Uncontrolled Price Method (CUP)
The price quoted for a transaction between uncontrolled parties on similar terms and
conditions will be considered.
ii. The Resale Price Method
Difference in the resale gross margin of the two transactions would be considered and
compared for determining whether the transaction between controlled parties is on arm’s
length basis or not.
iii. The Cost plus Method
The cost plus markup realized in an uncontrolled transaction will be considered as a
basis to determine whether a similar transaction between controlled parties is on arm’s length
basis or not.
iv. The Profit Split Method
Where group of associates is formed and the transactions are so interrelated that a separate
basis is not possible to identify the arm’s length results for a similar transaction between
uncontrolled persons, the profit sharing basis agreed between independent persons forming
an association would be considered.
It should be noted that between clauses (a), (b) and (c), the method that, having regard to all
the facts and circumstances, provides the most reliable measure of arm’s length result as in
the opinion of the Commissioner shall be applied. The method in clause (d) shall apply only
where the methods in clauses (a), (b) and (c) cannot reliably be applied.
d. Pakistan has concluded around 63 income tax treaties which contain an article which resembles
Article 9 OECD Model Tax Convention on “Associated Enterprises.” Over 60 governments have
adopted transfer pricing rules. Transfer pricing rules in most countries are based on the “arm’s length
principle”–that is to establish transfer prices based on analysis of pricing in comparable transactions
between two or more unrelated parties dealing at arm’s length. The OECD has published guidelines
based on the arm's length principle, which are followed, in whole or in part, by many of its member
countries in adopting rules.
e. However, in Pakistan it is observed that the above provisions of income tax law and Custom’s
valuation method have not provided significant results in this regard. The committee therefore
recommend that trained team of Revenue Officer should be deployed at income tax and custom
offices to carefully examine and ensure that MNEs to value cross-border transfers between related
party firms by applying the arm’s length standard (ALS), on tangible products and intangible assets
resulting in the universally recognized method for the fair allocation of profits across borders between
related parties, in respect of manufacturer, distributor and service provider.

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f. The discretionary powers extended to tax authorities in Income Tax Ordinance, 2001 through
continuous amendments in the Ordinance should be removed to bring the Ordinance in its original
form and objectivity when introduced in 2002;
g. IT system of PARAL should be enabled to capture all purchase and business transaction by taxpayers,
we should honestly and carefully examine whether the existing system or the system in its refined form
is providing the desired results or would be capable to provide the desired results;
h. Collect data of stock exchange transactions and enquire the source of investment, without fear of fall
of market;
i. Develop capacity of FBR to check under invoicing while improving this capacity, 3rd party may be
used.
j. Denomination of highest money bill (note) be reduced to Rs.1,000 instead of Rs.5,000.
k. FBR be given powers to perform forensic audit of taxpayers where fraud in payment of government
revenue is detected and proved.
Pakistan National News (Fraud & Corruption News)
Money-laundering case: Ayyan probe speeded up amid fresh proof
Upon acquiring concrete evidence, the Intelligence and Investigation Inland Revenue (I&IIR) has
accelerated the investigation process against model Ayyan Ali in a money laundering case. “The I&IIR
has managed to gather a good number of evidences in the case which will lead to nabbing of the
real culprits behind this money laundering case,” sources in the I&IIR told The Express Tribune on
Monday. They said the investigation body has been able to successfully unearth various facts in the
case and the links which were patronizing the supermodel. “During the course of the investigations it
has been found that Ayyan, who actually belongs to Gujar Khan, owns an expensive luxury apartment
in a high-end housing society of Karachi, despite failing to disclose her sources of income,” the
sources maintained. During the course of investigations, it was found that the model also got Rs.22
million in the form of 11 bank drafts which were delivered to her by a woman, who is living in
Mirpurkhas, they said, adding that the details of the woman who gave the drafts to Ayyan Ali are also
available with the I&IIR but her name is not being shared now because she will also be investigated.
The sources said the I&IIR has also sought details from all those airlines on which the supermodel has
travelled. The airlines have been asked to provide details of her visits abroad with detailed information
regarding the payment of tickets. The I&IIR has the record of her 34 visits abroad, but so far it failed to
get Ayyan Ali to tell the source of her income and the purpose behind her visits, they added. The
Special Customs judge Rawalpindi expressed dismay during the hearing on Monday as the customs
authorities had failed to submit a full challan against the supermodel and directed them to submit the
challan at the next date of hearing.
Minister appreciates, endorses NAB’s proposal
Saira Afzal Tarar, the minister of state for national health services, regulations and coordination, has
appreciated the NAB’s proposal to print “say no to corruption” on cigarette packets. She also directed
the concerned officials to discuss ways and means for implementing this initiative. This was stated in a

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meeting with Director General Awareness and Prevention Division NAB Aliya Rashid here on
Wednesday. Aliya Rashid apprised the minister that one of the major issues of developing countries is
corruption with its manifestations as bribery, nepotism, embezzlement and misuse of authority, leading
to socioeconomic problems. “In Pakistan we are under higher threat from corruption. Therefore, there
is a need to encourage people to stand up in the fight against corruption,” she said. The DG NAB also
apprised the minister of the initiatives of NAB for creating awareness against corruption. The minister
appreciated the efforts of NAB and assured full cooperation for jointly spreading the message “say no
to corruption.” The minister also suggested NAB to advise all departments to print the message “say no
to corruption” on letterheads and files. The minister said that this ministry has notified new pictorial
health warning of 85% size to be printed on cigarette packs and outers. She also talked about the
effectiveness of PHWs in deterring youth from taking up smoking. The National Accountability Bureau
has intensified its public awareness drive themed “Say No to Corruption.” The NAB is using different
forums to spread the anti-corruption message to the people of the country. After approval from
Chairman NAB Qamar Zaman Chaudhry, awareness and prevention division approached ministry of
national health services, regulations and coordination and Pakistan Tobacco Board for printing “say
no to corruption” on cigarette packs as large number of Pakistanis are cigarette smokers. Therefore
cigarette packs can be good source to spread the message against corruption.
Coughed up: NAB Lahore recovers Rs.8.2 billion
National Accountability Bureau (NAB) Lahore Regional Bureau received 1,616 complaints and
disposed of 1,240 during January- May 2015. Director General NAB Lahore said this while briefing
bureau’s Chairman Qamar Zaman Chaudhry. During 2015, NAB Lahore has authorized 51 complaint
verifications, 237 inquiries and completed 115 while 122 inquiries were under process, he said. The
regional bureau authorized 156 investigations during the current year out of which 76 were
completed while 80 were under process. Moreover, NAB Lahore arrested 44 accused during 2015.
Self-accountability: NAB to ensure internal accountability, efficiency
The proposed internal accountability mechanism aimed at ensuring efficiency and improving
performance of the National Accountability Bureau was reviewed here in a meeting at the
organization’s headquarters, said a press release. National Accountability Bureau (NAB) Chairperson
Qamar Zaman Chaudhry while chairing the meeting emphasized the need to augment and
strengthen the process of the internal accountability mechanism with a view to weed out elements
that for reasons of inefficiency, misconduct, malpractice and violation of laid down rules bring a bad
name to the organization. The Inspection and Monitoring Team (CI&MT) chairman in his presentation
said that an effective internal accountability mechanism had been devised in order to encourage
the culture of adherence to rules and SOPs. He informed that under the mechanism, matters related
to delinquency of NAB’s officials shall be first dealt by the regional offices in accordance with law.
Subsequently, the Human Resource Division of NAB will proceed against those officials. Chaudhry said
NAB was Pakistan’s apex anti-corruption organization with the mandate to eliminate corruption from
the country. He said that the organization’s performance had been appreciated by the Transparency
International and PILDAT.
NAB given last chance to proceed against own men
The Supreme Court Wednesday giving last opportunity to the National Accountability Bureau to take
action against its officials, found in irregularities, said if the Bureau fails to proceed against them then

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the matter would be referred to Federal Investigation Agency (FIA). A two-member bench, headed
by Justice Jawwad S Khawaja, observed that the NAB had established siege around it so that no
other institution could point out irregularities in the affairs of the Bureau. The bench noted there are
many illegalities in the NAB and for its rectification there should be a system. Justice Jawwad said
referring the matter to FIA would have far reaching effects on NAB, as from chairman to all officers
would have to appear before the Agency. The court had directed NAB to submit a report about
pending references on privatization of Muslim Commercial Bank, Rental Power Plants, and corruption
in Ogra on 3rd June. It ordered that the court must be informed clearly whether former Chairman NAB
Fasih Bukhari had violated the formula given by Supreme Court for taking action against those
involved in RPPs scam. Prosecutor General NAB assured the court that the Joint Investigation Team
(JIT), set up for the purpose, would take an important decision on it in the meeting. He further told that
the NAB is working to design software with the help of LUMS professors for centralized monitoring
system. The court further directed NAB to submit a report on alleged maltreatment with Col (Retired)
Khalid Rashid by an official of NAB on 11th June. The court observed that the NAB had shown
unnecessary hurry in this case as the conflicting reports were strengthening the allegations levelled by
the petitioner. The action taken is also not corroborating with the decision taken by executive board
meeting of NAB. The bench warned if the true report is not presented before the court then the
matter could be referred to FIA. Justice Jawwad said so far they were avoiding sending the matter to
FIA and wanted the NAB itself start the accountability process. The judge observed that the NAB
officer Subah Sadiq, who had taken action against the petitioner’s company, joined that company
after the retirement. On the court query, Deputy Prosecutor General Azam Khan informed that Subah
Sadiq had violated two years ban, as the government employees can’t work for two years after
retirement. The bench dismissed the application, filed before the apex court regarding NAB
references in the Ogra case. The petitioner had been directed to approach the relevant forum for
redressal of his grievances. Justice Jawwad said if the application is accepted then it would become
precedence and people would file petitions directly in the Supreme Court against NAB.
NAB Multan Bureau files first corruption reference
The National Accountability Bureau (NAB) Multan Regional Bureau which was established in March
2015 to address the corruption complaints of three divisions of South Punjab including Multan,
Bahawalpur and Dera Ghazi Khan in order to save the people of South Punjab living in far flung areas
for travelling long distances to get their grievances addressed at NAB Lahore Bureau, has filed its first
corruption reference against Sheikh Zakaur Rehman s/o Bahauddin Haji. In this case the NAB received
complaints against the accused person who is businessman from district Vehari for collection of
Rs.22,928,015 money from public at large in the pretext of investment in his wholesale business of sugar
with a promise of high profit. In order to deceive the people at large, the accused Sheikh Zakaur
Rehman gave fake payment receipts and postdated cheques to the affected from his personal and
business accounts but any respective bank honored no cheque. During the investigation, it has
transpired that the accused Sheikh Zakaur Rehman allured innocent people by offering high rates of
profit on their investments in his sugar business and embezzled hard earn money of people to the tune
of Rs.22,928,015. The NAB Multan has filed a corruption reference against the accused in the
Accountability Court Multan as accused Sheikh Zakaur Rehman was running his sugar business in
Multan. The decision of Chairman NAB Qamar Zaman Chaudhry of establishing NAB Multan Bureau
was hailed by the people of South Punjab with a clear vision to deal strictly under NAB’s zero

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tolerance policy against corruption and pursue corruption cases on transparently and merit on the
basis of evidence.
NAB plans awareness campaign
The National Accountability Bureau (NAB), in accordance with recent directives of its chief Chaudhry
Qamar Zaman to focus on formation of Character Building Societies (CBSs) for students, has initiated
coordination with managements of several educational institutions. In the first phase, CBSs would be
formed in Army Public Schools and Colleges (APSAC), Fazaia Schools, Bahria Foundations,
Beaconhouse Schools, The City Schools and The Educators, as per a press release issued by NAB
Karachi on Thursday. The NAB awareness team led by Major (Retired) Shabbir Ahmed gave a briefing
at the Regional Coordinators Training Conference at APS Saddar. The NAB team presented a detailed
briefing on the activities under the awareness mandate project which prominently includes seminars,
workshops, tableaus, essay writing competition, declamation contests, painting competitions, lectures
and anti-corruption walks. The team also shared in the briefing that NAB would conduct motivational
lectures signing of integrity pledge and under taking of integrity oath at various institutions. As part of
the campaign, the NAB has also started conducting FM radio programs.
PAC asks NAB to submit report in fortnight
The Public Accounts Committee on Wednesday sought a detail report from the National
Accountability Bureau in two weeks on privatization of the Pakistan Telecommunication Limited (PTCL)
and alleged mismanagement by the then government. PAC chairman and Opposition Leader in
National Assembly, Syed Khursheed Shah ordered the audit officials to conduct audit of the PTCL and
submit report to the committee. "We wrote a letter to the PTCL management for its audit but they
refused," audit officials informed the committee members. Privatization Commission chairman M
Zubair briefed the committee members that privatization of the PTCL was unfair and against interest of
the country. The PTCL has not paid even a single penny from $800 million that it owed to the
government of Pakistan, he said, adding the Etisalat has not paid a single instalment since 2008.
Zubair said, the government has handed over 3,214 properties out of 3,248 properties to the Etisalat
and agreement of the PTCL was not transparent and it hurt interests of the country. "The government is
abiding by the agreement despite the fact that privatization of the PTCL was not a fair deal," he said.
Zubair told the committee members that the government was bound to transfer all the properties to
the Etisalat but the government failed to do so. "The Etisalat has withheld 800 million dollars after the
government failed to the case was also referred to National Accountability Bureau but nothing
concrete came out during the investigation, he said, adding the inquiry report is still pending with the
NAB. He said no audit has been conducted of the PTCL after 1996 as the organization has virtually
refused the auditors to let in for the job. "No entity can violate constitution of Pakistan. Audit officials
must do audit of the company and if the company denies the audit, then report the same to the
committee for further action," the PAC chairman said. The Privatization Commission chairman informed
the committee members that privatization of the organizations was must that have failed to deliver
and improve their services for the public. The committee directed the audit officials to conduct audit
of the organizations that are being privatized by the government. The audit officials, however, said
that audit was only possible after privatization of the public and private entities. Khursheed Shah said
that the Parliament was increasing pressure on the government to stall privatization of the entities that
were running in profit. "Some organizations are running in loss of around Rs.700 billion per annum. The
annual loss of power distribution companies amount to around Rs.500 billion per annum," said Zubair,

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adding that privatization of the DISCOs would be completed within a year. The committee members
also raised their concerns about the ongoing work on New Airport Islamabad and alleged
embezzlement of funds in the project and sought a report from Federal Investigation Agency on it in a
month.
FBR holds Tax Fair to promote compliance
Federal Board of Revenue (FBR) Chairman Tariq Bajwa on Wednesday said Pakistan lacks the culture
of tax compliance. He was addressing a large gathering of students attending a ‘Tax Fair’ organized
by the FBR at the National University of Sciences and Technology (NUST) Islamabad. The daylong ‘Tax
Fair’ featured a number of informative, educational and dialogue-driven activities, including
speeches, group discussions, stalls, mock theatres and a Q&A session between FBR officers and
students. The event was organized in collaboration with School of Social Sciences and Humanities of
NUST and Gesellschaft International Zusammenarbeit (GIZ) which is assisting FBR under its good
governance program. Bajwa, who attended the ‘Tax Fair’ along with senior officials of FBR, said the
government was determined to raise the tax-to-GDP ratio and broaden the tax base by adding
100,000 potential taxpayers every year to the tax net. “Last year, we added about 100,000 new
taxpayers and we plan to raise another 100,000 this year to boost the tax revenues,” he said. FBR
chairman invited the student community to be the agents of change and promote discussion on
social media and also within their circles on different facets of taxation. “I expect you to expand
social media discussion on taxes to a critical mass that prompts an actual change in society,” he
added. Leading economist Dr. Ashfaque Hasan Khan, who is also the Dean of NUST Business School,
explained how resource-starved Pakistan was amongst IMF’s most frequent nine borrowers of its total
199 members. He also said that even friendly countries were reluctant to lend and burden their tax-
payers. They question the largely non-tax compliant population in Pakistan, he said. Khan stressed the
importance of economic sovereignty for Pakistan, and how “our 100 million below 22 years old, can
be the catalyst to bring such change”. He welcomed the FBR’s initiative to tap the energy and
dynamism of youth in its efforts for broadening the tax base. FBR Facilitation and Taxpayer Education
member Nadeem Dar explained the purpose and scope of the ‘Tax Fair’ which, he said, was the first
of a series of activities planned as part of a “Tax Change Agent” campaign. It will be replicated at
other leading educational institutes of the country under the theme ‘Banaey Naujawan, Behtar
Pakistan’. The idea to engage students to create a tax culture that advocates voluntary tax
compliance was conceived following similar exercises in other countries. The ‘Change Agent
Campaign’ will motivate the youth to influence public opinion by engaging their peers, friends and
relatives to contribute in nation building by filing correct tax returns and paying their due share of
taxes voluntarily. The event was hosted by eminent media personality and TV anchorperson Syed Talat
Hussain who spiced up the discussion and Q&A session with his incisive ‘takes’ on the state of affairs
resulting from non-tax compliance.
Signal-free corridor judgment: High Court directs NAB to probe LDA, EPA heads
A Lahore High Court full bench has directed the National Accountability Bureau (NAB) to start an
inquiry against director generals of the Lahore Development Authority (LDA) and the Environment
Protection Agency (EPA) for their failure to comply with the law in the launch of the signal-free corridor
in the city from Qurtaba Chowk on the Jail Road to Liberty Roundabout on Gulberg’s Main Boulevard.
The NAB was given two months to conduct the inquiry and submit a report to the court. Otherwise, the
bench observed, the court would proceed with the matter on its own. The LHC had, in a short order,

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scrapped the project on April 18. The detailed judgement was issued on Wednesday following recent
directions from the Supreme Court of Pakistan. In the 110-page judgment, the bench headed by
Justice Mansoor Ali Shah observed that in proceeding with the project the LDA had caused
inconvenience to the residents of the city besides a loss of Rs.60 million to the public exchequer. “The
EPA failed to take action against the LDA and allowed construction work without the environmental
approval. We have been informed that Rs.60 million of taxpayers’ money has been spent on the
project so far,” it noted. The bench observed that local elections were scheduled in the province in
September 2015 and stated that until there was an elected government in the city the LDA should
restrict its activities to completion of projects launched before the election announcement. It also
expressed displeasure over the authority’s failure to submit in court a list of such projects. Besides, the
bench stated that the LDA could oversee day-to-day repair and maintenance work in areas that fall
under its jurisdiction. The bench struck down as unconstitutional initiation of the project by the LDA on
its own. It stated that work on the signal-free corridor was commenced in violation of Section 12 of the
Punjab Environment Protection Act and that any attempt to proceed with the project would be in
violation of Article 140 A of the Constitution (which requires elected authorities at the local level). It
observed that the LDA could propose establishment of the signal-free corridor at the site of the
elected local government. “It is up to the elected government to approve or disapprove the project,”
it said. The bench further stated that with the commencement of the project the LDA had
encroached upon the political, administrative and financial powers devolved on elected
governments under the Punjab Local Government Act. With the passage of the Punjab Local
Government Act, the LDA could no longer exercise powers vested in it under various sections (6, 13,
13A, 14, 15, 16, 18, 20, 23, 24, 28, 34A, 34B, 35, 38 and 46) of the Lahore Development Authority Act of
1975. It said such an attempt would be an encroachment on the jurisdiction of elected authorities.
The bench dismissed the prolonged absence of an elected government as a justification for
commencement of the project. It said the constitution had mandated the provincial government to
devolve powers to local governments. However, it said, the constitution or the PLGA had not specified
any timeline for the purpose. “The delay in announcement of local elections is a political affair and is
in violation of the law,” it ruled. “The failure to hold local elections is the sole responsibility of the
[provincial] executive. It has, thus far, failed to discharge this constitutional responsibility,” it said.
Assets reference: Zardari exempted from appearing in court
Former President Asif Ali Zardari appeared in an accountability court in Rawalpindi on Thursday. The
former president arrived in court today flanked by guards and amid tight security. Hearing the case,
Judge Khalid Ranjha gave Zardari complete exemption from appearing in court for future hearings of
the case. The hearing was subsequently adjourned until June 2, when the court has also summoned
the prosecution's witnesses to appear before the judge. This was the first time that the Pakistan
People’s Party (PPP) co-chairman appeared before the Rawalpindi accountability court judge since
the National Accountability Bureau (NAB) reopened the five-year-old reference in April. The PPP co-
chairman is accused of acquiring assets illegally and failing to submit correct details of his wealth. He
was previously excused from appearing in court due to ill health.
NAB committee gives recommendations on Haj
National Accountability Bureau (NAB) Chairman Qamar Zaman Chaurdry chaired a meeting in order
to review recommendations of Prevention Committee on Ministry of Religious Affairs here on Monday.
The representative of Ministry of Religious Affairs was also present in the meeting, says a press release.

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The NAB DG A&P explained the recommendations of Prevention Committee in the areas i.e.
allocation of quota for Haj Group Organizers (HGOs), special arrangements for old age Hajis,
registration of Haj Group Organizers (HGOs) for fairness and transparency, awareness and training of
Hajis, restricting Haj once in five years, rules of cancellations and refunds, HGOs agreements
verification and monitoring, embarkation points, ‘Moavineen’ and audit of compensation and welfare
fund of the Hujjaj. The first area in which the Prevention Committee gave its recommendations was
about allocation of quota for Haj Group Organizers (HGOs). It was recommended that transparent
system be established for verification and registration of HGOs with the help of 3rd party.
Categorization of HGOs may be carried out based on their resources, financial health and quality of
service and previous performance. Assessment of HGOs may be done by the customers (Hajis)
analyzing their services based on point system (quantification). Imposition of penalty be considered as
per prescribed procedure depending upon the gravity of offence. Transparent system may be
adopted for weeding out of inefficient operators and encouraging new entrants so as to ensure
competitiveness and fair play. It was observed that Haj and Umrah Act under preparation at Ministry
of Religious Affairs which may be finalized at the earliest. The second area in which the Prevention
Committee gave its recommendations is about special arrangements for old age Hajis where special
arrangements should be made to assist old age Hajis to cater to their needs. In view of the hardships
faced by the single 75+ individuals during Haj, Committee recommended that a companion is a must.
The third area in which the Prevention Committee gave its recommendations is about registration of
Haj Group Organisers for fairness and transparency in the management of Hajis where
comprehensive set of instructions must be formulated for compliance by all HGOs regarding facilities
and mandatory work to be under taken by HGOs during Haj operations. HGOs must be required to
deposit a reasonable amount of performance guarantee failing which the amount may be
confiscated and distributed among the affected Hajis. The fourth area in which the Prevention
Committee gave its recommendations is about awareness and training of Hajis where effective
awareness campaign may be launched every year about the Haj activities for Hajis, ranging from
policy to performance, dos and don’ts, call centre concept, use of SMSs. Print and electronic media
may be used in this regard. HGOs involvement in Awareness and Training may also be considered.
The fifth area in which the Prevention Committee gave its recommendations is about Haj once in five
years where the Prevention Committee recommended that those who have performed Haj earlier
may not be allowed. The sixth area in which the Prevention Committee gave its recommendations is
about composition of committee which was earlier constituted on the directions of Supreme Court of
Pakistan to reinforce and further improvement in the working of the following areas like building hiring
Committee, monitoring committee over Haj operations being conducted by MORA, monitoring
committee to review the performance of seasonal Haj staff and monitoring committee for Mina
arrangements. The seventh area in which the Prevention Committee gave its recommendations is
about rules of cancellations and refunds. It was recommended that cancellations only on the ground
of death or serious ailment of the person concerned may be allowed. In case of cancellation on any
other ground, specific penalties imposed as per guidelines and amendments thereto by ministry may
be continued. The eighth area in which the Prevention Committee gave its recommendations is
about Embarkation/Disembarkation points. It was recommended that the embarkation point must be
decided on the basis of choice given by the Haji. No change of Embarkation Point is permitted.
Embarkation Point will also be the Disembarkation point for the return journey. The ninth area in which
the Prevention Committee gave its recommendations is about ‘Moavineen’. It was recommended
that ‘Moavineen’ being deputed to help pilgrims must be organized as a well-mannered unit with
proper hierarchy of command structure for useful employment with foolproof monitoring system and

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evaluation. They must be made to wear uniforms, clearly indicating the nature of assistance they are
supposed to provide. After detailed deliberations in a lengthy session, NAB Chairman Qamar Zaman
Chaudhry approved the recommendations prepared by the Prevention Committee. He appreciated
the efforts of all concerned. The recommendations of Prevention Committee on MoRA will be sent to
Ministry of Religious Affairs for implementation.
NAB media director bags award
The National Accountability Bureau (NAB) public awareness drive themed ‘Say No to Corruption’
bagged the best public interest communication campaign award. NAB Media Director Nawazish Ali
Khan Asim received the Trust Gold Medal Award-2015 in recognition of his services in public sector
especially in media management. Information Minister Pervaiz Rashid gave him the award at a
ceremony organized by Media Development Trust, a joint initiative of Mishal Pakistan and Agahi. The
award recognizes the best public interest communication campaigns during last year. Asim had
joined NAB on deputation from Capital Development Authority last year to highlight NAB’s
performance through its awareness, prevention and enforcement campaign under the leadership of
bureau’s chairman Qamar Zaman Chaudhry.
NAB arrests outlaw for selling bogus plots
National Accountability Bureau (NAB) Multan claimed to arrest an alleged outlaw, who used to sell
bogus plots and plundered money from citizens in various cases. According to a press release issued
here, the alleged outlaw namely Muhammad Taaj son of Mohammad Bota, resident of Checha
Watni, as proprietor of Habib Town Head Rajkan Bahawalpur, sold many bogus plots on easy
instalments. He had plundered money, nearly Rs.5.6 million from the citizens, since 2008.
FBR imposes 5pc GST on LNG import for CNG
The Federal Board of Revenue (FBR) on Tuesday notified the imposition of five percent General Sales
Tax (GST) on LNG import for CNG and fertilizer sectors. The Economic Coordination Committee (ECC)
of the Cabinet in October 2014 had decided to impose 5pc GST on LNG import in any case but
exempted it from gas infrastructure development cess (GIDC). Therefore, following the decision, the
FBR notified the imposition of five percent GST on LNG import for CNG and fertilizer sectors. The Ministry
of Petroleum and Natural Resources had submitted a proposal in the ECC for exempting LNG import
from GIDC and GST in order to reduce its prices. However, the Federal Board of Revenue (FBR)
opposed the import of zero-rated LNG, as it would result in revenue loss. The government after detail
deliberations imposed five percent GST on the import of LNG as against the standard rate of 17
percent. The decision is taken with a view to facilitate the general public and encourage investment
in the sector. The FBR has also attached four conditions for levying five percent GST on fertilizer
produced by using imported LNG. The conditions included a gas supply certificate, containing
bifurcation of supply of imported LNG and domestic natural gas, from SNGPL in consonance with
allocation by the Ministry of Petroleum and Natural Resources shall be produced by the fertilizer
manufacturer to the Commissioner Inland Revenue having jurisdiction on monthly basis. (II) The
standard rate of sales tax shall be charged on supply of fertilizer if manufactured from domestic
natural gas as transmitted by SNGPL on the rates notified by OGRA for the fertilizer industry. (III) If,
during a tax period, a manufacturer purchases imported LNG as well as domestic natural gas, the
total quantity of fertilizer produced in the said tax period shall be apportioned accordingly for the
purpose of levy and collection of sales tax. (IV) In case different retail prices are fixed for the fertilizer

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manufactured from imported LNG and that from domestic natural gas, the provisions of clause (27) of
section 2 of the Sales Tax Act, 1990, regarding payment of sales tax on highest of such retail prices
shall be followed.
NAB arrests KASB Bank employee
The National Accountability Bureau (NAB) on Monday arrested Ziaur Rehman Zia, who was involved in
debiting the accounts of customers without any authority and consent of the account holders during
his posting in KASB bank Shahra-e-Faisal Branch in Karachi. The accused, son of Ataur Rehman, was
an OG-I officer at KASB Bank Ltd. He was accused for executing illegal transactions and committing
various irregularities in different heads of account that caused loss to the clients to the tune of Rs.1.1
million in his personal capacity. The accused was an absconder in reference No 9/2010 and was
declared a proclaimed offender by Honorably Accountability Court. He is presently in judicial
remand.
Balochistan health officials face NAB reference
The National Accountability Bureau (NAB) approved on Tuesday filing of a reference against some
officials of the Balochistan health department, including a former secretary. A NAB executive board
meeting, presided over by its Chairman Qamar Zaman Chaudhry, authorized filling of a reference
against former health secretary Dr. Shafi Muhammad Zehri, former additional secretary Dr. Manzoor
Hussain, former additional director Dr. Elahi Bakhsh, additional director Dr. Abdul Ghaffar Kayani and a
contractor, Dr. Akhtar Hameed. Take a look: NAB arrests KP additional home sec, two others in Rs.50
million scam the officials are accused of indulging in corruption and misusing their authority by
helping the contractor in evading taxes of Rs.6.05 million and releasing a performance bank
guarantee of Rs.3.85 million before the stipulated period. They will face charges of causing Rs.9.9
million loss to the exchequer during the purchase of a CT scan machine for the Bolan Medical
College and Hospital, Quetta. The board authorized an investigation against MPA Saadat Anwar, a
former provincial finance minister and chairman of the Balochistan Development Authority (BDA), the
BDA’s Additional Chief Secretary Ali Zaheer, Director General for Monitoring and Evaluation Manzoor
Ahmed and others for illegally changing the executing agency of a project from the communications
and works department to the BDA, illegal enhancement in scope and cost, non-transparency in
prequalification of contractors and award of contract at exorbitant rates. An investigation was
approved against Qadir Bux, Gadda Hussain Abro, Imtiaz Solangi, Abdul Subhan Memon, Salik
Nukrich and Ghulam Ali Shah for illegally allotting land in Jamshoro in connivance with the Hyderabad
revenue department that caused a loss of Rs.400 million. Another investigation will be conducted
against Peshawar C&W Depart-ment’s Chief Engineer Zard Ali Khan for accumulating assets beyond
his known sources of income.
FBR has failed in broadening tax net, says LCCI president
The Lahore Chamber of Commerce & Industry on Tuesday urged the Federal Board of Revenue (FBR)
to concentrate on the issues which are hampering trade and economic activities. While addressing a
meeting, LCCI President Ijaz A Mumtaz said that FBR has failed to broaden tax net despite grand
claims in this regard. Government agencies like FBR should act as facilitator for the business
community. He said FBR is using all tactics for revenue generation but not broadening the tax net that
is the only solution to the shortfall in revenue target. He said that reportedly, 855,429 taxpayers have
filed income tax returns for the year ended June 30, 2014. He added that 322,438 taxpayers paid zero

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tax; 260,888 paid less than Rs.20,000; 240,072 paid from Rs.20,000-999,999; 17,477 paid from Rs.1
million-2.5 million; 7,237 paid from Rs.2.5 million-5 million; 3,817 paid from Rs.5 million-10 million; while
3,500 paid Rs.10 million and above. Mumtaz said that these statistics show a really dismal state of
affairs in FBR which has not been able to add any new taxpayers notwithstanding the fact that it
claims to have complete data of 3 million plus persons having taxable income. He said that the net
annual collection of FBR from textile sector by maximum is Rs.10 billion. The current rate of sales tax on
textile goods varies from 2%-5%. With these rates the stuck-up amount of refund cases of textile sector
is stated to be over Rs.100 billion. If FBR increases the sales tax rate, the stuck-up refunds will multiply
further choking the working capital of the textile sector. He said that FBR is totally ignoring the under-
invoicing factor that is one of the biggest threats to the economy. The Government of China’s official
export figures to Pakistan are $11 billion whereas Pakistan government’s official import figures from
China are merely $6.5 billion, showing an under-invoicing of $4.5 billion which is equivalent to Rs.455
billion at the current exchange rate, he said. If the evaded customs duty is taken at 10% and sales tax
at 15%, the total revenue which the FBR does not collect under this head is close to Rs.112 billion.
Curbing corruption: NAB to work on 16 cases referred by SECP
The National Accountability Bureau (NAB) and the Securities and Exchange Commission of Pakistan
(SECP) have agreed to create a joint task force that will work expeditiously on 16 cases referred by
the SECP to the NAB. Two senior level officers from the SECP–one each from the legal and operation
side–and senior level officers of the NAB from Financial Crimes Investigation Wing and Operation and
Prosecution Wing have been identified to be part of the Joint Task Force and have started their work.
A recent complaint referred by the SECP to the NAB is regarding alleged fraud, embezzlement and
cheating public at large by the Sponsors, Directors and Management of M/s ACE Securities (Private)
Limited (ASPL) Broker of Karachi Stock Exchange Limited. The ASPL allegedly entered securities in the
sub-accounts maintained under its participant ID without authority of the sub-account holders in
violation of applicable laws. On April 23, 2015, the KSE through a show cause notice conveyed to the
ASPL that all trading work stations would be switched off before opening of market on Monday, April
27, 2015 if no response/action is given/taken by the ASPL. On failure to address the investor’s claims,
the KSE suspended operations of all trading terminals of the ASPL till further notice. In view of the
alarming rise in number of unresolved complaints against the ASPL, the NAB chairman has ordered
inquiry regarding alleged fraud, embezzlement and cheating public at large by the Sponsors,
Directors and Management of the ASPL at the earliest regarding the matter.
Investigation: NAB to probe Rs2 billion sugar subsidy case
A parliamentary panel has unanimously decided to send Rs.2-billion sugar subsidy case to the
National Accountability Bureau (NAB) for investigation following inability of the ministries of commerce
and industries to act in line with its directives. “The panel will refer the case of unjustified sugar export
subsidy to NAB to determine the basis on which the subsidy was fixed,” the National Assembly
Standing Committee on Industries and Production said in a meeting held on Friday. In its 2008-13
tenure, the Pakistan People’s Party government had approved the provision of Rs.2 billion in inland
subsidy on the export of 1.7 million tons of sugar. This included subsidy of Rs.1.75 per kg on export of
1.2 million tons and Rs.1 per kg on export of 500,000 tons. In an earlier meeting on March 17, 2014, the
standing committee had asked the ministries of industries and commerce to refer the matter to NAB.
However, they could not comply with the order because Pakistan Tehreek-e-Insaf (PTI) members of
the committee had tendered their resignation from the National Assembly. When the PTI returned to

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the lower house, standing committee chairman Asad Umar called its meeting on April 22 this year,
which was later rescheduled for May 8. Additional Secretary Ministry of Commerce Azhar Chaudhary
disclosed in Friday’s meeting that sugar mill owners had submitted 4,966 rebate claims, but no amount
was disbursed. Umar, who is a top leader of PTI, wanted to know on what grounds the previous
government extended the subsidy of billions of rupees to the sugar industry, which was mostly
represented by politicians. Industries Secretary Arif Azim argued that the Ministry of Commerce had
sent the summary seeking the subsidy to the Economic Coordination Committee (ECC), so it was the
responsibility of the said ministry to send the case to NAB. On his part, the additional commerce
secretary pleaded that since his ministry had taken the summary to the ECC, the case should now be
sent by the Ministry of Industries to the accountability bureau. The standing committee chairman
warned that he would unveil the facts at a press conference within a few days. However, NAB
Additional Director Asim Lodhi said the bureau accepted the directives of parliamentary committees
as executive orders and the subsidy case could be sent to NAB for initiating a probe. Committee
secretary will refer the matter to NAB. Pakistan Sugar Mills Association Chairman Iskandar Khan had
sought an inland freight subsidy of Rs.6 per kg but the government approved only Rs.1.75 per kg on
export of 1.2 million tons and Rs.1 per kg on export of 500,000 tons. He argued that the subsidy was
not meant for the sugar millers, but the relief was for the farmers who were not being paid properly.
“Farmers are the victims as they have not been educated about enhancing the sugarcane yield.”
Government finalizing LNG import agreement with Qatar, Senate told
The Senate was informed Thursday that the net foreign direct investment (FDI) made in the country
from July last year to January 31 this year is $ 545.4 million. Minister of State for Parliamentary Affairs
Shaikh Aftab Ahmad told the House during question hour that profit repatriated during the period is $
706.9 million. Answering a question, the minister told the House that Adil Gilani has been appointed as
honorary consultant in the Prime Minister’s Inspection Commission. He said Gilani has no concern with
any matter in PMIC, nor involved in any decision making process as he has consultancy role alone.
Minister of State for Petroleum and Natural Resources Jam Kamal told the House that SNGPL has
reported that currently 13 sales marketing stations are feeding gas to southern districts of Khyber-
Pakhtunkhwa and gas losses under the SMSs are more than ninety percent. He said exponential
increase in losses in law and order affected areas of KP and overall law and order situation in the
major reason for increase in losses. He said in campaign against gas pilferers, SNGPL has made efforts
to stop gas pilferage in Kohat Division especially in the oil and gas producing zones. He said the KPK
government has also been asked to take concrete steps in this regard. He said a bill is also lying with
the NA standing committee suggesting measures to stop pilferage of gas. To a question, Kamal
informed the House that the government is close to finalizing an agreement for import of LNG from
Qatar. He said Pakistan State Oil, the government’s designated LNG buyer for LNG import to Pakistan,
is currently engaged in discussion with Qatar Gas on the terms of LNG sale and purchase agreement.
He said a team from Qatar is also in Pakistan for this purpose. He said it will be a long-term agreement
and hoped that Pakistan will get best ever price in this region with Qatar gas. He said the government
is also focusing on making new oil and gas discoveries. Kamal told the House that as a result of
reduction in oil prices at international level, the government continuously passed on its benefits to the
consumers at all levels.

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Time for Accountability: Fight against corruption a collective duty, says NAB chief
National Accountability Bureau (NAB) Chairman Qamar Zaman Chaudhary said on Tuesday that the
fight against corruption was a collective social responsibility as the Bureau could not fight war against
corruption alone. “The dream of a corruption free society will remain elusive unless the whole nation
says “no to corruption”, he said while addressing a seminar on “Accountability–vital pillar of good
governance”, organized by NAB at Bahria University. The Chairman NAB said good governance was
to get maximum benefit at the cost of minimum loss in a transparent and equitable manner. Good
governance called for the economic utilization of available resources for the uplift of people and was
the responsibility of the government, he added. Qamar Zaman Chaudhary said
accountability/answerability could be in various forms and shapes. He gave the example of financial
accountability through the Accountant General or legislative accountability through legislatures or
media accountability. For the other parts of NAB even if it was to arrest a criminal and bring him
before the court of law it would be an initiative leading to accountability. He said NAB was providing
a part of accountability mechanism in the country and its ordinance empowered the examination of
existing laws to eliminate the loopholes of corruption. NAB has sent its recommendations to Federal
Board of Revenue (BFR) for elimination of loopholes in tax laws. He said NAB has revived and
reintegrated its awareness and prevention drive because it felt elimination of corruption required a
broader and a more long term approach. Cooperation of ordinary citizens was sought through utility
bills, seminars, slogans and other awareness drives, he added. He said in 2014, 19,999 complaints were
lodged with NAB which was the reflection of the people’s trust. Qamar Zaman Chaudhary said PILDAT
has rated NAB prosecution success rate in courts to be 70 percent. Chief guest Justice (Retired) Mian
Muhammad Ajmal also addressed the seminar and gave away souvenirs to the guests.
Employee remanded to NAB in corruption case
A local accountability court on Saturday remanded an employee of the National Accountability
Bureau Khyber Pakhtunkhwa into the bureau’s custody for seven days in a corruption case. Judge
Ibrahim Khan directed the relevant officials to produce the suspect, Gul Khitab, a NAB office assistant,
on May 9. The NAB arrested the suspect on Thursday on the charge of receiving bribe by
impersonating as an assistant director (investigation) from a corruption suspect. A NAB prosecutor told
the court that the suspect had received Rs.200,000/- as bribe from a municipal officer in Abbottabad,
Mahbub Ali Shah, who was currently in the bureau’s custody. He said the suspect had assured the
municipal officer that corruption charge against him would be dropped. The prosecutor requested
the judge to grant the physical custody of the suspect to NAB for interrogation. Lately, Mahbub Ali
Shah told the NAB that he had already paid money to the suspect. The municipal officer also
recorded his statement before a judicial magistrate on April 27 claiming the suspect asked him to visit
the NAB offices in connection with an ongoing inquiry against him. Mahbub alleged that the suspect
posed himself as an assistant director (investigation), Umair Butt, and told him that the inquiry against
him would be closed if he paid him bribe. He alleged that the son-in-law of the suspect, Niaz
Mohammad, accompanied by another person visited him in Abbottabad and received Rs.210,000/-
bribe, including four Rs.50,000/- cheques and Rs.10,000/- cash. Mahbub said he was surprised that
after few days, he was arrested by the NAB and learned that the suspect was an office assistant and
not assistant director at NAB.

May 2015
43
NAB wants supra-tax regulator
The National Accountability Bureau (NAB) has forwarded a novel set of recommendations to the
prime minister proposing establishment of the Pakistan Revenue Regulatory Authority (PRRA) for
imposing taxes while limiting the role of the Federal Board of Revenue (FBR) to tax collection. The
prevention committee on tax evasion recommendations were drafted in meetings held between mid-
March and April period to stop the menace of large scale tax evasion in the country. The committee
was headed by Deputy Chairman of NAB Rear Admiral (Retired) Saeed Ahmad Sargana and included
representatives from FBR, SBP, FPCCI, ICAP, PTBA, and TIP. It recommends the PRRA to be fully
autonomous in making laws for revenue generation while working directly under the prime minister.
The tax appellate authorities should be removed from subordination of FBR and work under the
ministry of law. While the members of the appellate tribunals should be appointed and work under the
respective high courts. The committee recommends limiting powers of FBR to just an implementing
agency. The tax machinery under the control of the executive is an obvious impediment in providing
fair and quick justice to the harassed and bonafide taxpayer. It recommends stress immediate
automation of FBR through the implementation of ERP software. It will reconcile all kind of data, sale
purchase of shares, property, saving certificates, dividends and registration of vehicles and will help
unearth the non- taxpayers. It calls for withdrawal of Section 111 of the Income Tax Ordinance 2001
related to foreign remittances and assets. The government should draft appropriate laws to seize local
assets in equivalent value to levy appropriate taxes if assets outside the country or the source of
income could not be established. Bearer certificates and prize bonds worth Rs.7,500/- should be
issued in name with NIC numbers. The federal government should work with the provincial
governments to create bi-annual or annual real estate market rates to evaluate the property price for
taxes and levies. GST should be imposed in VAT mode. Accountability in tax administration should be
introduced to reduce the rampart corruption and inefficiency. The recommendations call for
immediate combined audit of all the telecom companies to plug the revenue leakages. All the
telecom recharges should be through the prepaid cards, which should be printed at the Pakistan
Security Printing Press. The top-up balance recharge should also be through pre-paid cards. The FBR
should be given online access to the system of telecom companies. The committee has only
recommended forensic audit for the other sectors, textiles and manufacturing. Unlike the telecom
sector, the committee has waded away from castigating the major tax evading sectors like the power
companies, sugar mills, cement, and wholesalers.
NAB to launch probe into funds embezzlement
Chairman National Accountability Bureau (NAB) Qamar Zaman Chaudhary has taken serious notice of
misappropriation of funds allocated for the renovation of national poet Allama Iqbal’s home in
Sialkot, The Nation has learnt. The Chairman has ordered Director General NAB Lahore to investigate
the issue and submit inquiry report in this regard. A senior official of NAB informed this scribe that the
government allocated millions of rupees for repairing the deteriorating residence of Allama Iqbal. He
mentioned that Chairman NAB took notice of negligence of relevant departments which did not
bother to investigate the issue. He passed the instructions to DG NAB Lahore Major Burhan to probe
the issue and bring all those involved in corruption to book. He ordered the DG NAB to point out the
irregularities and recovered the whole amount from accused persons and play his role in the
renovation of the Allama Iqbal’s home. Talking to The Nation DG NAB Lahore, Major Burhan confirmed
that the Chairman had ordered him to investigate the issue and submit the inquiry report without
wasting time. He said that there was no doubt of this being a national issue and corruption would

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bring shame for the entire nation. Responding to a question about the amount allocated for
renovation, the DG said he was not aware about the exact amount but he has constituted an
investigation team comprising two senior officers of NAB. He mentioned that the investigation team
would visit the site on Monday and dig out the issue and estimate the allocated funds for renovating
the building. He said NAB will investigate this issue thoroughly and also meet the representatives of
responsible departments for investigation. He said that NAB will not spare anyone who will be found
involved in this case. He mentioned that NAB will be in position to submit a brief inquiry report to
Chairman NAB at the end of next week.
LNG: hushed and hurried
There is no doubt over the benefits of including LNG in the country’s energy mix. What needed is the
diversification of the energy mix which is currently skewed towards furnace oil. LNG is not only a
cleaner fuel but also more efficient than FO in power production. It can also be used in fertilizer
production and as CNG for transportation. LNG can fill the widening demand-supply gap of
indigenous natural gas whose supply has stagnated at 4 bcfd for the past decade whereas the
demand has risen to 6 bcfd. Any form of gas coming in is better than other hydrocarbons–whether it is
from Iran-Pakistan gas pipeline, TAPI, imported LNG or by enhancing domestic production of gas. Of
course the most desirable option would be exploring more gas at home–but nothing has happened
for the past many years owing to poor power policies with low price incentive to explore and extract
new fields, especially when it is in troubled areas. There are estimates of untapped potential but no
significant new discoveries have surfaced for many years. E&P companies globally are known for
working in troubled areas and are well equipped and experienced in handling associated risks, if
appropriately covered in prices. What needs to be understood is that the imported LNG costs twice as
much as the price of indigenously excavated natural gas and power policies must match these
prices. The new policy is deemed to be good but it may take years to reap any benefit. The IP
pipeline (750 mmcfd) has been delayed for many years owing to sanctions on Iran. Improved US-Iran
relations have generated some hope for that project but the sanctions have not been lifted as yet.
Hopefully, the US-Iran deal on the latter’s nuclear ambitions will persevere and the Iran-Pakistan gas
pipeline will become a reality. But it will take about three years even after that to import gas, through
that route. Similarly, security issues are impeding 1,325 mmcfd TAPI gas pipelines which will not take
less than four years to start pumping gas even if the project begins today. So what to do now?
Importing LNG is the answer in the short to medium term to bridge the energy gap. BR research is
totally sold on the idea of importing LNG and appreciates the government’s efforts on that front. But
there are many ambiguities in the way in which the government has handled the whole episode of
LNG imports and its usage. The private sector has been left out of LNG based power projects while
only Punjab and Federal governments are executing the projects. Decisions were taken in haste and
these have created inefficiencies. Why has the government been so eager to have the first shipment
by March even while coordination amongst various authorities was missing and there was not enough
dredging to handle Q-flex ship loaded of LNG? The unnecessary secrecy kept on the LNG pricing has
created doubts amongst critics. Why has the ministry of water and power not shared the information
in the public domain? Then the vested interest of certain lobbies to push to have all the projects in
Punjab and this has created quite a stir over LNG import. In our view, the lack of transparency in the
LNG deals has made them susceptible to criticism and if handled better, these could have well been
jewels in the government’s crown. Having said so, the issues pertaining to LNG power plants are

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serious and there are many skeptics of the completion timeline of 2017.One fears that these projects
may suffer the same fate as coal power projects before them.
Pakistan pins hopes on gas imports, but snags slow progress
The government plans to install new gas import terminals and pipelines to underpin an economic
revival linked to $46 billion in Chinese deals but its ambitions are being undermined by poor planning,
price uncertainty and security concerns, industry experts said. The government wants to increase
imports to fuel industry expansion and reduce daily blackouts. It also aims to boost domestic gas
production in the long term. For that to happen, energy executives said the government must
regulate the sector better, be more consistent in dealing with foreign firms and forge ahead with
tapping big deposits in the province of Balochistan where insurgents regularly clash with government
forces. “The security situation should not deter exploration,” said Shahid Sattar, a former member of
the government’s Planning Commission. “But the government has a history of reneging on signed
contracts which creates uncertainty.” Pakistan’s 180 million citizens badly need more gas. It accounts
for about half of the country’s energy requirements and can fuel four out of every five cars. Pakistan
has shale gas reserves of 105 trillion cubic feet, the US Energy Information Administration estimates,
enough for around 50 years of supplies at the current rate of consumption. Yet Pakistan only
generates about four billion cubic feet of gas a day, less than two-thirds of its needs. Power cuts often
last at least eight hours a day. In the winter there is sometimes not enough gas to heat homes or cook.
Filling stations frequently close. Changing that will take time. A spokesperson for the ministry of water
and power said the government was reviewing 225 energy concessions to “incentives owners and
shareholders for production.” Gas-rich Pakistan is not as attractive to investors as oil-rich countries,
since oil can more easily be taken to market. For now, the government envisages imports as its main
new source of supply. Shallow waters: Pakistan’s first liquefied natural gas (LNG) terminal, finished on
time and on budget, began receiving shipments last month. The government plans to construct two
more and connect them to pipelines to be built by state-owned Russian and Chinese companies.
“This expansion will have a huge impact,” said Mobin Saulat, head of state-run Inter State Gas
systems, which oversees the pipelines. “We are looking at roughly enough gas supply to take care of
the existing shortfall.” Pakistan hopes to expand one of the pipelines to link up with Iran’s rich,
underdeveloped gas fields if US sanctions designed to check Iran’s nuclear program are lifted.
Already, though, the first import terminal faces problems. The channel leading from the sea is too
shallow, and needs dredging before big LNG tankers can enter. Until the dredging is done, and the
row over who pays for it settled, Pakistan cannot sign an import deal with Qatargas. Analysts say now
is a good time to commit to a long-term agreement as prices have plunged. Desperate for gas,
private businessmen funded Pakistan’s first small shipment of LNG, but there is no mechanism for them
to sell the gas onto the domestic market. Power plants are also reluctant to sign deals because they
do not know which charges the regulator will include in the price it sets on imported gas. “Supply
chain hiccups are inevitable,” said Talha Khan, assistant manager at K-electric, Pakistan’s biggest
private electricity company. “The main problem is we can’t commit until there is transparency on the
price.” One of the two planned terminals will be at Gwadar Port. That should link to a $1.7 billion
pipeline to be built by the China Petroleum Pipeline Bureau, part of the $46 billion package of deals
announced by China’s President Xi Jinping this month. That pipeline could be extended to Iran’s deep
sea South Pars gas field. After sanctions are lifted, Saulat said, it would take Iran three years to
develop enough gas to fill the pipeline, though some industry experts say it will take longer. The third
terminal is planned near the existing one in Port Qasim, near Karachi. Saulat said Russian company

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Rostec is interested in building a pipeline running to the wealthy province of Punjab. Rostec is under US
and EU sanctions over Ukraine.
Technical Updates/National News
SECP News (www.secp.gov.pk)
SECP initiates four show-cause proceedings for non-compliance
The SECP’s Corporate Supervision Department, while ensuring corporate and allied laws, has initiated
four show-cause proceedings against companies for providing shorter notice period for holding
annual general meeting (AGM), non-compliance with employees’ provident funds rules and not
attaching statement of materials facts with the notice of general meeting. The department
concluded 17 proceedings against the companies’ chief executives, directors and auditors. The
department also accorded approvals as well as relaxation to 10 companies from certain provisions of
the laws and rules pertaining to filing of consolidated financial statements, extension in time for
holding of AGMs, transmission of quarterly accounts through website, withholding the dividend of
shareholders who have failed to provide the computerized national identity card numbers and Group
Companies Registration Regulations, 2008. In addition, 34 investor complaints pertaining to non-
issuance of shares, non-verification of transfer deeds and non-payment of dividends were resolved.
SECP introduces guidelines for CPPI-based mutual funds to ensure consistent practices
The Securities and Exchange Commission of Pakistan (SECP) has issued requirements for management
of internationally renowned Constant Proportion Portfolio Insurance (CPPI) methodology based mutual
funds to ensure sustainable growth of CPPI strategy based funds. The CPPI methodology based funds
have been launched by asset management companies (AMCs) in recent years. The requirements
introduced through the SECP’s Circular No.18 of 2015 seek to ensure investor protection, improved risk
management, enhanced disclosures and thereby promote healthy development of the country
mutual funds industry. These funds aim to preserve capital at maturity of the fund while providing
exposure to equity market or other assets, based on CPPI methodology, which is formula-based
investment criteria. While there is standard formula for making investments, there are some variables,
which were determined by the AMCs at their discretion. The specific measures are imposition of limits
on the exposure that a fund may take in risky assets such as equity which results in risk mitigation;
minimum time and magnitude for rebalancing of investment portfolio resulting in consistent approach
across the industry; enhanced disclosures to improve transparency and investor protection; equitable
treatment of investors of both CPPI funds and underlying funds in case exposure by CPPI based fund
of funds is achieved through other funds and formulation of liquidity management policy by the AMCs
board of directors for timely entry and exit.
Equity oriented mutual funds are eligible to invest in REITs: SECP
The Securities and Exchange Commission of Pakistan has clarified to the Asset Management
Companies (AMCs) that equity and equity oriented schemes (i.e. equity, balance and asset
allocation schemes) are eligible to invest in the units of Real Estate Investment Trusts (REITs) subject to
compliance with other regulatory provisions for mutual funds. The said clarification through SECP’s
Circular No.19 of 2015 would lead to increased diversification by such mutual funds through
investment in a new asset class with different risk and return characteristics. It would also provide an

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opportunity to the investors to avail exposure to REITs through mutual funds with small investment
amount. Given that AMCs have been in the business of managing money of public for long and have
a better understanding of their needs, it will result in improved disciplining of upcoming REITs owing to
institutional investment through mutual funds.
SECP expanding eServices to encourage corporatization
The SECP’s eServices is aimed at facilitating the online availability of name, online incorporation of
companies and e-filing of statutory returns, and enables the promoters and other officers of the
company to interact online using the eServices portal, without visiting the SECP. eServices filing facility
is an easy and hassle-free mode of submission, coupled with an added feature of lesser fees as
compared to manual filing. Foreign companies have especially welcomed this initiative. Mr. Mahboob
Ahmad, in charge of the CRO, said this while addressing a seminar on e-governance regime and
benefits of corporatization at the District Bar Association in Faisalabad on Friday. He enumerated
various actions taken by the SECP to facilitate the corporate Sector. He made a detailed presentation
on eServices project covering the relevant provisions of the company laws, especially highlighting
different aspects of incorporation of companies and post-incorporation statutory compliance. He said
that the corporatization benefits the companies because they are treated favorably by financial
institutions and they get stronger by having a system of checks and balances. The corporatization also
strengthens the national economy. Mr. Muhammad Asghar Baig, deputy registrar, SECP, explained the
technical aspects of various steps of online filing of documents in eServices, including availability of
name, steps/procedures for online incorporation and e-filing of various statutory returns. The
participants included lawyers and executive members of the bar. Mr. Malik Muhammad Ayub Sialwai,
president, District Bar Council, and the executive members of bar, appreciated the SECP’s efforts for
the development of corporate sector.
SECP forms committees to resolve insurance-related disputes
The Securities and Exchange Commission of Pakistan (SECP) has approved the publication of
proposed rules, envisaging the formation of committees for resolution of small disputes between the
insurers and the policyholders. Through these rules, three committees will be formed in Islamabad,
Lahore and Karachi, and each committee shall consist of three members, i.e. a senior chartered
accountant, a lawyer and a representative of the Insurance Association of Pakistan (IAP). The purpose
of these rules is to provide maximum relief to the insurance policyholders or their legal heirs in case any
dispute arises between them and the insurers. At present, there are two other grievance forums to
redress complaints of the policyholders, which are the federal insurance ombudsman and the
insurance tribunals. Amid many other developmental initiatives of the SECP for the insurance industry,
a need was felt to reconstitute the existing dispute resolution committee with adequate powers and
enhanced jurisdiction with respect to the sum insured of the disputed insurance policy. The SECP is sure
that the reconstitution of the dispute resolution committees will complement the existing grievance-
resolution forums (ombudsman and tribunals). The outreach of these forums will be expanded, and
the aggrieved policyholders will have a fast track and free-of-cost remedy to their grievances right on
their doorstep. However, the SECP would greatly appreciate the public’s feedback to improve the
proposed rules.

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Brokers escape abroad: assistance of international agency required, Chairman SECP
The Securities and Exchange Commission of Pakistan (SECP) has reiterated its firm determination to
bring back the sponsors and directors of ACE Securities Private Limited and Eastern Capital Limited to
the country and to ensure that the affected investors are adequately compensated. Mr. Zafar Hijazi,
the SECP Chairman, said in a statement issued in Islamabad on Thursday that at the moment, SECP’s
focus is on bringing the sponsors and directors back and for that purpose a letter has been written to
the chairman of National Accountability Bureau (NAB). Considering the seriousness of the matter, the
Chairman SECP, later also met him to get the process expedited. During the meeting the Chairman
SECP suggested that assistance of an international agency may be sought for the extradition. To
underscore his resolve in this matter, the Chairman SECP said that the four corners of the world would
be searched to find the culprits. Mr. Hijazi said that we are aware of the concerns being expressed in
this regard. An internal exercise is also being carried out to determine if anyone at the SECP showed
any laxness. Also, if there is a flaw found in the system of the SECP or KSE, it would also be fixed without
any delay, said Chairman Hijazi. Chairman SECP has deeply appreciated the prompt instructions of
Chairman NAB to his team to immediately start taking necessary actions in a determined way.
State Bank of Pakistan News (www.sbp.org.pk)
State Bank of Pakistan Organizes International Conference on “Affordable Housing &
Mortgage Finance”
A two-day International Conference on Affordable Housing & Mortgage Finance organized by State
Bank of Pakistan (SBP) was inaugurated today in Islamabad. The Conference aims to discuss
innovative strategies and solutions to increase outreach of housing finance to low and middle income
groups. At the beginning of the conference a message from the Prime Minister, Mian Muhammed
Nawaz Sharif, was read by the Deputy Governor, Saeed Ahmed. The Prime Minister said, ‘Pakistan is
currently confronting a massive challenge of housing backlog of around 9 million units, out of which, a
large part pertains to the economically disadvantage families and members of the lower middle
class. This, coupled with a weak governance regime of urban civic institutions, has resulted in the
mushroom growth of katchi abadies and slums/squatter settlements in major metropolitan areas. In
line with the manifesto of PML(N), our Government is fully committed to resolve the issue of housing
shortage in the country particularly for the low income groups. It has announced a comprehensive
housing finance scheme which includes construction of 1000 clusters of 500 houses each for low
income families all over the country. To ensure cost-effective access to credit for housing, government
has undertaken to pick up a portion of the cost of financing on behalf of the borrower over and
above 8 percent under this program. While addressing the audience, Mr. Akram Khan Durrani,
Federal Minister for Housing & Works who chaired the inaugural session, appreciated the steps taken
by SBP to promote housing finance. He stated that the provision of affordable housing and mortgage
finance are paramount to cope with rapid urbanization. He highlighted the various efforts by the
government to come up with affordable solutions particularly for people belonging to low income
strata and kachi abadis. He stated that SBP is actively involved in supporting the sector. He
emphasized that if proper planning is not undertaken for urbanization it may lead to serious problems.
Governor State Bank of Pakistan, Mr. Ashraf Mahmood Wathra, in his policy address shared SBP’s policy
framework for enhancing the flow of financial services to middle and low income groups. Mr. Wathra,

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while asserting the importance of housing and housing finance for the economy, said that the country
is witnessing rapid urbanization and escalation in property prices with increasing shortage of housing
units especially for low and middle income groups. In the absence of a sound and vibrant housing
finance system, we can expect the situation to further deteriorate. He appreciated DFID, World Bank,
AFG and CSAPs for their support in SBP/Mof efforts to improve upon financial inclusion in the country.
He further added that housing finance is one of the critical elements to make housing affordable for
the new entrants and existing incumbents of major metropolitan cities. The lack of effective
institutional framework, secondary mortgage market, high transaction costs, unorganized real estate
sector, inadequate property development framework and long term funding arrangements are some
of the major constraints in the growth of housing and housing finance in the country. Earlier, Mr. Saeed
Ahmad, Deputy Governor, State Bank of Pakistan in his welcome address highlighted the importance
of housing and housing finance for the long term sustainable economic growth. He stated that in
Pakistan house financing is less than ½ percent of GDP which is one of the lowest in the world. ‘We
have currently 9 million unit shortfall. Each year there is need for 600,000 units but only 300,000 units
are constructed. This adds 300,000 number of units to shortfall, he said. In order to increase housing
finance to 10 percent of GDP over next 10 years we have to finance some 300,000 units per year. He
stressed on the need of bringing innovation in the existing system and increasing the outreach of the
housing finance to low and middle income groups. The conference was attended by over 300
participants including CEOs/Presidents/Executives of banks, MFBs, Multilaterals, Representatives of
Builders and Developers and Business Associations, and Academia. Expert speakers on housing
finance from around the world and home are participating in the event.
SBP Issues Monetary Policy Decision for Next Two Months
Macroeconomic conditions towards the end of FY15 have further improved compared to the
beginning of the fiscal year. Current account deficit has narrowed down; average annual inflation is
significantly below the target; there is a marginal uptick in real GDP growth; and foreign exchange
reserve buildup continues. All these developments were reflected in the recent upgrades in outlook
by international rating agencies that have further improved investor confidence. The current
macroeconomic stability achieved through domestic policies and favorable external developments
provide an opportunity to focus on reforms that will put the economy on sustainable growth path.
With contraction in imports, led by sharp decline in oil prices, and strong growth in remittances, the
external current account deficit at $1.4 billion during Jul-Apr FY15 is around half of the deficit
recorded in the corresponding period of last year. The improvement has overshadowed lower surplus
in capital and financial account, especially weak foreign private investment. Overall, this has
supported the reserve building efforts with net SBP reserves rising from $9.1 billion as of 30th June 2014
to $12.5 billion as of 15th May 2015. They are expected to increase further due to subdued outlook of
international oil prices, successful continuation of IMF program, and realization of expected official
foreign inflows. Increase in foreign private inflows can further strengthen this outlook and sustain
stability in the foreign exchange market. The inflation continues with its downward trajectory in this
fiscal year. The year-on-year CPI inflation has declined to 2.1 percent in April 2015 from 8.2 percent in
June 2014. The decline in inflation during the current fiscal year has been broad based as all the
headline and underlying measures of inflation have recorded deceleration. Soft international
commodity prices, stability in exchange rate, contained government borrowings from SBP, moderate
aggregate demand, and SBP’s earlier conservative monetary policy stance have remained the key
factors in controlling inflation this year. Going forward, continuation of inflation at lower levels is

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reflected in the latest IBA-SBP survey of May 2015 that reports subdued inflation expectations.
However, uncertainty about international oil prices and possible adjustment in domestic energy prices
are the main risks to this inflation outlook. Credit growth during Jul-Mar FY15 has remained well
diversified in terms of coverage and type of finance. All three sectors of the economy–agriculture,
manufacturing and services–availed credit both for working capital and for fixed investment
purposes. The highlight remains the loans to private sector businesses in fixed investment category that
increased to Rs.84.4 billion in Jul-Mar FY15 from Rs.50.3 billion in the same period of last year.
However, owing largely to decrease in commodity prices, loans in the working capital category
dropped to Rs.90.3 billion in Jul-Mar FY15 from Rs223.8 billion in the same period of FY14. Improving
investor confidence, buoyant construction activity, continuous stability of the banking system, and the
recent monetary easing are expected to positively impact credit uptake in the coming months. Broad
money (M2) has expanded by 7.3 percent during July 01-May 08, FY15 against 7.0 percent during the
same period last year. Importantly, the contribution of Net Foreign Assets in the expansion of M2
continues to remain substantial. This has favorably impacted the Net Domestic Assets-to-Net Foreign
Assets ratio. The favorable improvement in this ratio is expected to continue with the availability of
anticipated external flows. M2 is likely to grow within the safe limits; consistent with the inflationary
outlook. After remaining tight during most of the current fiscal year, liquidity conditions at the back of
overall improvement in balance of payments have relatively eased towards the end of FY15. The
money market overnight repo rate, on average, remained 49 basis points below the SBP’s policy rate
in the post March 2015 monetary policy decision compared to 33 basis points in the post January 2015
decision. These developments bode well for the smooth transmission of policy rate changes to other
market interest rates in addition to the implementation of the revised interest rate corridor framework.
In line with monetary policy stance, market interest rates have fallen since January 2015. With current
trends in key macroeconomic variables, money market liquidity is expected to remain at ease in the
coming months. Real GDP is provisionally estimated to have grown by 4.2 percent in FY15, slightly
higher than 4.0 percent in FY14. Overcoming energy shortages and improving law and order
conditions is expected to provide further impetus in reviving investment and higher production.
Gradual realization of planned investment in energy and infrastructure projects will provide additional
boost to growth. Consequently, growth is expected to be revived at a relatively faster pace going
forward. Given the above macroeconomic considerations, SBP Board of Directors has taken the
following decisions effective from 25th May 2015: 1. Ceiling rate of the interest rate corridor is reduced
by100 basis points from 8.0 percent to 7.0 percent. 2. A new “SBP target rate” is set at 50 basis points
below the ceiling rate. SBP will ensure that the overnight rate remains close to this target rate. This will
be the main Policy Rate of SBP. Width of the interest rate corridor is reduced by 50 basis points from
250 to 200 basis points. Consequently, the floor rate is set at 5.0 percent.
Finance Minister launches National Financial Inclusion Strategy for Pakistan
The Federal Finance Minister, Senator Mohammad Ishaq Dar, today, launched National Financial
Inclusion Strategy (NFIS) for Pakistan at Islamabad. The objective of the strategy is to build momentum
and push forward reforms to achieve universal financial inclusion in an integrated and sustained
manner. While sharing the vision, Mr. Dar said “Government is striving to create more opportunities of
doing business and make the common people of Pakistan self-reliant and economically
empowered.” In this regard, the government is working at various levels to improve governance and
availability of energy and other key infrastructure inputs, he further said. He highlighted that the recent
historic agreement for creation of Pak-China Economic Corridor is an economically vital plan devised

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to help drive Pakistan’s economic growth. The economic corridor will connect economic agents and
link economic centers with large resources which can be cultivated for job creation. While
emphasizing the need for increasing access to fair and dignified financial services to achieve
sustainable economic growth, the Finance Minister said that the NFIS, championed by the State Bank
of Pakistan, is consistent with the Government of Pakistan’s Vision 2025, which calls for enhancing
access to credit for SMEs and focuses on strengthening & deepening of financial inclusion in the
country. He regretted media speculations regarding imposition of tax on remittances in forthcoming
federal budget and categorically stated that no such proposal was under consideration by the
federal government. He further pointed out that the Government is already working on some of the
drivers that the NFIS identifies to catalyze financial inclusion. In particular, digitization of payments is a
priority area and resolute efforts have been taken to support the digitalization of payments and give
depth to financial services among various segments of the population. He shared that Pakistan has
become a member of the Better than Cash Alliance-a global initiative. The contribution of branchless
banking is significant when it comes to channelizing the Government-to-Person payments. Finance
Minister emphasized the stakeholders to show their full commitment and active engagement to
increase access and quality of financial services for the underserved segments of the economy and
help to build a sustainable and prosperous Pakistan. Speaking at the occasion, Mr. Ashraf Mahmood
Wathra, Governor SBP said that since the early 1990’s, Pakistan’s financial sector has witnessed
considerable reforms that have significantly strengthened its soundness, profitability, efficiency and
diversity. Also, Pakistan has been a pioneer in championing financial inclusion for over a decade and
achieved a large number of significant milestones. In particular, the creation of a regulatory
framework for Microfinance Banks in 2001; the expansion and modernization of online credit
information bureau (e-CIB) in 2005; the adoption of Branchless Banking Regulations allowing a tiered
approach to know-your-customer (KYC) requirements in 2008; the launch of Financial Inclusion
Program under DFID support which includes risk sharing initiatives, smart grant facilities for capacity
development, innovation and market infrastructure development in 2008; the establishment of a
specialized microfinance credit information bureau (m-CIB) in 2009; and the launch of a nationwide
Financial Literacy Program in 2012. He pointed out that despite the sustained efforts, the level of
financial inclusion remains very low and there are a number of reasons for the low level of financial
inclusion. He shared that the persistence of financial exclusion in the face of long-standing efforts to
promote inclusion pointed the need for a comprehensive National Financial Inclusion Strategy. The
strategy has thus created the needed platform for SBP, GoP and private sector to adopt and
implement a comprehensive set of coherent and sequential reforms needed to influence financial
inclusion in a big way. He further shared that globally, there is an increasing trend towards adoption of
financial inclusion strategies with explicit financial inclusion targets at country level. Empirical evidence
suggests that, having a NFIS could double the pace of progress on financial inclusion targets. The NFIS
will guide efforts to promote financial inclusion over the coming five years. It includes targets and
objectives that will be monitored, but it will serve as a living document that can be adjusted as
required. On this occasion, Mr. Saeed Ahmad, Deputy Governor, State Bank of Pakistan while making
a detailed presentation said that about 50% of the entire population is completely financially
excluded with no access to financial services such as formal savings, payments, deposits, and credit,
therefore, financial inclusion is a priority area for government and SBP. He also shared various initiatives
taken by government and SBP to promote financial inclusion in Pakistan. He hoped that with
successful implementation, the country will achieve its targets for a financially inclusive Pakistan. He
said that to advance financial inclusion, over 50 countries have set national commitments and
tangible targets for financial access. Pakistan has now also developed national financial inclusion

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strategy which lays sound foundations for financial inclusion for the next 5 years. It identifies the gaps
leading to persistent financial exclusion and sets out the national vision and roadmap to accelerate
financial inclusion. NFIS also identifies high-impact areas, assigns responsibilities, and provides targets
and objectives that will be monitored. He hoped that with successful implementation, the country will
achieve its targets for a financially inclusive Pakistan. The ceremony was attended by local and
international dignitaries including members of NFIS council, Presidents of banks, government officials,
representatives of donor agencies, and large number of private sector representatives.
Agricultural credit disbursement surges to Rs.368.7 billion in the first ten months of FY15
During the first ten months of current fiscal year (July 2014 - April 2015), banks disbursed Rs.368.7 billion
which is 73.7% of the overall annual target of Rs.500 billion and 28% higher than disbursement of
Rs.288.4 billion made during the corresponding period last year. The outstanding portfolio of
agricultural loans has also surged by Rs.35.6 billion or 12.7% i.e. from Rs.280.7 billion to Rs.316.3 billion
at end April 2015 as compared to same period last year. Five major banks as a group disbursed
Rs.186.9 billion or 74% of their annual target and two specialized banks (ZTBL & PPCBL) disbursed
Rs.71.2 billion or 70.1% of their annual targets of Rs.101.5 billion. Fifteen domestic private banks
collectively disbursed Rs.81.8 billion or 70.8% against their target of Rs.115.6 billion. Eight microfinance
banks disbursed Rs.24.2 billion or 85.9% of their annual targets whereas the four Islamic banks as a
group have already surpassed their annual targets by disbursing Rs.4.6 billion against the target of
Rs.2.3 billion during the period under review. Amongst the five major banks, HBL achieved 85.8 % of its
annual target, MCB achieved 83.8%, UBL 81.3%, NBP 63.4% while ABL could achieve only 55.5 % of its
individual annual target. Under the specialized banks category, ZTBL disbursed Rs.64.8 billion or 72 %
against its target of Rs.90.0 billion while PPCBL disbursed Rs.6.3 billion i.e. 56 % against its target of
Rs.11.5 billion during the period under review. Within fifteen domestic private banks, Bank of Khyber
achieved 92.6%, Faysal bank achieved 92%, JS bank 90.2%, NIB bank 64.7%, Sindh Bank 62.8%, Bank
Al Habib 59.6%, Bank Alfalah 58.7%, Soneri Bank 55.2%, Bank of Punjab 54.5%, Silk bank 54.2%, Summit
bank 52.9%, Habib Metropolitan Bank 52.1% while Askari bank achieved only 43.5% each of their
annual targets during Jul-Apr 2015. Standard Chartered Bank has already surpassed its annual target
of Rs.2.5 billion by disbursing Rs.5.8 billion during the period.
SBP Releases its Second Quarterly Report for FY15 on the State of the Economy
After facing some difficulties in the initial months of the fiscal year, the economy ended the first half of
FY15 with some positive developments, says the second quarterly report of the Central Board of
Directors of the State Bank of Pakistan presented to the Parliament today. These positive
developments include a decade low inflation; contained budget deficit along with its improved
financing mix; comfort in balance of payments mainly on the back of sharp decline in global oil
prices; increase in forex reserves; and stability in the exchange rate. However, the report comments
that the persistent structural weaknesses, particularly energy shortages, low FDI, losses of PSEs, and low
tax-to-GDP ratio still continue to take a toll on the country’s overall economic performance. ‘In order
to address these issues and to put the economy on a higher growth trajectory, bold policy measures
along with better overall governance are inevitable,’ the report concludes. The report presents a
detailed analysis of various sectors of the economy, with some the key observations as follows.
Preliminary information about the real sector suggests a mixed picture of the economy. Prospects of a
better wheat crop, and some improvement in minor crops, are likely to offset the performance of
cotton and sugarcane. However, farmers’ income may be adversely affected by higher input cost

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(especially fertilizer), and the decline in output prices of cash crops. On the other hand, the industrial
sector is struggling with energy issues, as shown by a modest growth of 2.3 percent in the large-scale
manufacturing. Within services sector, it seems challenging for some sub-sectors (like wholesale and
retail trade) to achieve their target growth rate, while others (like banking) can perform well. The
commercial banks aggressively participated in primary auctions of longer-term securities as they
anticipated a cut in the policy rate and also took advantage of the healthy term premium on PIBs.
The government also accepted huge sums in these auctions to lengthen the maturity profile of its
debt, and to substitute some of its borrowings from SBP. This enabled the government to contain its
borrowing from SBP within the ceiling agreed with the IMF, and meet the limit of zero quarterly net
borrowing from the central bank. On the policy front, low inflationary outlook allowed the central
bank to reduce interest rate in successive monetary policy announcements from November 2014
onward. The SBP has, so far, reduced the policy rate to a decade low of 8.0 percent. SBP
supplemented its policy decisions with increased OMO injections during this period. In terms of the
country’s fiscal performance, the budget deficit as percent of GDP was 2.2 percent in the first half of
the year–slightly higher than the last year’s level. The government (federal and provincial combined)
was able to contain expenditures growth to only 4.8 percent during this period, compared with 10.7
percent in the same period a year earlier. Encouragingly, current expenditures were controlled, while
development expenditures showed a robust growth. The financing mix of the budget deficit also
improved with higher availability of external resources and less pressure on banking system. However,
revenue collection continued to be a major concern. Total revenue (federal and provincial) grew by
only 5.0 percent in the first half of the year, compared with 13.9 percent last year. Although the
government introduced several tax measures in the Budget for FY15, FBR revenues increased by only
13.6 percent during this period. The low growth in tax revenue was partly due to sharp fall in oil prices.
Pakistan’s external sector, nonetheless, benefited from the decline in oil prices. This along with strong
growth in remittances helped reduce the current account deficit in the second quarter. Financing of
the current account deficit was also easier during the second quarter of FY15 on the back of issuance
of Sukuk in the international market, successful completion of quarterly reviews of the IMF program,
and loans from IFIs. These inflows pushed up the country’s foreign exchange reserves to a
comfortable level. As things stand, SBP’s liquid reserves cover more than 3-month import of goods.
According to the report, the country would continue to experience some of the key positives in the
months ahead. Several forex inflows have realized in H2-FY15, including: coalition support fund;
proceeds from the further divesture of HBL; receipts from the IMF; and more are expected like
disbursements from the ADB, World Bank and other sources. Furthermore, remittances are likely to
maintain their robust growth for the rest of the year, and will surpass the target set for the whole year.
With this comfort in the balance of payments, the exchange rate is also expected to remain stable,
which coupled with low fuel prices, will continue to dampen inflationary expectations. SBP projects
average inflation in the range of 4 to 5 percent for the whole year, compared with the original target
of 8 percent. Further, the growth in real GDP is also expected to remain higher than last year’s level. A
better wheat crop may compensate for the sluggish performance of kharif crops. Construction is set
to improve as more PSDP funds are released by the federal and provincial governments. While the
challenges faced by LSM may continue, the overall services sector is likely to maintain last year’s
growth momentum.

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Prime Minister Launches “Credit Guarantee Scheme for Small Farmers”
Prime Minister Mian Muhammad Nawaz Sharif, today, launched a credit guarantee scheme for small
farmers at Prime Minister Office, Islamabad. “The objective of the scheme is to help our small farmers
get bank loans more easily for producing their crops”, the Prime Minister said. He highlighted that
when his government took over; the country was confronted with serious economic challenges,
energy shortage and worst security situation at that time. Since then, the government has taken
unprecedented measures to revive economy, improve law and order situation and restore investors’
confidence. While sharing the vision, the Prime Minister expressed his determination to consolidate the
gains made during the first two years of his government. He said that the initiatives like China-Pakistan
economic corridor and strengthening relationships with neighboring countries to eradicate terrorism in
the region will guarantee a strong and prosperous country. While addressing the audience, the Prime
Minister highlighted that his government manifesto gives high priority to agriculture sector and small
farmers. The scheme is a testament of government’s commitment to support the small farmers in
increasing their productivity and income levels, and spurring growth in overall agricultural sector, he
reiterated. He directed banks to actively play their due role in extending loans to small farmers and
marginalized segments of the society to enable them to contribute in socio economic development
of Pakistan. He congratulated Federal Minister for Finance and State Bank of Pakistan on their
continuous efforts for improving the lives of farmers through enhancing their access to formal
financing in the country. Prime Minister emphasized upon the need for banks to extend facilities to all
deserving small scale borrowers to help them improve their living standards and get out of poverty
trap. He reminded that last year’s payments under Income Support Program were increased from
Rs.12,000 to Rs.18,000 per annum. He appreciated the role which the banks are playing in national
economy but emphasized banks to cater the financial needs of all segments of the economy rather
than focusing on a few large borrowers. Speaking at the occasion, the Federal Finance Minister Mr.
Ishaq Dar said that the Government was fully committed to providing an enabling environment for
financing to agriculture sector and small farmers through innovative and scalable products. He
highlighted that the agri-sector has strong linkages with the manufacturing sector and high
significance for fighting poverty and generating large scale prosperity. He said that the major focus of
government’s economic program was to provide economic opportunities to the poor and previously
neglected segments of the population. He expressed the hope that the banks will respond positively
to the credit guarantee scheme to build their agri-lending portfolio and to increase their footprint in
rural areas. He expressed his satisfaction on banks performance in first 9 months of the fiscal year 2015.
He expected banks to relentlessly serve small farmers and take part in agri. finance schemes
promoted by government of Pakistan and State Bank. Federal Minister for National Food Security and
Research Mr. Sikandar Hayat Khan Bosan, said that the guarantee scheme is an important milestone
achieved by the government to support small farmers of the country. He said that growing population
and low agricultural growth, over the period, had raised new challenges in terms of malnutrition,
volatile food supply, and growing poverty levels. He expressed the belief that the scheme would help
small farmers to overcome cost related issues associated with use of quality input, transportation,
storage etc. Mr. Ashraf Mahmood Wathra, the Governor SBP said that agricultural credit market is
evolving rapidly in recent years not only in terms of outreach but also in terms of depth and quality
with diversified range of financing products, better portfolio quality, use of alternative & technology
driven delivery channels, and innovative credit methodologies. In particular, there are significant
advancements in areas like warehouse receipt financing, value chain financing, and market
information infrastructure. He said that credit disbursements to the agricultural sector was increasing

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and the sector was poised to achieve 53% of the agriculture credit demand in 2014-15 compared to
only 37% in 2009-10. He said that the credit guarantee scheme for small farmers was a targeted and
focused intervention for a well-defined segment that was currently being served by arhties and
middlemen at high interest rates. A distinguishing feature of the scheme is that it establishes banks’
participation in the credit risk, thus ensuring that banks’ due diligence standards are maintained while
lending under this scheme. On this occasion, Mr. Saeed Ahmad, Deputy Governor, State Bank of
Pakistan highlighted government and SBP’s different initiatives for the promotion of agriculture finance
in the country. He said that the Credit Guarantee Scheme will provide guarantee up to 50% of the
loan amount of small farmers, who lack collateral. The crop loans amounting upto Rs.100,000 will be
covered under the scheme. It is expected that the scheme will provide benefit to 400,000 to 500,000
small farmers in first year of launch. He further said that State Bank has a rich experience in successfully
managing credit guarantee to increase financing to microfinance, and small & rural enterprises. He
emphasized on the need to enhance the crop yield in the country which is one of the lowest in the
world. Citing a reference from United Nation’s Report, he also drew attention of the Prime Minister to
the prediction of a water crisis in Pakistan along with 16 other countries in 2025. He urged all the
stakeholders to take drastic actions for improving the water management and conservation
practices. The ceremony was attended by local and international dignitaries including representatives
of development community, Presidents of banks, and large number of farmers.
PRISM transactions show an increase of 5 percent in volume and 21 percent in value
During the third quarter of FY15, Pakistan Real-time Interbank Settlement Mechanism (PRISM) settled
198,250 transactions of value Rs.51.5 Trillion showing an increase of 5.0% and 21% in volume and value
respectively compared to second quarter of FY15. The major share in increase of number of PRISM
transactions was contributed by Interbank Funds Transfer which increased by almost 6% while
increase in value of PRISM transactions was contributed by securities settlement which increased by
almost 45%. During the third quarter of FY15, the volume and value of Internet Banking transactions
showed an increase of 10% and 6% respectively. The volume and value of Point of Sale (POS)
transactions has declined slightly by 1.4% and 3.0% compared to last quarter. The volume of Mobile
Banking transactions has decreased by 15% while its value increased by 14% as compared to the
previous quarter of FY15. Similarly, Automated Teller Machine (ATM) transactions showed a growth of
2% in volume and 6% in value as compared to last quarter of FY15. The volume of Real Time Online
Banking (RTOB) transactions showed a growth of over 6% while its value showed a slight decrease of
0.8% compared to second quarter of FY15. Non-financial transactions, during the third quarter of FY15
showed a growth of over 4%. During the third quarter of current fiscal year, the network of ATMs
continued to show a growth of 3.3% reaching to 9,312. During this quarter, 2,341 Point of Sale (POS)
machines were installed by banks showing a growth of 7% as compared to second quarter of FY15.
The number of cards issued by banks has also increased by 2% reaching the total of 26.5 Million by
the end of the quarter under review. During the current quarter, registered users of Internet, Mobile
and Call Centre banking showed a growth of 5.9% reaching to 19.7 Million by the end of third quarter
of FY15.
Depositors of the former KASB Bank start transactions with BankIslami
State Bank of Pakistan is pleased to inform that the amalgamation of the defunct KASB Bank into
BankIslami Pakistan Ltd has been implemented smoothly. As a result all the depositors which are over
150000 in number and have Rs.57 Billion in deposits are free to operate their accounts. Many of them

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have already started operating their accounts and more than 1200 employees have continued their
jobs. All the branches of the defunct bank, now taken over by BankIslami, remained open for business
on Friday, while the branches at major business centres also opened on Saturday. The customers
freely operated their accounts as per their convenience. So far, no complaint of any sort has been
reported and, in any such case, the customers may contact their respective branches or call centre
of BankIslami. Regarding some apprehensions about the amalgamation of a conventional bank into
an Islamic bank, it is clarified that the process is in compliance of Shariah. The BankIslami has planned
to gradually transfer the defunct bank’s conventional banking operations into Shariah based
operations. The customers of the bank may seek further clarifications from the bank management in
this regard. An important issue that is often debated in some quarters of the media is the notional
value at which the defunct bank has been handed over to BankIslami. In this regard, it would be
pertinent to mention that post due diligence, all the four banks which had shown interest in acquiring
the defunct bank had come out with an estimated negative equity gap of Rs.12 to 14 billion in
addition to the shortfall in Minimum Capital Requirement (Rs.10 billion). Following the international
practices, a notional value of Rs.1000 was set for the defunct bank. There are many examples of such
international practices such as the sale of Barings Bank at a price of 1 pound to ING group, Lehman
Brothers Asia Pacific business taken over by Nomura Holdings for consideration of only 2 US $ and
Northern Rock taken over by the government without any payment. State Bank of Pakistan
acknowledges the depositors' confidence in the regulator and reiterates its commitment to safeguard
the interests of depositors to ensure safety and soundness of the banking system of the country. From
now on it is business as usual.
Banks/DFIs should adopt sustainable banking practices: Mr. Saeed Ahmad, Deputy
Governor, and SBP
Mr. Saeed Ahmad, Deputy Governor, State Bank of Pakistan chaired the meeting to initiate Baseline
Survey on Environmental and Social Risk Management (ESRM) in Pakistan being conducted by
International Finance Corporation in collaboration with State Bank of Pakistan. The Deputy Governor
emphasized that environmental and social parameters are significant sources of credit, liability and/or
reputational risks and may seriously affect economic performance and long term sustainability of a
financial institution, if not properly & timely managed. He further said that green and sustainable
banking may support Government in its efforts to overcome current electricity shortfall and help
increase economic productivity. The ESRM Survey is being conducted in 17 countries. State Bank has
partnered with IFC for completion of survey in Pakistan. The results of the survey will provide insights to
State Bank for streamlining its regulatory and developmental initiatives for encouraging incorporation
of environmental and social considerations in banking practices and products. The Deputy Governor
informed the participants that State Bank has taken up green and sustainable banking as a special
developmental area for promotion of environment and social considerations in the banking practices.
This is in line with the adoption of sustainable banking practices in other central banks in the region
and globally. He further informed that State Bank has recently joined Sustainable Banking Network–an
informal association of regulators established by IFC for knowledge exchange and learning on
sustainable banking. He said that State Bank is also exploring the possibility of issuing green banking
guidelines including environmental risk management practices for the banks/DFIs. The Deputy
Governor recalled and appreciated the Environmental and Social Risk Management Guidelines
prepared by Pakistan Banks Association (PBA) in 2010 and emphasized that Banks/DFIs may build on
its initial spadework to develop their Internal ESRM Systems and adopt sustainable banking practices.

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He further remarked that State Bank has also taken a number of initiatives for promotion of
infrastructure financing of banks and reiterated commitment of State Bank to provide necessary
support for promotion of green banking. He apprised the participants that State Bank is working with a
number of multilateral agencies to undertake joint initiatives on improving financing to energy
efficiency and renewable energy projects. Dr. Afifa Raihana of IFC said that the ESRM Survey is being
conducted in several countries all over the Globe. She highlighted that the objective of the Survey is
to take a stock of capacity, business potential as well as current sustainability practices, identify drivers
and bottlenecks, assess market demand and recommend an action plan for promotion of sustainable
banking. Mr. Aamir Irshad, Head of Corporate & Investment Banking in Habib Bank Limited briefed the
participants that HBL started environmental and social measures within its corporate banking two
years back and the bank is now establishing its own ESRM set-up. He commented that the
implementation of ESRM systems is quite simple and has huge potential to provide a framework for
properly managing credit, legal and operational risks. Mr. Suhail Yaqoob Khan, Chief Risk Officer of
Bank Alfalah also shared a number of recent examples of businesses in Pakistan and globally who
suffered due to noncompliance with environmental and social standards. He said that banks have the
responsibility to avoid investments in environmentally or social hazardous businesses not only as part of
their corporate responsibility to the society but also to avoid unwanted sources of risk.
Lifting of Moratorium on KASB Bank Limited
State Bank of Pakistan is pleased to inform the depositors of KASB Bank Limited (“the bank”) that
scheme of amalgamation of the bank has been approved by the Federal Government. In terms of
the amalgamation scheme, KASB Bank Limited has been merged with and into BankIslami Pakistan
Limited. Accordingly, the moratorium placed on former KASB Bank Limited has been lifted with
immediate effect. The depositors of the former KASB Bank Limited are now depositors of BankIslami
Pakistan Limited and are free to operate their accounts maintained at the respective branches of the
former KASB Bank Limited as per their convenience. Lifting of Moratorium on KASB Bank Limited State
Bank of Pakistan acknowledges the patience shown by the depositors of the former KASB Bank
Limited as well as their confidence on the regulator during moratorium period. State Bank of Pakistan
reiterates its commitment to safeguard the interests of depositors and to ensure safety and soundness
of the banking system of the country.
Transparency International Pakistan News (www.transparency.org.pk)
Transparency International Pakistan Hit-Hard on PM’s Laptop Scheme Scam
Transparency International Pakistan expose-off PM’s Laptop scheme scam through issuing its reports
explained all weaknesses of the purchase and supply of about 4 lac laptops/tablet in next four years.
The report also justify and gave the multiple options for making a big deal of this scheme Higher
Education Commission (HEC) has arranged two consecutive meetings regarding this issue raised by
the Transparency International Pakistan (TIP) in the presence of the Dr. Mukhtar Ahmed, Chairman
HEC, Chief Coordinator and Coordinator for Fee reimbursement and provision of Laptops, Members/
representatives of both Steering and Technical Committees from Finance Division (Budget Wing),
Planning Commission, Higher Education Department Khyber Pakhtunkhwa, Education Department
Azad Jammu & Kashmir, Ministry of IT, Punjab Information Technology Board, Department of
Information, Science and Technology Sindh, along with Advisor Transparency International Pakistan.
This high level meeting was held on 12th of May 2015 while a day before Transparency International

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Pakistan has issued a letter to the Chairman HEC regarding objections and details of this PM’s Laptop
Scheme Earlier Transparency International Pakistan has also sent two letters in the month of April 2015,
mentioning about the objections and violations of rules for bidding and process of procurement for
huge quantity of laptops in next four years. The concern officials may not take the issue seriously and
tried to keep silent over the issue. But on issuing report in detail by the Transparency International
Pakistan to the concern authorities get alert and called a high level meeting for resolving the issue as
soon as they can. It is worth mentioning that the letter wrote by the chairman of TIP was also sent to
the Secretary Prime Minister, Chairman NAB, Chairman Prime Minister’s Inspection Commission,
Registrar, Supreme Courte of Pakistan and MD PPRA Islamabad. Advisor Transparency International
Pakistan, Adil Gillani while talking to the “Education Times” said that the whole scheme was running
on fake grounds and it was nothing just wastage of money. The first objection which was raised by the
TIP that the bid was not offered but given to the company which was providing laptops on higher
prices while the same laptops with brand names was available on the lesser prices. The contract was
made for four next years for providing 4 lac laptops in different phases while every computer literary
knows that the rapid change in the technology will make this laptop worthless within next three
months. This is totally against the rules of Public Procurement Regulatory Authority (PPRA). Renowned
and brand names in the field of computer technology was kept ignored while unknown company
was given a task to produce laptops in huge quantity. The Punjab government was trying to establish
an assembling unit here which was unnecessary while the same unassembled accessories can be
import from china on cheapest rates. There were number of issues and objections which needed to
be cleared but the scheme was going on he concluded. While the “Education Times” tried to contact
with the officials of HEC none of them answered about the issue.
TIP raises questions over PM’s laptop scheme
The Transparency International Pakistan has raised its concern over the Prime Minister’s (PM) laptop
scheme. A high level joint meeting of the project Steering Committee and the Technical Committees
was held at the HEC Secretariat on Monday, to probe into the matter. The Higher Education
Commission (HEC) had initiated the procurement process for the Prime Minister’s Laptops Scheme
(Phase-II) Representatives from the National Accountability Bureau (NAB), Public Procurement
Regulator Authority (PPRA) and the Transparency International Pakistan (TIP) were requested to attend
the meeting. The HEC Chairman Dr. Mukhtar Ahmed chaired the meeting. Chief coordinator and
coordinator for fee reimbursement and provision of laptops, also attended the meeting.
Representatives of both Steering and Technical Committee, the finance division (Budget Wing),
planning commission, Khyber Pakhtunkhwa Higher Education Department, Azad Jammu & Kashmir
Education Department, Ministry of IT, Punjab Information Technology Board, Sindh Department of
Information Science and Technology along with Advisor Transparency International Pakistan were also
present in the meeting. To seek trusted advisory support on the technical observations, Intel Pakistan
Country Manager Mr. Naveed Siraj was requested to attend the meeting along with Enterprise Lead
Mr. Salman Ehsan. The Committee was informed about the progress of the project and discussed all
the observations raised by the Transparency International Pakistan. During detailed discussion,
different options were discussed and all the observations were addressed and stand resolved.
Ayyan’s case: Transparency International urges NAB to take notice of faulty challan
Referring to a news report, Transparency International (TI) Pakistan has asked the National
Accountability Bureau (NAB) to take notice of the faults deliberately left in the provisional challan

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developed after investigation with Ayyan Ali, the supermodel apprehended in a money laundering
case. The TI said the news report published on May 4 mentioned that a senior official of Directorate
General of Customs Intelligence and Investigation has pointed out flaws in the provisional challan and
has informed Federal Board of Revenue’s (FBR) chairman and members about it. The senior official
alleges that the investigation officers of FBR’s Customs department deliberately left those flaws. The
senior official said Ayyan had claimed that she bought the file of a plot in a housing scheme in Rs5
million and later sold the file in Rs.50 million, which were paid to her in the form of $0.5 million, which
she was carrying at the time of her arrest. However, the investigation team never investigated the key
person in the housing society, Mumtaz Hussain. He also pointed out that the investigation team also
did not investigate the person who had left Ayyan at the airport although his face is recognizable in
the CCTV footage. The TI, referring to the report, asked the NAB chairman to take up investigation of
the case and also probe allegations against politicians, businessmen and customs officials’
involvement in the scam.
PM’s laptop scheme: TIP points fingers at laptop purchase price
The Transparency International Pakistan (TIP) has expressed its serious reservations on the
implementation of Rs.20 billion Phase-II of the Prime Minister’s Laptop Scheme whose tenders are
being invited by the Higher Education Commission (HEC), which will be opened on May 12. It is
surprising to note that the Economic Coordination Committee (ECC) approved the procurement of
the 400,000 tablets on April 15 at the cost of 25.33 billion rupees and the import cost of the detachable
tablet was approved to be $414 each, said the statement issued by the TIP. Chairman HEC Dr. Mukhtar
Ahmed asked the TIP to provide the information about the detachable tablet with specification
costing less than Rs.10,000/-, as reported in the Transparency International Pakistan’s letter to the
prime minister, it added. According to the statement, the TIP provided listed price from website of
Walmart USA which is comparatively lower than the approved price. It also stated that in case the
specifications of the ECC requires Window tablet which TIP is sure that rack price of $179 at Walmart
can be imported in Pakistan at cost less than Rs.10,000/- from the manufacturer and in case the
quantity is 500,000 it is certain that the tablet can be imported at less than Rs.7,000/- each. Moreover,
the HEC responded that specifications will be fixed for the first year for procurement of 100,000
laptops. For specification for subsequent years, it will be reviewed by the HEC for any possible
revision/modifications by the technical committee. However, the TIP did not agree with the ECC
decision to award the contract with variable specification for four years, without knowing the
specifications for the second, third and fourth year, the statement said. This approach, according to
the TIP, is a serious violation of Public Procurement Rules (PPR) 2004, which requires exact specification
to be provided to bidder. It added that the TIP feels that the four year supply to be ordered in the first
year amounts to be a collusive practice under the PPR. And if the HEC proceed with the ECC decision
to make procurement for four years, the procurement will invite mis-procurement charge under Rule
No.50.
National Accountability Bureau News (www.nab.gov.pk)
DG NAB Rawalpindi address at FAST University Islamabad
Mr. Zahir Shah, Director General (DG) NAB Rawalpindi said that NAB under the dynamic leadership of
Mr. Qamar Zaman Chaudry, Chairman NAB is committed to eradicate corruption and corrupt
practices across the country by using all its resources. He said that the menace of corruption leads to

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injustice, lawlessness and creates a sense of insecurity, hopelessness and despondency. The menace
of corruption and poverty are closely interlinked. A surge in one has a direct bearing on the other. He
said this while addressing at a Seminar at University of FAST Islamabad. He said National
Accountability Bureau (NAB) was established to eradicate corruption in a holistic and integrated
manner. He said on the directions of Chairman NAB, Qamar Zaman Chaudhry we have to redouble
our efforts to come up to the expectations associated with NAB. NAB has prosecuted corrupts and
has recovered over Rs.4.5 billion of looted public money in 2014 bringing the overall total recovery to
date to Rs.262.008 billion. The allocation from government to NAB for its working since its creation is
Rs.12.038 billion. This is only 4.5% of recoveries made by NAB. The number of complaints received in
2013 was 19900 which are double of the number of 10500 complaints received in 2014 from the
previous year. He said the PILDAT in its latest report has rated NAB’s performance at 42% based on
public survey. This compares quite favourably to 29% public confidence in Police and 26% in
Government offices working. The rate of success of NAB’s prosecution work in all courts is 70%. He said
on the directions of Chairman NAB under Awareness & Prevention Regime, NAB
Rawalpindi/Islamabad has established 4292 Character Building Societies in line with MOU with Higher
Education Commission (HEC) in different Universities, Colleges and Schools of Rawalpindi
Division/Islamabad region. NAB (Rawalpindi/Islamabad) is holding regular meetings with office
bearers and patrons of the societies and has held 15 meetings in various schools, colleges and
universities during 2015. The other speakers also stressed upon the importance of character building of
students who are our future and urged them to play their role in eradication of corruption from the
Society.
Inspector General of Police Balochistan to print NAB’s message Say No to Corruption on all
the correspondence made by Balochistan Police
On the directions of Chairman NAB, Mr. Qamar Zaman Chaudhry, National Accountability Bureau
(NAB) is aggressively pursuing “Awareness and Prevention” campaign throughout the country to curb
corruption and corrupt practices through Awareness and Prevention campaign as NAB has been
mandated under section 33C of National Accountability Ordinance (NAO) 1999 to educate and
advise public authorities, holders of public office and the community at large. To spread the message
against corruption and corrupt practices NAB has proposed Inspector General of Police Balochistan
to print NAB’s message “Say No to Corruption” on all the correspondence made by Balochistan
Police. The Balochistan Police has joined hands with NAB in its National Campaign on Awareness and
Prevention and started printing NAB’s message “Say No to Corruption” on the top of all their
correspondence/letters, supporting the cause of providing awareness to people about the ill effects
of corruption and corrupt practices across the country. Mr. Qamar Zaman Chaudhry, Chairman,
National Accountability Bureau (NAB) has welcomed Balochistan Police’s decision for printing of
NAB’s message “Say No to Corruption” on all their correspondence/letters issued by Balochistan Police
in order to spread NAB’s message “Say No to Corruption” in far flung areas of Balochistan in order to
aware people at large about the ill effects of corruption.
Executive Board Meeting
The Executive Board Meeting (EBM) of National Accountability Bureau (NAB) was held under the
chairmanship of Mr. Qamar Zaman Chaudry, Chairman NAB at NAB Headquarters. The following
decisions were made during the Executive Board Meeting (EBM). The Executive Board Meeting (EBM)
decided to file two (2) corruption references. First against Raja Pervez Ashraf, Ex-Prime Minister and

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Ex-Minster for Water & Power, Shahid Rafi, Ex-Secretary, Ministry of Water & Power/Ex-Chairman
Pakistan Electric, Ismail Qureshi Ex-Chairman PEPCO, Munawar Baseer Ahmad, Ex-MD PEPCO, Tahir
Basharat Cheema Ex-MD / Chief Executive Officer (CEO) and others in RPP case titled “M/S Techno
Engineering Services (Pvt) Ltd, at Sammundri Road Faisalabad and Summundri Road extension”. In this
case, the accused persons were alleged for misuse of authority, corruption and corrupt practices by
conducting illegal/unauthorized International Competitive Bidding in violation of NEPRA Act, illegal
and non-transparent Award of Contract for extending financial benefits to Sponsors,
illegal/unauthorized changes in terms of contract through revision of Letter of Award, in violation of
advertised criteria. Second Reference was approved against Zahoor Khattak, the then Chief
Controller of Purchase, Pakistan Railway, Saeed Akhtar, the then General Manager (Operation),
Pakistan Railway, Sameeullah Khan, the then Chief Controller of Stores (CCS), Pakistan Railway, and
Zeeshan Ahmad, Contractor/Proprietor of M/s Pak Steel Traders, Lahore. In this case, the accused
persons were alleged for violation of Public Procurement Rules, 2004. Without advertising in the press,
the officials of Pakistan Railways in connivance with the contractor namely M/s Pak Steel Traders,
Lahore awarded contract for procurement of 500 million Tons Pig Iron to M/s Pak Steel Traders,
Lahore. Thus causing millions of rupees loss to the national exchequer. The Executive Board Meeting
(EBM) decided to authorize three (3) inquiries. First inquiry was authorized against Officers/Officials of
Agricultural Department Peshawar and others namely Arbab Saadullah Khan, Ex-MNA / Ex Chairman
PMC, Saifullah Khan, Ex-Govt Servant, Usman Alam Jhagra, Public Office Holder / Ex-Chairman PMC,
Malik Muhammad Ali Sohni, Public Office Holder/Ex-Vice Chairman PMC, and others. In this case, the
accused persons were alleged for misappropriation, embezzlement of government funds in Plot Scam
of fruit and vegetable market, Peshawar. Thus causing loss of Rs.129.99 million to the national
exchequer. Second inquiry was authorized against Officers/Officials of University of Peshawar namely
Dr. Azmat Hayat Khan, Ex-Vice Chancellor University of Peshawar, Dr. Sana Ullah, Ex-Treasurer
University of Peshawar, Sherin Zada Khattak, Ex-Registrar University of Peshawar, Dr. Shafiq Ur Rehman,
Ex-Dean Environmental Sciences and Dr. Farrukh Hussain, Ex-Dean, Environmental Sciences University
of Peshawar. In this case, the accused persons were alleged for purchasing of land on exorbitant rates
for Peshawar University Welfare Foundation and Campus-II of University of Peshawar at Azakhel
Nowshera and thus causing loss of Rs.100 million to the national exchequer. Third inquiry was
authorized against Officers/Officials of Abdul Wali Khan University Mardan namely Dr. Ihsan Ali, Vice
Chancellor of Abdul Wali Khan University Mardan, Sher Ali, Registrar Wali Khan University Mardan and
Dr. Muhammad Amin, Director Wali Khan University Mardan. In this case, the accused persons were
alleged for irregularities in appointments in both teaching and non-teaching cadres as well as
embezzlement in funds. They made more than 700 appointments without any codal formalities. The
EBM decided to constitute a Joint Investigation Team (JIT) in order to conduct inquiry against
Muhammad Baqir Raza Kazmi, NAB officers and others. In this case, the accused persons were
alleged for misuse of authority, hampering of evidence and abuse of process of law. The EBM also
decided to authorize Complaint Verification (CV) in a case against Amir Haider Khan Hoti, Ex-Chief
Minister KP, and MNA regarding accumulation of assets beyond known sources of income. The
Executive Board Meeting (EBM) also decided closure of three inquiries against Mrs. Naheed Khan, Ex-
MNA, Tahir Basharat Cheema, Ex-Managing Director PEPCO & others and Javed Iqbal, Ex-Chief
Secretary KP due to lack of incriminating evidence. The EBM decided to allow NAB Lahore to
complete post closure activities of a case against Munawar Ali Syed, Ex-President of the Management
of Canal Breeze Cooperative Housing Society Lahore and others. The matter should also be referred to
Registrar, Cooperative Department, Lahore, and Punjab where the liquidation is in process. At the
end, Mr. Qamar Zaman Chaudhry, Chairman NAB reiterated his determination for eradication of

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corruption and corrupt practices by adopting holistic and proactive approach to check corruption
and corrupt practices through Awareness, Prevention and Enforcement Strategy. He emphasized for
making all efforts for arrest of corrupts, proclaimed offenders and absconders by utilizing all resources.
He directed all officers/officials of NAB to put their best efforts in conduct of complaint verifications,
inquiries and investigations against corrupts in accordance with law, transparently and on merit.
NAB approved an effective Internal Accountability Mechanism
Mr. Qamar Zaman Chaudry, Chairman National Accountability Bureau chaired a meeting at NAB
Headquarter to review the Internal Accountability Mechanism (IAM) within NAB. The Chairman
emphasized the need to augment and strengthen the process of Internal Accountability Mechanism
with a view to weed out such elements that for reasons of inefficiency, misconduct, malpractice and
violation of laid down SOPs/Rules and bring a bad name to the organization. The Senior Member,
Chairman Inspection and Monitoring Team (CI&MT) gave a presentation after incorporating the
suggestions/proposals received from all concerned on the proposed Internal Accountability
Mechanism within NAB under which NAB officers/officials shall be liable to adverse action for acts of
delinquency, violation of SOPs/Rules and unethical behavior. He informed that in line with the
directions of Chairman NAB during last meeting held at NAB headquarters, in which it was decided
that (CI&MT) should seek suggestions/feedback from NAB’s Regional Bureaus, Operation and
Prosecution Divisions of NAB HQ in order to further improve/revise the Internal Accountability
Mechanism on the basis of best practices enabling NAB to have a regular Quantitative Monitoring
and Qualitative analysis of the professional output. In his presentation Senior Member (CI&MT)
informed that as directed by Chairman NAB, an effective Internal Accountability Mechanism has
been devised in order to encourage the culture of adherence to Rules and SOPs and creating
deterrence against indulging in violations. He further informed that under Internal Accountability
Mechanism the matters related to delinquency of NAB’s officers/officials shall be firstly dealt by NAB’s
Regional Bureaus in accordance with law. The Regional Bureau of NAB will fix responsibility in case of
any remarks by superior judiciary regarding poor investigation and prosecution. Subsequently, HRM
Division of NAB HQ will proceed against those delinquent officers/officials as per laid down rules/SOPs
under TCS/NAO. Moreover, complaints against NAB officers/officials referred by the Honourable
Courts about any malpractice or received from any individual or Government Department against
any NAB employee(s) for involvement in corruption and corrupt practices, asking or receipt of bribe,
the matter shall be dealt strictly by HRM Division, NAB HQ under E&D Rules/TCS and NAO whichever is
applicable. Mr. Qamar Zaman Chaudry, Chairman NAB said that NAB is Pakistan’s apex Anti-
Corruption Organization with the mandate to eliminate corruption from the country. NAB’s
performance has been appreciated by International Independent Watch Dog “Transparency
International” as well as “PILDAT” in their recent reports. NAB can further rise in the eyes of people and
public fora when the menace of corruption is dealt with an iron hand. NAB’s priority is that we should
be first Accountable to ourself under Internal Accountability Mechanism under which unwarranted
actions will not go unnoticed, as the name of the NAB is more important than individuals. All
complaint verifications, inquiries, investigations and prosecution work must be done as per laid down
SOPs. He said that all stakeholders should know publically that efficiency, honesty, dedication,
commitment and hard-work is NAB’s main priority. Any violation by NAB employees of the laid down
laws/procedures SOPs/TCS/NAO shall be dealt strictly in NAB across the board. Chairman NAB
approved the Internal Accountability Mechanism (IAM) and directed Senior Member Chairman
Inspection and Monitoring Team (CI&MT) to issue the policy guidelines to all Regional Bureaus of NAB

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for implementation and application. He reiterated that NAB believes in zero tolerance policy against
corruption across the country. We have decided to adopt a holistic and proactive approach to
check corruption and corrupt practices within NAB so that NAB becomes a more efficient and
credible organization and public can look at its work with satisfaction and appreciation.
Meeting of Prevention Committee on Health Affairs
On the directions of Chairman National Accountability Bureau (NAB), Mr. Qamar Zaman Chaurdry, a
Prevention Committees on Health Affairs was constituted under the Chairmanship of DG, A&P, NAB
Headquarters (HQs). The Prevention Committee on Health Affairs comprised of representatives of Drug
Regulatory Authority of Pakistan (DRAP), Pakistan Medical and Dental Council (PMDC), National
Institute of Health (NIH), Pakistan Institute of Medical Sciences (PIMS), National Aid Control Program,
National TB Control Program, Ministry of National Health Services, Regulations and Coordination
Division (NHSR&C), Directorate of Malaria Control, Consultant from Private Sector and other
stakeholders etc. The mandate of the committee is to prepare recommendations to educate and
advice holders of public offices in the Ministry of National Health Services Regulation and
Coordination including different Divisions of DRAP and other related offices on measures to combat
corruption. Also to examine the related laws in force, rules and regulations, in order to eliminate
corruption and corrupt practices in the Health Sector. The recommendations given by Prevention
Committee on Health Affairs will be sent to Health Regulation Ministry and DRAP for implementation.
The Chairman NAB chaired a meeting to review the recommendations of Prevention Committee on
Health Affairs at NAB headquarters here today. DG A&P NAB gave presentation on the
recommendations of Prevention Committee on Health Affairs. She informed that the meeting of
Prevention Committee on Health Affairs was held in which it was decided to further divided the work
into 9 x sub committees for reformation in Health Departments as per their mandate. She informed that
the members of the sub-committees No: 1, 2, 3, 4 and 6 have prepared their recommendations on the
issues of “Reformation in the Division of Pharmaceutical Evaluations”, “Registration Division of
Controlled Drugs”, “Reformation in the Division of Costing and Pricing”, “Reformation in Division of Drug
Licensing”, “Division of Quality Assurance and Laboratory Testing, Division of Pharmacy Services”,
“Reformation in the Division of Health and OTC Products (Non-drugs), Division of Medical Devices and
Medicated Cosmetics”, Functions of NIH, Tibb and Homeopathy Sector, Pakistan Medical and Dental
Council, PIMS Hospital, Polyclinic Hospital, NIRM, Federal Government Hospitals Services, Human
Organ Transplant” and preparation of “Guidelines for procurement of vaccine and syringes.
Chairman NAB, Mr. Qamar Zaman Chaudry appreciated the efforts of Prevention Committee on
Health Affairs and the members of respective sub-committees. After detailed discussions and
deliberations, it was decided that the recommendations of Prevention Committee on Health Affairs
may be revised in the light of today’s discussion, deliberation and suggestions put forward during the
meeting in order to further improve and provide better health facilities to the people of Pakistan.
Announced judgment against Danish Ahmed ex-employee of NAB
The Accountability Court Karachi has announced judgment against Danish Ahmed ex-employee of
NAB, on allegation of illegal gratification from the public at large against fake appointment orders.
The accused has been sentenced to 5 years imprisonment along with a fine of Rs.612,000/-. In the
case of non-payment of fine, he will undergo Regress Imprisonment for further one year.

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NAB Multan files its first reference in the Accountability Court Multan against Sheikh Zaka-ur-
Rehman for Cheating public at large
The National Accountability Bureau (NAB) Multan Regional Bureau which was established in March
2015 to address the corruption complaints of three divisions of South Punjab including Multan,
Bahawalpur and Dera Ghazi Khan in order to save the people of South Punjab living in far flung areas
for travelling long distances to get their grievances addressed at NAB Lahore Bureau. The decision of
Chairman NAB, Mr. Qamar Zaman Chaudry was hailed by the people of South Punjab with a clear
vision to deal strictly under NAB’s zero tolerance policy against corruption and pursue corruption
cases on transparently and merit on the basis of evidence. NAB Multan Regional Bureau has filed its
first corruption reference against Sheikh Zaka-ur-Rehman s/o Baha Uddin Haji. In this case, NAB
received complaints against the accused person who is Businessman from District Vehari for collection
of Rs.22,928,015 money from public at large in the pretext of investment in his whole sale business of
sugar business with a promise of high profit. In order to deceive the people at large, the accused
Sheikh Zaka-ur-Rehman s/o Baha Uddin Haji gave fake payment receipts and post-dated cheques to
the affectees from his personal and business accounts but no cheque was honoured by any
respective bank. During the investigation, it has transpired that the accused Sheikh Zaka-ur-Rehman
s/o Baha Uddin Haji from District Vehari allured innocent people by offering high rates of profit on their
investments in his Sugar Business and embezzled hard earn money of people to the tune of
Rs.22,928,015/-. NAB Multan has filed a corruption reference against the accused Sheikh Zaka-ur-
Rehman s/o Baha Uddin Haji from District Vehari in the Accountability Court Multan as the accused
was running his sugar business in Multan. It is important to mention here that NAB Multan Regional
Bureau from very day of its establishment a separate complaint cell with its UAN number 061-111-622-
622 in order to widely publicize in the area.
Press Release
Qamar Zaman Chaudry, Chairman NAB during his second day visit to NAB Lahore Bureau chaired a
meeting of all wing heads of NAB Lahore Regional Bureau in which he was given detailed briefing
about the working of all the wings NAB Lahore Regional Bureau as well as briefing on Administrative
Affairs in order to further improve the performance of NAB Lahore Regional Bureau. During the briefing
to Chairman NAB, it was informed that NAB Lahore has filed 786 Corruption Reference in the
Accountability Courts since its inception. Out of which 556 Reference have been decided and 195
references are under trial in respective Accountability Courts. It was informed that NAB Lahore has
established 1876 Character Building Societies to create Awareness against the ill effects of corruption
among the youth of Pakistan in line with Memorandum of Understanding (MoU) signed with Higher
Education Commission (HEC) by NAB. NAB Lahore has asked LESCO, FESCO and SNGPL to join hands
with NAB under its awareness and prevention campaign to spread message “Say NO To Corruption”
by printing NAB’s message on electricity and Sui Gas Bills. NAB Lahore has also proposed to Punjab
Text Book Board for inclusion of Anti-corruption themes, short stories in Curriculum in order to educate
students about the ill effects of corruption on our society. It was informed that NAB Lahore has
recovered Rs.8246.461 through Voluntary Return (VR) and Rs.5959.928 million through Plea Bargain
(PB) which were deposited in the national exchequer since its inception. It was informed that NAB
Lahore has constituted Prevention Committees on fraudulent practices in banking sector, second
Prevention Committee on fraudulent practices in Housing Sector and third Prevention Committee on
Reformation of Regulatory Mechanisms. The recommendations of the above Prevention Committees
will be sent to concerned departments for implementations after approval of Chairman NAB. The

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Chairman NAB said that Pakistan in the last 20 years has achieved its best Corruption Perception Index
(CPI) from 175 to 126 issued by the Transparency International. He said that NAB has made serious
efforts for eradication of corruption and has chalked out a very comprehensive National Anti-
Corruption Strategy (NACS). Under this National Anti-Corruption Strategy, National Accountability
Bureau (NAB) has recovered Rs.262 billion since its inception and deposited in national exchequer. He
said that the PILDAT report for the last year revealed that 42% people trusted NAB against 30% for
police and 29% for government officials which is recognition of efforts of all ranks of NAB
officers/officials for eradication of corruption from the country. The Chairman NAB said due to the
efforts of NAB that for the first time Anti-Corruption has been made a part of development agenda in
Pakistan in the context of Governance. The Planning Commission of Pakistan has included a chapter
devoted to issues of corruption in the 11th five year plan and we intend to work closely with Planning
Commission to achieve the goals set in there. The Chairman NAB appreciated the performance of
NAB Lahore and directed to arrest corrupts, proclaimed offenders and absconders and put them
behind the bars completing all legal formalities. He directed all officers/officials of NAB Lahore to work
more vigilantly, honestly and diligently in order to curb corruption and corrupt practices from the
country. He appreciated the performance of all wings of NAB Lahore under the supervision of its
Director General and wished that better results will be produced in the future. He hoped that NAB
Lahore will continue to work with same pace and zeal without any fear and favor.
NAB arrested Sarfraz Ahmed and Atif Raza, former Superintendents FBR
NAB arrested two accused Sarfraz Ahmed S/o Sardar Ahmed, former superintendent of Federal Bureau
of Revenue (FBR) and Atif Raza S/o Syed Intikhab Hussain Naqvi, former superintendent FBR. Both
accused along with private persons were involved in misuse of authority and illegal refund of sales tax
by using fake invoices. Both allegedly misappropriated and committed fraud of Rs.44.53 million. It is
alleged that M/s H&Y enterprises in connivance with the arrested FBR persons used false invoices of 28
fake suppliers to gain fraudulent returns.
NAB is committed to eliminate corruption, Chairman NAB
Mr. Qamar Zaman, Chaudry, Chairman NAB visited Lahore to review the performance of NAB Lahore
Regional Bureau. DG NAB Lahore Regional Bureau gave briefing to Chairman NAB about the
performance and highlighted strengths and weaknesses during the briefing. During his presentation to
Chairman NAB, DG NAB Lahore said that NAB Lahore has received 1616 complaints and 1240
complaints were disposed of by the NAB Lahore during Jan- May 2015. He said that NAB Lahore has
authorized 51 Complaint verifications during 2015. He said NAB Lahore authorized 237 inquiries during
2015 and completed 115 and under process 122 inquiries during 2015. He said that NAB Lahore has
authorized 156 investigations during 2015. Out of which 76 completed While 80 is under process during
2015. He said NAB Lahore has filed 20 Corruption Reference in the Accountability Courts during 2015
and arrested 44 accused persons during 2015. He said NAB Lahore has recovered Rs.8236.38 through
Voluntary Return and Plea Bargain. The Chairman NAB said NAB is Pakistan's apex anti-corruption
organization which is assigned with the responsibility of elimination of corruption through a holistic
approach of awareness, prevention and enforcement. It operates under the National Accountability
Ordinance-1999 which is extended to whole of Pakistan including FATA and Gilgit Baltistan. NAB has its
Headquarter in Islamabad while it has Seven Regional Offices including NAB Regional Bureau Lahore.
At the end, Mr. Qamar Zaman Chaudry, Chairman NAB reiterated his determination for eradication of

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corruption and corrupt practices by adopting Zero Tolerance policy against corrupts and directed to
arrest Corrupts, Proclaimed Offenders and Absconders by utilizing all resources. He said NAB is
committed to eliminate corruption and corrupt practices through transparent and fair inquiries,
investigations and vigorous prosecution in Courts. The Chairman NAB said that NAB Lahore Regional
Bureau is the one of the important Regional Bureau of NAB. It has a big share in the excellent
performance of NAB over the years. He directed all officers/officials of NAB to put their best efforts in
conduct of complaint verification, inquiries and investigations against corrupt in accordance with law,
transparently and on merit. He said performance of NAB Lahore under the supervision of DG NAB
Lahore Bureau is appreciated but there is always room for improvements however good work always
pays satisfaction and shows commitment with work.
NAB announced Rs.100,000/- reward for the arrest of PO named Muhammad Amin
The National Accountability Bureau (NAB) has announced a cash reward of Rs.100,000/- for those
who will provide information to NAB in the arrest of a Proclaimed Offender, Muhammad Amin son of
Muhammad Rafique, resident of House no. 168, Street no. 7, Peoples Colony, Okara, and Punjab. The
accused Muhammad Amin is wanted to NAB in a Civil Petition No. 2132/2014, Fiaz Ahmed Khan Vs the
State and Others- Investigation against Management of M/s Developers of Gulshan-e-Dost
Muhammad Housing Scheme, Pattoki and Others. NAB has arrested three out of four accused persons
whereas the fourth accused person namely, Muhammad Amin son of Muhammad Rafique has been
declared as Proclaimed Offender (PO) by the Accountability Court Lahore on 24-03-2014. The
Honorable Supreme Court of Pakistan has also ordered for arrest of the absconding accused
Muhammad Amin son of Muhammad Rafique.
NAB arrested Zawar Hussain, Naib Tehsildar, Raja Ashfaq Ahmad, Naib Tehsildar and Raja
Yousaf Ajaib Khan, Patwari on charge of corruption
NAB arrested Zawar Hussain, Naib Tehsildar, Raja Ashfaq Ahmad, Naib Tehsildar and Raja Yousaf Ajaib
khan, Patwari, District Jhelum on charge of Corruption and misuse of authority. The accused persons
Zawar Hussain, Naib Tehsildar, Raja Ashfaq Ahmad, Naib Tehsildar and Raja Yousaf Ajaib khan,
Patwari, District Jhelum in connivance with each other cheated public by making bogus, fraud and
illegal entries in the revenue record misusing their authority. During investigation it was allegedly
proved that claim of sellers and buyers that their signatures were forged. The Forensic analysis was
conducted which proved that signatures were forged. The total liability in this case is Rs.20.649 million
which will be recovered from the accused persons as per law. The accused persons presented in the
Accountability Court Islamabad today for obtaining their physical remand. The Accountability Court,
Islamabad granted 10 days remand.
Nisar Ahmed Ansari son of Wali Muhammad Ansari, Ex Director KBCA was arrested by NAB
Karachi
Nisar Ahmed Ansari son of Wali Muhammad Ansari, Ex Director KBCA was arrested by NAB Karachi.
The accused was arrested on non-bailable warrants issued by the competent authority. He had
accumulated assets beyond his known sources of income worth Rs.36 million which has been
detected till now. He will be produced before the Accountability Court for physical remand.

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Prevention Committee on Religions Affairs gives its recommendation
Prevention Committee on Ministry of Religious Affairs (MoRA) was constituted under the Chairmanship
of DG, A&P, NAB, and Islamabad. The Prevention Committee comprised of representatives of Ministry
of Religious Affairs (MoRA), Health, Foreign Affairs, Finance, Interior, Cabinet, Tourism, Ministry of Law
Justice and Parliamentary Affairs as members of the Prevention Committee on MORA. In pursuance of
Section 33C of National Accountability Ordinance (NAO) 1999, the Prevention Committee on MoRA
was given mandate to examine the laws and rules in force relating to the practice and procedures in
Ministry of Religious Affairs in order to prevent corruption and corrupt practices. Today, Chairman NAB,
Mr. Qamar Zaman Chaudry, Chairman chaired a meeting in order to review recommendations of
Prevention Committee on Ministry of Religious Affairs at NAB Headquarters. The representative of
Ministry of Religious Affairs was also present in the meeting. DG A&P, NAB explained the
recommendations of Prevention Committee in the areas i.e. allocation of quota for Hajj Group
Organizers (HGOs), special arrangements for old age Hajjis, registration of Hajj Group Organizers
(HGOs) for fairness and transparency, awareness and training of Hajjis, restricting Hajj once in five
years, rules of cancellations and refunds, HGOs agreements verification and monitoring, embarkation
points, Moavineen and audit of compensation and welfare fund of the Hujjaj. The first area in which
the Prevention Committee gave its recommendations was about allocation of quota for Hajj Group
Organizers (HGOs). It was recommended that transparent system be established for verification and
registration of Hajj Group Organizers (HGOs) with the help of 3rd party. Categorization of HGOs may
be carried out based on their resources, financial health and quality of service and previous
performance. Assessment of HGOs may be done by the customers (Hajjis) analysing their services
based on point system (quantification). Imposition of penalty be considered as per prescribed
procedure depending upon the gravity of offence. Transparent system may be adopted for weeding
out of inefficient operators and encouraging new entrants so as to ensure competitiveness and fair
play. It was observed that Hajj and Umrah Act under preparation at Ministry of Religious Affairs which
may be finalized at the earliest. The second area in which the Prevention Committee gave its
recommendations is about special arrangements for old age hajjis where special arrangements
should be made to assist old age hajjis to cater to their needs. In view of the hardships faced by the
single 75+ individuals during Hajj, Committee recommended that a companion is a must. The third
area in which the Prevention Committee gave its recommendations is about registration of Hajj Group
Organizers (HGOs) for fairness and transparency in the management of Hajjis where comprehensive
set of instructions must be formulated for compliance by all HGOs regarding facilities and mandatory
work to be under taken by HGOs during Hajj Operations. HGOs must be required to deposit a
reasonable amount of performance guarantee failing which the amount may be confiscated and
distributed among the affected Hajjis. The fourth area in which the Prevention Committee gave its
recommendations is about Awareness and Training of Hajjis where effective awareness campaign
may be launched every year about the Hajj activities for Hajjis, ranging from policy to performance,
dos and don’ts, call centre concept, use of SMSs. Print and electronic media may be used in this
regard. HGOs involvement in Awareness and Training may also be considered. The fifth area in which
the Prevention Committee gave its recommendations is about hajj once in five years where the
Prevention Committee recommended that those who have performed Hajj earlier may not be
allowed. The sixth area in which the Prevention Committee gave its recommendations is about
composition of committee which was earlier constituted on the directions of Supreme Court of
Pakistan to reinforce and further improvement in the working of the following areas like building hiring

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Committee, monitoring committee over Hajj Operations being conducted by MORA, monitoring
committee to review the performance of seasonal hajj staff and monitoring committee for Mina
arrangements. The seventh area in which the Prevention Committee gave its recommendations is
about rules of cancellations and refunds. It was recommended that cancellations only on the ground
of death or serious ailment of the person concerned may be allowed. In case of cancellation on any
other ground, specific penalties imposed as per guidelines and amendments thereto by ministry may
be continued. The eighth area in which the Prevention Committee gave its recommendations is
about Embarkation/Disembarkation points. It was recommended that the embarkation point must be
decided on the basis of choice given by the Hajj. No change of Embarkation Point is permitted.
Embarkation Point will also be the Disembarkation point for the return journey. The ninth area in which
the Prevention Committee gave its recommendations is about Moavineen. It was recommended that
Moavineen being deputed to help pilgrims must be organized as a well-mannered unit with proper
hierarchy of command structure for useful employment with fool proof monitoring system and
evaluation. They must be made to wear uniforms, clearly indicating the nature of assistance they are
supposed to provide. The tenth area in which the Prevention Committee gave its recommendations is
about audit of compensation and welfare fund of the Hujjaj where the compensation and welfare
fund of the Hujjaj should be audited by Federal Audit on regular basis. The eleventh area in which the
Prevention Committee gave its recommendations is about outsourcing of hajj quota where the
Prevention Committee recommended that depending on quality of services and cost thereof
popularity of performing Hajj under MoRA arrangement and private HGOs must continue. The
twelveth area in which the Prevention Committee gave its recommendations is about the Hajj officials
getting engaged in protocol duties of VIPs. In this regard, the Prevention Committee recommended
that VIP flight for short duration stay may be abolished. After detailed deliberation in a lengthy session,
Chairman NAB, Mr. Qamar Zaman Chaudry approved the recommendations prepared by the
Prevention Committee on Ministry of Religious Affairs (MoRA). He appreciated the efforts of all
concerned. The recommendations of Prevention Committee on MoRA will be sent to Ministry of
Religious Affairs for implementation.
Information Minister presents Gold medal to Mr. Nawazish Ali Khan Asim
Mr. Nawazish Ali Khan Asim, Director (Media) National Accountability Bureau (NAB) was decorated
with GOLD MEDAL AWARD by Senator Pervaiz Rashid, Federal Minister for Information at a ceremony
held at a local hotel here today. Mr. Nawazish Ali Khan Asim has joined National Accountability
Bureau (NAB) on deputation from CDA last year in order to highlight NAB’s performance through its
Awareness, Prevention and Enforcement Campaign and to boost up its image as Apex Anti-
Corruption Organization with the mandate to curb corruption and corrupt practices under the
leadership of Mr. Qamar Zaman Chaudhry, Chairman NAB. It was a major challenge for Mr. Nawazish
Ali Khan Asim Director Media NAB but due to his vast experience, he remained in constant in touch
with media so that the point of view of NAB in the media is prominently highlighted in an accurate
and prompt manner. Mr. Nawazish Ali Khan Asim is a graduate from prestigious Government College
Lahore and possesses a M.SC degree from Quaid-e-Azam University, Islamabad in first-class. He has
progressive growth experience of more than 20 years working in public sector departments in various
capacities, especially in public relations and media management. He has served as Director (Media)
with Ex-Minister of State for Interior, Dr. Shahzad Waseem, Director (Media) with Mr. Aftab Ahmad Khan
Sherpao, Ex-Minister for Interior, Director Media with Lt. Gen Retired, Hamid Nawaz Khan, Ex-Care
Taker Minister for Interior, Director General (Media) with Mr. A. Rehman Malik, Ex-Minister for Interior,

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Director General (Media) with Malik Mohammad Habib Khan, Ex-Caretaker Minister for Interior and
Director General (Media) with Ch. Nisar Ali Khan, Interior Minister of Pakistan. In recognition of his
public service, he was awarded Tamgha-i-Imtiaz by the President of Pakistan in 2013. Presently, Mr.
Nawazish Ali Khan Asim is working in National Accountability Bureau (NAB) as Director Media. During
his stay in NAB, he has single-handedly performed his duties exceptionally well. His visible performance
has always been appreciated not only by his superiors and colleagues but also the independent
Watch Dog Mishal Pakistan. Mr. Nawazish is very efficient, competent, honest, hardworking and task-
oriented officer who has usual capability to produce high quality work and can work under pressure
even in odd hours. He has a balanced personality and maintains very good relationship with media.
Due to his good interpersonal communication skills, he highlighted NAB’s point of view/policies in print
and electronic media very prominently, logically and convincingly.
NAB to develop an effective Monitoring and Evaluation Framework, Chairman NAB
Mr. Qamar Zaman Chaudhry, Chairman NAB chaired a meeting to review latest progress on
development of Accountability Management System (AMS) at NAB Headquarters here today. During
the meeting, DG NAB Headquarters gave a presentation regarding the work done so far on
development of Accountability Management System (AMS) in order to develop an effective
Monitoring and Evaluation (M&E) framework for NAB. He informed that a team of Lahore University of
Management Sciences (LUMS) visited NAB Headquarters and Rawalpindi/Islamabad Regional Bureau
to review for setting up of an effective Monitoring and Evaluation (M&E) System and ability to analyze
data in qualitative and quantitative form having warnings and alarms system for violators. The LUMS
team after their observations and survey, gave recommendations to NAB that after a careful review
of the data and reports at NAB, it has been observed that NAB has a rigorous Monitoring System and
data overload. Reporting mechanism is also in place and Regional competence to manage the
workload is also satisfactory. However, NAB needs to draw an effective overall M&E Framework which
should encompass the organizational vision and mission and should align the activities to the desired
outcomes. NAB also needs to put in practice a rigorous system of evaluation to analyze the data
regularly to evaluate its workings. On the basis of recommendations of LUMS team, NAB has sought
requirements from Regional Bureaus, Operation and Prosecution Divisions of NAB Headquarters for
establishment of an effective Accountability Management System (AMS). In line with the
recommendations of LUMS and suggestions received from NAB Regional Bureaus, Operation and
Prosecution Divisions of NAB Headquarters, the Accountability Management System (AMS) was
developed catering to the needs of all concerned having salient features of maintenance of data at
each stage including complaint entry, complaint verification, inquiry, investigation, prosecution stage
and record preservation of Regional Board Meetings and Executive Board Meetings including case
brief, decisions made and list of participants attended the meeting with time & date and in line with
the directions of Supreme Court of Pakistan for setting up an effective Monitoring and Evaluation
(M&E) System and ability to analyze data in qualitative and quantitative form having warnings and
alarms system for violators. The Chairman NAB appreciated the efforts being made by NAB team for
setting up of Accountability Monitoring System (AMS) in 75 days having warnings and alarms system
for violators till June 30, 2015 which is also date of completion of all pending complaint verifications,
inquiries and investigations. During the meeting, it was decided that a Special Monitoring Cell will be
established in the office of Prosecutor General Accountability (PGA) at NAB Headquarters for matters
before Honourable Supreme Court of Pakistan and all DPGAs will establish Special Monitoring Cell at
NAB Regional Bureaus for matters before Honorable High Courts so that strict compliance of orders of

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Honorable Supreme Court of Pakistan and Respective High Courts be implemented in letter and spirit.
At the end, Chairman NAB reiterated the need to develop an effective Monitoring and Evaluation
(M&E) framework for NAB which should help in fulfilment of NAB’s core objectives and mandate. The
Nation wants NAB to play its role in eradication of corruption and corrupt practices.
Arrest of Muhammad Wali S/o Mantwali of Al Safa Property
The National Accountability Bureau (NAB), Rawalpindi arrested Co-accused Muhammad Walli S/O
Mantwalli of Al Safa property and builders (Marwa Town) accused in Rs.104 million Modarba case on
charges of corruption, corrupt practices and cheating public at large in the ploy of Islamic mode of
investment. The main accused Mufti Saqib is in judicial remand at adyala jail. The total effectees are
70 in this modarba case. The Regional NAB Rawalpindi Bureau is currently investigating 96 cases of
multi-billion modarba scam, in which 8 cases are in Reference stage, 14 are at investigation stage, 5
are at inquiry stage, 2 are at complaint verification stage and 67 are on complaint stage and has so
far received 33744 complaints from scam affectees. The NAB has recovered Rs.1.734 billion, Land,
property, houses, and Luxury vehicles in these mega scam. The Bureau has so far arrested 32 accused
persons in Modarba scam including Ghulam Rasool Ayubi, M khalid, Hussain Ahmed, Mufti Shabbir
Usmani, Sajjad ahmed, Muhammad Irfan, Hamid Nawaz, Mufti Ehsan ul haq, Obaid ullah, Ibrar ul
haq,Hafiz Muhammad Nawaz,Muhammad Moeen Aslam,Umair Ahmed,Nazir ahmed,Ibrahim
Alshoriam, M Usama,Aqeel Abbasi,Saifullah,Asif Javed ,Bilal khan bangash,khan muhammad,Mateeh
ur rehman,Ijaz Anwar,Muhaamad Saqib,Muhammad Ehsan,Muhammad Nauman qureshi,Syed
Aksheed Hussain,Adil Butt,Mufti Hanif khan,Hafiz Mukhtar and Muhammad Bilal Afridi.
Executive Board Meeting
The Executive Board Meeting (EBM) of National Accountability Bureau (NAB) was held under the
chairmanship of Mr. Qamar Zaman Chaudhry, Chairman NAB at NAB Headquarters here today. A
number of decisions were made during the Executive Board Meeting (EBM) in the context of cases put
up for consideration in the EBM. The Executive Board Meeting (EBM) of NAB authorized filling of a
reference against Dr. Shafi Muhammad Zehri, Ex-Secretary Health, Balochistan, Dr. Manzoor Hussain,
Ex-Additional Secretary Health, Dr. Elahi Bkhsh Ex. Additional Director, Dr. Abdul Ghaffar Kayani
Additional Director and Dr. Akhtar Hameed Contractor. In this case, the officials of Health
Department, Balochistan have committed the offence of Corruption and Corrupt Practices and
misused their authority by helping the contractor in evading government taxes of Rs.6,051,190/- and
released performance bank guarantee of Rs.3,850,000/- before stipulated period. Hence the
accused caused a total of Rs.9, 901,190/- to State Exchequer during the purchase of CT Scan
Machine for Bolan Medical College & Hospital, Quetta. The EBM authorized three (03) investigations,
first against Saadat Anwar, (MPA), Balochistan, EX-Finance Minister and Ex- Chairman BDA, Ali Zaheer,
Additional Chief Secretary, BDA and Manzoor Ahmed, DG (M&E) and others. In this case, the accused
persons are alleged of illegal change of executing agency for project namely Zhob Mir Ali Khail from
C&W Deptt to BDA, Quetta, illegal enhancement in scope and cost, non-transparency in
prequalification of contractors and award of contract at exorbitant rates. Thus causing huge loss to
national exchequer. Second against Qadir Bux, Gadda Hussain Abro, Imtiaz Solangi, Abdul Subhan
Memon, Salik Nukrich, Ghulam Ali Shah. In this case, the accused persons are alleged for Illegal
allotment of land measuring 7-01 acres in Survey No. 54 in Deh Jamshoro, with connivance of
Revenue Department, Hyderabad and causing a loss of Rs.350 to 400 million to national exchequer.
Third against Zard Ali Khan, Chief Engineer (BS-20) C&W Department, Peshawar. In this case, the

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accused is alleged of accumulation of assets beyond known sources of Income. The EBM authorized
two (02) inquiries, first against Ahmad Humayun Shaikh (BOP Case-2015) SBP Ref under Section 31-D of
NAO 1999, Ref amount Rs.76.372 million. In this case, the accused person is alleged for wilful loan
default of Rs76.372 Million. Second against Muhammad Yusif, Faisal Iqbal and Others (Bank-Al-Habib
Limited, Shahdad Kot Branch, Sindh). In this case, huge turnover in the accounts has been noticed.
Further, misuse of identity of Muhammad Yousif by Faisal Iqbal for opening the bank account and
suggests Faisal Iqbal’s criminal intentions for the unknown motives. The Executive Board approved the
application of Voluntary Return (VR) of Rs.44 million by M/S MN Construction Company. The EBM also
approved the application of Plea Bargain of Shahbaz ud Din, Tariq Shahbaz and Khalid Shahzad of an
amount of Rs.109,480,000/-. The Executive Board also decided to close two cases, first against
Irfanullah Khan, Director (BS-20), Literacy & Non-Formal Basic Education, Quetta Balochistan and
second Khyzer Yousaf Dada, Director Rehmoumer & Co. Pakistan (Parent Co.) and Zaheer Abbas
Lund Baloch due to lack of incriminating evidence. In a case against officers/officials of Pakistan
Postal Services Department and others namely Raja Ikram-ul-Haq, Ex-Secretary Postal Services, Aijaz
Ali Khan, Ex-Managing Director, Pakistan Post Foundation and Masroor Sarwar Khan, Chief Executive
Officer (CEO) M/s MSK International. In this case, the accused are alleged for corruption in Pakistan
Post Foundation Housing Schemes thus causing a loss of Rs.100 Million to national exchequer. The EBM
directed DG NAB, Rawalpindi to further inquire the matter within one month and submit report in this
regard. At the end, Chairman NAB said that NAB believes in zero tolerance against corruption and
corrupt practices across the country. He directed all officers/officials of NAB to put in their best efforts
in eradication of corruption and conduct all complaint verifications, inquiries and investigations
transparently in accordance with laid down SOPs and laws on merit.
NAB arrested Zia Ur Rehman officer of KASB
National Accountability Bureau (NAB) has arrested Zia Ur Rehman son of Ata Ur Rehman. The accused
was an OG-1 officer at KASB Bank Limited. Zia Ur Rehman was involved during his posting in KASB Bank
Shahra-e-Faisal Branch Karachi in debiting the accounts of customers without any authority and
authority and consent of the account holders. He passed transactions illegally and committed various
irregularities in different heads of account and caused loss to the clients to the tune of Rs.11 lakh in his
personal capacity. The accused was an absconder in reference No.9/2010 and was declared a
proclaimed offender by Honorable Accountability Court. He is presently in judicial remand.
NAB Rawalpindi arrested loan defaulter of Rs.308 million
The National Accountability Bureau (Rawalpindi) has arrested Ch. Muhammad Arif, Chief Executive
Officer (CEO), and Rose Associates Islamabad today in a case of wilful loan default of Rs.308 million.
The accused will be produced before the Honorable Accountability Court for physical remand on
tomorrow.
SECP Referred 16 Cases to NAB
In line with Mr. Qamar Zaman Chaudry, Chairman NAB’s firm resolve and commitment to eradicate
corruption and corrupt practices from the country, the National Accountability Bureau (NAB) and
Securities and Exchange Commission of Pakistan (SECP) agreed for creation of a Joint Task Force
comprising of senior level officers of NAB and SECP in order to work expeditiously on 16 cases referred
by SECP to NAB. The recent complaint referred by Securities and Exchange Commission of Pakistan
(SECP) to National Accountability Bureau (NAB) is regarding alleged fraud, embezzlement and

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cheating public at large by the Sponsors, Directors and Management of M/s ACE Securities (Private)
Limited (ASPL) Broker of Karachi Stock Exchange Limited. The M/s ACE Securities (Private) Limited is
alleged for handling of securities entered in the sub-accounts maintained under its participant ID
without authority of the sub-account holders in violation of applicable laws. The Karachi Stock
Exchange (KSE) being a front line regulator has been receiving claims/complaints against M/s ACE
Securities (Private) Limited (ASPL). On April 23, 2015 KSE through a Show Cause notice conveyed to
M/s ACE Securities (Private) Limited (ASPL) that all trading work stations would be switched off before
opening of market on Monday, April 27, 2015 if no response/action is given/taken by the ASPL’s. On
failure to address the investor’s claims by ASPL, the KSE vide Notice dated April 27, 2015 suspended
operations of all trading terminals of ASPL till further notice. The total numbers of complaints received
by the Karachi Stock Exchange (KSE) against ASPL are 201 and the alleged amount of claims against
M/s ACE Securities (Private) Limited (ASPL) is Rs.236 million. In view of the alarming rise in number of
unresolved complaints against M/s ACE Securities (Private) Limited (ASPL), Chairman NAB has ordered
inquiry regarding alleged fraud, embezzlement and cheating public at large by the Sponsors,
Directors and Management of M/s ACE Securities (Private) Limited, Broker of Karachi Stock Exchange
Limited at the earliest regarding the matter. On the basis of inquiry report, an appropriate action will
be initiated against the persons involved in fraud and embezzlement and cheating public at large in
the case of M/s ACE Securities (Private) Limited, Broker of Karachi Stock Exchange Limited.
Furthermore, the National Accountability Bureau (NAB) and Securities and Exchange Commission of
Pakistan (SECP) have agreed to establish a Joint Task Force comprising of senior level officers of NAB
and SECP in order to have better coordination, interaction and to work expeditiously on the corruption
cases referred by SECP to NAB within the SOPs laid down by NAB. The mandate of the Joint Task Force
will oversee and assist to relevant investigation officers of Financial Crimes Investigation Wing of NAB in
order to have inquiry/investigation related to fraud, embezzlement, corrupt practices and cheating
public at large by the sponsors, directors and management of brokerage houses of the stock
exchanges referred by SECP to NAB on top priority basis with the intention to recover investor’s hard
earned money which has been misappropriated for personal benefits of the sponsors and Directors of
the Brokerage Houses. For greater cohesion in the professional work and the constitution of Joint Task
Force at NAB Headquarters, 02 senior level officers/experts from SECP (one each from legal and
operation side) and senior level officers of NAB from Financial Crimes Investigation Wing, Operation
and Prosecution wing have been identified to be part of Joint Task Force and have started their work
in line with the rules and regulations of SECP and NAB. The Chairman NAB has directed all NAB officers/
officials to conduct all inquiries/investigations of the cases referred by SECP to NAB in line with the laid
down SOPs/laws transparently and on merit in order to restore investor’s confidence and penalize the
accused persons responsible for causing huge loss to general public and national exchequer as NAB
believes Zero tolerance against corruption and corrupt practices across the country.
Chairman, NAB takes cognizance of a media report where it has been alleged that an
accused has been physically handled in NAB custody
Mr. Qamar Zaman Chaudry, Chairman, National Accountability Bureau (NAB) has taken cognizance
of a media report where it has been alleged that an accused has been physically handled in NAB
custody. The Chairman, NAB, while taking serious notice of the media report has directed Director
General NAB Khyber Pakhtunkhwa to hold an independent inquiry into the matter and report the
factual position. Action will be taken against any delinquent if it is substantiated in the inquiry report.

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The Chairman NAB has made it very clear that no illegal act of any officer/official of NAB will be
tolerated and the law violators will be dealt strictly in accordance with law.
NAB and SECP decided for operation of a Joint Task Force
In line with Chairman NAB’s firm resolve and commitment to eradicate corruption and corrupt
practices from the country, National Accountability Bureau (NAB) and Securities and Exchange
Commission of Pakistan (SECP) have decided for creation of a Joint Task Force comprising of senior
level officers of NAB and SECP in order to work expeditiously on the corruption cases referred by SECP
to NAB. The Joint Task Force will inquire/investigate all corruption cases related to fraud,
embezzlement, corrupt practices and cheating public at large by the sponsors, directors and
management of brokerage houses of the stock exchanges referred by SECP on top priority basis with
the intention to recover investor’s hard earned money which has been misappropriated for personal
benefits of the sponsors and Directors of the Brokerage Houses. For greater cohesion in the
professional work and the constitution of Joint Task Force at NAB Headquarters, 02 senior level
officers/experts from SECP (one each from legal and operation side) and senior level officers of NAB
from Financial Crimes Investigation Wing, Operation and Prosecution wings will be part of Joint Task
Force. NAB assured its whole-hearted support for early meaningful conclusion/disposal of the pending
cases of SECP as per law, also to restore investor’s confidence and penalize the accused persons
responsible for causing loss to general public and national exchequer.
NAB believes in zero tolerance against corruption
Mr. Qamar Zaman Chaudry, Chairman National Accountability Bureau (NAB) visited NAB Karachi to
review the performance of NAB Karachi Regional Bureau. DG NAB Karachi Lt. Col (Retired) Siraj–ul-
Naeem along with his team briefed Chairman NAB about the current status of various cases,
investigations, inquiries and references. The Chairman NAB said that NAB Karachi is dealing with
important cases. It plays a prominent role in contributing towards the overall performance of NAB. The
DG NAB informed the Chairman that NAB Karachi dealt with 60 Complaint Verifications (CV), out of
which 39 have been disposed of and 21 are under process. He further explained that NAB Karachi
Regional Bureau is conducting 286 inquiries, from which 146 have been completed and 140 are under
process. On the investigation side, a total number of 140 investigations were carried, out of which 19
have been completed and 121 are under process. Chairman NAB was further informed that NAB
Karachi has recovered Rs.874.566 million. NAB Karachi filed 16 references during the period of Jan to
April 2015. Mr. Qamar Zaman Chaudry, Chairman NAB reiterated that NAB is committed to eradicate
corruption and corrupt practices across the country and emphasized that the mega cases of
corruption should be priority of NAB on the example of Indonesia Model. Chairman NAB directed that
every investigation officer should maintained case diary and it should be checked by Desk Officer at
least twice a week and once a week by the Director of the wing. He emphasized that proper
evidential proof must accompany with every case and Directors of all wings must maintain
transparency, merit and accuracy. The chairman NAB stated that communications skills of all NAB
officers must be emphasized upon and training programs on writing skills should be arranged regularly.
He appreciated the professionalism being displayed by officers/officials of NAB Karachi Regional
Bureau in their work and stated that after June 30-2015 the work load will comparatively reduce as all
pending cases have the deadline of June 30th, 2015 to complete pending cases. He was pleased to
note the progress made in the prevention committee on health, education and excise & taxation. The
Chairman NAB appreciated the performance of NAB Karachi and directed to arrest culprits,

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absconders and Proclaimed Offenders (POs) by using all resources. He directed that all complaint
verifications, inquiries and investigations should be completed transparently, in time and on the basis
of evidence on merit under laid down procedures and SOP. The Chairman NAB said NAB believes in
zero tolerance against corruption and directed all Officers/Officials of NAB Karachi to work more
vigilantly, honestly and diligently in order to curb corruption and corrupt practices from the country.
He appreciated the performance of all wings of NAB Karachi under the supervision of its Director
General and wished that better results will be produced in the future. He hoped that NAB Karachi will
continue to work with same pace and zeal without any fear and favor.
NAB arrested Aijaz Siddiqui in fake illegal admissions in SMC, Karachi
National Accountability Bureau (NAB) Karachi has arrested an absconder Aijaz Siddiqui son of
Mohammad Azeem Siddiqui, who was working as junior clerk at Sindh Medical College (SMC). He
along with 11 others were involved in fake illegal admissions in Sindh Medical College Karachi. He and
other accused used to issue fake ID Cards, Admit Cards and Enrolment Cards and received Rs.19
million as illegal gratification. He was produced in Accountability Court, Karachi where he was sent for
judicial remand.
Embezzlement in BISP Funds: NAB arrests Akhtar Hussain Postmaster
NAB arrested Akhtar Hussain Branch Postmaster Manglor District Swat allegedly involved
embezzlement/mis-appropriation in Benazir Income Support Programme (BISP) and caused more than
Rs.2.00 Million loss to the Government Exchequer. The Benazir Income Support Programme (BISP) is
aimed at distribution of money among the poor and needy individuals in the country. The programme
is meant to extend helping hand to all those deserving persons who are in dire need of financial
support so that their suffering may be alleviated on priority basis. Under this programme the money is
released to the Postal Services Department for distribution through local post office network.
Obviously, the post office staff stands responsible for releasing the money to the deserving and
qualified persons upon having genuine receipts. However, several complaints have been received by
NAB (KP) against Postal authorities that money is embezzled through fake receipts and fake thumb
impressions, not delivered the needy persons at all. NAB initiated inquiry into the matter to ascertain
the factual position and find to all those involved in the scam of the Postal Services Department. The
accused Akhtar Hussain while posted as Branch Poster master Manglor, Swat embezzled the BISP
funds by pasting fake & bogus thumb impression on the money orders which was supposed to
distribute amongst the poor and needy individuals. NAB had already recovered Rs.3.00 Million in the
instant case. The accused will be produced before the Accountability Court for obtaining his physical
remand into NAB custody.
Press Release
Qamar Zaman Chaudry, Chairman National Accountability Bureau (NAB) has taken a serious notice
on a complaint regarding alleged fraud, embezzlement and cheating public at large by the
Sponsors, Directors and Management of M/s ACE Securities (Private) Limited (ASPL) Broker of Karachi
Stock Exchange Limited. As per complaint received in NAB, M/s ACE Securities (Private) Limited is
alleged for handling of securities entered in the sub-accounts maintained under its participant ID
without authority of the sub-account holders in violation of applicable laws. The Karachi Stock
Exchange (KSE) being a front line regulator has been receiving claims/complaints against M/s ACE
Securities (Private) Limited (ASPL). On April 23, 2015 KSE through a Show Cause notice conveyed to

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M/s ACE Securities (Private) Limited (ASPL) that all trading work stations would be switched off before
opening of market on Monday, April 27, 2015 if no response/action is given/taken by the ASPL’s. On
failure to address the investor’s claims by ASPL, the KSE vide Notice dated April 27, 2015 suspended
operations of all trading terminals of ASPL till further notice. The total numbers of complaints received
by the Karachi Stock Exchange (KSE) against ASPL are 201 and the alleged amount of claims against
M/s ACE Securities (Private) Limited (ASPL) is Rs.236 million. In view of the alarming rise in number of
unresolved complaints against M/s ACE Securities (Private) Limited (ASPL), Chairman NAB has sought
a detailed report from DG NAB Karachi regarding alleged fraud, embezzlement and cheating public
at large by the Sponsors, Directors and Management of M/s ACE Securities (Private) Limited, Broker of
Karachi Stock Exchange Limited at the earliest regarding the matter and put up a report for further
necessary action as per rules.
Chairman NAB’s Address at a Seminar at Bahria University Islamabad
Mr. Qamar Zaman Chaudry, Chairman National Accountability (NAB) said NAB is committed to
eradicate corruption across the country by using all its resources. He said the menace of corruption
leads to injustice, mistrust, lawlessness and creates a sense of insecurity, hopelessness and
despondency. In our own peculiar case the twin menace of corruption and poverty are closely
interlinked. A surge in one has a direct bearing on the other. He said this while addressing at a Seminar
on "Accountability- A vital pillar of Good Governance" at Bahria University, Islamabad. The particular
deadliness of the disease lies in its self-perpetuation. Any corrupt act or practice sets in motion a
vicious cycle in which one act of corruption becomes the source of further acts of corruption. But
many of the most convincing arguments in support of the fight against corruption are little known to
the public and remain unused in debates. He said corruption has become a cultural norm. In corrupt
societies, everyone "condemns" bribery, but everyone gives and takes bribes, because nothing is
getting done without that. To stop it all, Governments have to play a lead role and make Good
Governance as their priority because it is Good governance that ensures getting maximum benefits
for the minimum cost in terms of efficiency, productivity and quality of life. Good governance means
authorities becoming responsive and utilizing public funds prudently to ensure optimum return for
every Rupee spent from national exchequer. He said National Accountability Bureau (NAB) was
established in these compelling circumstances to fight and eradicate corruption in a holistic and
integrated manner. NAB is essentially a complaint driven organization. An exhaustive system of
cognizance of cases has been formulated to standardize the selection of cases for processing. Priority
is assigned keeping in view the case nature, the amount of monies involved, the social impact and
the number of affectees. In a recent consultative session the prioritized areas have been further
revamped. It has been decided that NAB being the apex anti-corruption body of the country should
restrict itself to inquiry, investigation and prosecution of mega corruption cases, and not dissipate its
efforts & energies in small scale corruption cases for which the Provincial Anti-Corruption
Establishments and FIA are best suited to pursue. Also top most priority will also be accorded to
complaints of corruption against NAB's own officials. NAB's personnel need to follow a strict Code of
Conduct and zero tolerance against corruption is to be visibly exhibited. We have to redouble our
efforts to come up to the expectations associated with NAB but I must bring on record the hard work
and pains taken by all ranks of NAB towards their national duty particularly in the last one year. NAB
has prosecuted corrupts and has recovered over Rs.4.5 billion of looted public money in 2014.
Bringing the total recovery to date to Rs.262.008 billion. The allocation from government to NAB for its
working since its creation is Rs.12.038 billion. This is only 4.5% of recoveries made by NAB. The number

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of complaints received in 2013 were 19900 which is double of the number of 10,500 complaints
received in 2014 from the previous year. The increase in complaints to NAB is reflective of people's
confidence in our work. To speed up disposal of pending enforcement work, it has been decided to
fix time limit for each step of enforcement i.e. Complaint Verification, Inquiry & Investigation. A total of
10 months have been laid down from start-to finish. Taking stock of the pendency it was decided in
January 2015 that all pending enforcement work shall be completed by 30th June 2015. This
undertaking has been voluntarily submitted in the honorable Supreme Court of Pakistan also which
has guided us immensely towards improvements in our working. It is in this context that PILDAT in its
latest report has rated NAB's performance at 42% based on public survey. This compares quite
favorably to 29% public confidence in Police and 26% in Government offices working. The rate of
success of NAB's prosecution work in all courts is 70%. He said since its inception, NAB has adopted the
Enforcement based approach in the fight against corruption. But I must say that corruption is too
complex a phenomenon to be controlled with the Enforcement strategy alone. Controlling corruption
on a sustainable and long term basis requires a broader vision and multifaceted strategy, which banks
heavily on Awareness and Prevention of corruption in addition to the Enforcement approach. Special
focus is therefore being given to Awareness and Prevention activities to spread the message against
corruption. NAB has established 4019 Character Building Societies (CBS) in educational institutions
across the country to build an effective edifice against corruption. An MOU has been signed in
October 2014 with HEC in this respect. He said Government's clean approach at the senior policy
levels coupled with NAB's across the board actions have already started bearing results. The latest
Transparency International report (CPI) has graded Pakistan at 126th position out of 175 countries
worldwide. This compares very favorably with the position in the previous years. In fact this is the best
position attained by Pakistan since Transparency International started its ratings in 1995. NAB has
devised a comprehensive Quantified Grading System in NAB in order to review and further improve
the performance of Officers/Officials of NAB. Under this grading system, NAB Regional Bureaus will be
evaluated at a given criteria 80% will be considered "Outstanding/Excellent", marks between 60% to
79% will be considered as "Very Good", marks between 40% to 49% will be considered as "Good",
while marks less than 40% will be considered as "Below Average". He reiterated that NAB is embarked
on the course to eradicate the scourge of corruption. But I must admit that it is a collective social
responsibility. The intelligentsia and media have to play an important role. On the part of NAB, he said
NAB is determined to perform its duties with absolute professionalism, unimpeachable integrity and
without fear or favor to anyone.
NAB’s prevention Committee on Health Department Sindh gives its recommendations.
Prevention Committee on Health Department Government of Sindh was constituted under the
Chairmanship of DG, NAB Karachi. The Prevention Committee comprised of representatives of Sindh
Public Procurement Regulatory Authority (SPPRA), Planning and Development, Government of Sindh,
Pakistan Medical Association (PMA), Drug Regulatory Authority (DRA), Health Regulatory Authority
(HRA), representative of Health Department, Sindh and Senior Legal Consultant NAB Sindh as members
of the Prevention Committee. The Chairman NAB, Mr. Qamar Zaman Chaudry, Chairman chaired a
meeting at NAB Headquarters in order to review recommendations of Prevention Committee on
Health Department Sindh. DG NAB Sindh gave presentations on the recommendations of Prevention
Committee on Health Department in the areas i.e. Hospital management including handling of
patients, issuance of medicines, medical reports and follow-up, outsourcing, record keeping of

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accounts, utilization of zakat fund and services of NGOs, medical ethics and code of conduct,
medicine procurement and tendering system, contractor's enlistment system, medical education-
private/public sector, registration, PMDC and inspections regime implementation, fee structure, rural
health system, incentives for doctors and paramedical staff for posting in rural areas, medical
equipment tendering and procurement system, role and effectiveness of health regulatory authority
and spurious drugs and quakes issues and system to fight these abuses. The first area in which the
Prevention Committee on Health Department Sindh gave its recommendation to cater loopholes is
Hospital Management & Monitoring System (Issuance of medicines, medical records, follow-up etc.).
The loopholes which were pointed out by the Prevention Committee are weak supply chain
management system including improper record keeping, lack of qualified and trained staff for
managing supply chain and recording of ghost patients (patients who did not actually receive care)
or false prescriptions. To cater to these loopholes Prevention Committee recommended that initiation
of integrated health management information system, placement of trained and skilled staff (In case
of gap), development of capacity (training, skill development) of existing human resources and
development of electronic record keeping connected with main server. Second area in which
Prevention Committee gave its recommendations is Medical Ethics and Code of Conduct. The
loopholes which were pointed out by the Prevention Committee in this area are Lack of awareness/
application of Standard Operating Procedures (SOPs) and protocols, Issues of conflict of interest such
as government physicians with financial stake in pharmaceutical or medical device companies,
medical personnel using public facilities for private purposes and Lack of appropriateness of referrals
to private consultations. The recommendations given by the Prevention Committee to cater these
loopholes are Posting of SOPs and Protocols at all facilities and diagnostic units may be made primary
tool for monitoring and supervision, development of policy for trouble shooting 'Conflict of Interest',
formulation and implementation of policy to prescribe generics of the drugs instead of brands names,
electronic record keeping of indoor and outdoor patients with attending consultant and duty officer
connected with main server, formulation of standard services delivery packages would ensure quality
and Primary Healthcare services have already been notified. Third area in which Committee gave its
recommendation is Procurement and tendering. Loopholes identified by the Prevention Committee in
this area are delays and partial releases of funds affect procurement unfavorably, lack of skills for
developing technical evaluation criteria, lack of knowledge/understanding of SPP Rules 2010 and
contract management, limited understanding of the new procurement requirements, Poor
knowledge of financial/management control, lack of skills in drafting bidding documents and lack of
availability of bio-medical engineers. Recommendations given by Prevention Committee to cater
these loopholes are Better coordination mechanism need to be established among in line
department, encoding of all procured goods and services with number and name of unit/facility may
be ensured with updated unit wise inventory, reflection of specification and precise evaluation criteria
may be made part of bidding document, ensuring maintenance of Stocks and store is carried on in
accordance of with General Financial Rules, placement of Bio-medical Engineers in all teaching
hospitals and divisional Headquarters for total quality of equipment procured and installed. Four the
area is Enlistment of Contractors. Loopholes were weakness in qualification, disqualification and
blacklisting clauses inhibited economy and efficiency in procurement system and to cater these
loopholes the recommendation were forwarded by Prevention Committee are Government of Sindh
has recently amended the SPP Rules (Notification dated 8, October 2013) and allowed per-
qualification of drugs. Fifth area was Medical Education. Loopholes were curriculum does not address
the prevention of corruption and corrupt practices, lack of pre- and in-service capacity development
and awareness on ethical and best practices, there is an existing gap in the curriculum regarding

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78
family medicine affecting the provision of general practitioner. Sixth area was Health Regulatory
Authority (HRA). The loopholes were private health sector in Sindh is largely unregulated; mostly
expenditure on healthcare in the private sector is not documented. The recommendations were
enforcement of HRA would ensure private sector regulation, accreditation, documentation and
expenditure; health care commission ordinance was issued during the tenure of interim government;
which at the moment stands time lapsed; however it has been already introduced on the floor of
provincial assembly, to be vet and passed accordingly. Seventh area was spurious drugs/ quackery.
Loopholes were weak inspection and monitoring, delay in drug testing and inspection to ensure
quality assurance mechanism and lack of systems to monitor quacks. Recommendations were
Procurement; monitoring & inspection wing is being strengthened to ensure the quality management
of drugs, replication of logistic management information system, which has been in process with
vaccine supply chain system. This would check the date and storage inadequacies of medicines
being wasted too and HRA Bill is an effective tool to address the issue of quackery. The Chairman
NAB, Mr. Qamar Zaman Chaudry approved the recommendations prepared by the Prevention
Committee on Health Department, Sindh after detailed discussion and deliberations in order to
improve good governance and provision of better health facilities to the people of Sindh at their door
steps. The recommendations of Prevention Committee now will be sent to Health Department through
Chief Minister Sindh for implementation from concerned department. Chairman NAB, Mr. Qamar
Zaman Chaudry appreciated the efforts of NAB Karachi and said corruption is the mother of all evils.
He reiterated NAB's firm resolve to check corruption and corrupt practices throughout the country. He
emphasized all officers/officials of NAB to put their best efforts in conduct of complaint verifications,
inquiries and investigations against corrupts in accordance with law, transparently and on merit.
Federal Board of Revenue News (www.fbr.gov.pk)
FBR offices, NBP branches to collect duty, taxes tomorrow
As 31-05-2015 is a public holiday being Sunday, Federal Board of Revenue (FBR), Islamabad, in
coordination with State Bank of Pakistan (SBP) and National Bank of Pakistan (NBP), has made special
arrangements for collection of duties and taxes tomorrow (Saturday 30th May, 2015). The State Bank of
Pakistan has directed settlement / clearing of FBR transactions on month end by National Bank of
Pakistan as follows:- (1) The NBP Bank branches (A, B & C) will settle their transactions on same day i.e.
30th May, 2015 with respective SBP BSC Offices for which a special clearing will be arranged at 03:00
pm. by NIFT and NBP will settle the transactions with SBP BSC by 9:00 pm. (2) Further, to facilitate
taxpayers, the NBP branches (A, B & C) will accept cash transactions at their counter till 05:00 pm. on
30th May, 2015.
NBP branches to remain open for settlement of duty, taxes on 30th
As 31-05-2015 is a public holiday being Sunday, Federal Board of Revenue (FBR), Islamabad, in
coordination with State Bank of Pakistan (SBP) and National Bank of Pakistan (NBP), has made special
arrangements for collection of duties and taxes on Saturday 30th May, 2015. The State Bank of
Pakistan has directed settlement/clearing of FBR transactions on month end by National Bank of
Pakistan as follows:- (1) The NBP Bank branches (A, B & C) will settle their transactions on same day i.e.
30th May, 2015 with respective SBP BSC Offices for which a special clearing will be arranged at 03:00
pm. by NIFT and NBP will settle the transactions with SBP BSC by 9:00 pm. (2) Further, to facilitate
taxpayers, the NBP branches (A, B & C) will accept cash transactions at their counter till 05:00 pm. on

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79
30th May, 2015. All field offices of Federal Board of Revenue will remain open from 09:00 am to 09:00
pm. on Saturday 30th May, 2015.
Maulana Tariq Jameel delivers motivational lecture to FBR officers
Renowned Islamic scholar Maulana Tariq Jameel talked on ‘Morality, ethics and public service
delivery’ to officers of FBR at Karachi today (on Monday). His talk highlighted the values of honesty,
integrity, truthfulness and strength of character as being the hallmark of public service. The talk was
delivered at Directorate General of Training & Research (Customs), Karachi. A video up link to FBR
offices also enabled officers of BS-17 and above working in field formations to hear the talk. The
officers found the lecture as inspiring and motivating. Maulana Tariq Jameel spoke on real-life
examples, Islamic traditions, sayings of the Prophet (PBUH) and verses from the Quran to accentuate
the need for virtues of honesty, truth and strength of character to deliver on the promise of civil
service. He bemoaned what he saw as a growing ‘yes-’ culture thriving on sycophancy and
obsequiousness in delivery of public services. He likened civil service to a trust of Allah reposed in men,
and urged customs and IRS officers to see their role as guardians of a sacred trust in them by both
government and the Pakistan people and explained examples from history where such trustees had
and brought their charge safe to their masters even though they would have loved to use it
themselves but did not do so as they were bound by a trust. Just like those historical heroes, the
Customs and IRS officials also needed to collect tax out of people’s pockets’ and deposit it in the
national exchequer, and rely on government and the Lord Almighty to take care of their own
livelihood. Maulana Tariq Jameel also informed officers they would be judged by Allah not on basis of
how much tax they collected but what character, truthfulness and integrity they brought into their
work, and how it benefited the public. He said a single fair decision by them was worth more than a
thousand night long vigil. He quoted from the lives of the Holy Prophet (PBUH) and Hazrat Imam
Hussain (AS), examples to illustrate how a life of poverty and privation, which is led on principles of
truth and honesty, was better than rolling in ill-gotten wealth. People die and fade away but their
character and the contribution they make to humanity by spreading truth and love stays on. He
concluded by suggesting the course of ‘change’ not through stick but through mind-making. The talk
ended on a communal dua. This is a first such coordinated action at FBR to also address ethical issues
while improving revenue collection, and tries on a different track than the decade’s old appeal to
“do more”. It is one of the many new initiatives started by Chairman FBR Mr. Tariq Bajwa to breathe a
new drive into the FBR routine working.
FBR clarifies news on negative collection by RTOs
Federal Board of Revenue (FBR) has clarified news item regarding negative revenue collection by
certain Regional Tax Offices (RTOs), saying the news is not correct as it portrays only one aspect of
work of RTO. The tax amount mentioned in the news item is only one of the many taxes collected at
the RTOs. The actual figures of total revenue collection attributed to different RTOs are evident from
following chart which clearly shows that the 11 RTOs quoted in recent news item collected Rs.420,520
million tax revenue as against Rs.4,925 million administrative expenditure that is only 1.2 per cent of
taxes collected by them during year 2013-14. It is added that during last financial year, FBR’s total tax
collection was Rs.2,254 billion and total expenditure of all offices of FBR was 0.68 % of total tax
collection. Even the office with highest collection cost had at most a 4.2 per cent expenditure and
not over 100 per cent as alleged in media. Pakistan collects federal taxes in a most efficient manner
and amongst lowest as compared to other countries. For example, Malaysia has 1.4 % tax collection

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costs and South Africa has 1.1 % cost of tax collection. Compared to 0.68 % of Pakistan, Singapore’s
revenue collection agency gets expenditure at 5 % of tax collection. FBR has collected tax last year
at increase of 17 % more over its preceding year of 2013, and this year too, will collect tax in excess of
last year. Total Tax Collection 2013-2014, RTO Karachi Collected Tax Rs.22,831,000,000/-, RTO III Karachi
collected Tax Rs.70,905,000,000/-, RTO Quetta collected Tax Rs.31,097,000,000/-, RTO Multan
collected Tax Rs.60,375,000,000/-, RTO Faisalabad collected Tax Rs.22,412,000,000/-, RTO Sargodha
collected Tax Rs.4,981,000,000/-, RTO Gujranwala collected Tax Rs.10,558,000,000/-, RTO Sialkot
collected Tax Rs.6,860,000,000/-, RTO Rawalpindi collected Tax Rs.46,898,000,000/-, RTO Peshawar
collected Tax Rs.39,404,000,000/- and RTO Abbottabad collected Tax Rs.4,199,000,000/- (overall
position/total tax collected Rs.420,520,000,000/-).
FBR Clarifies government’s policy on sugar export through land route
FBR has clarified a news item published in certain sections of the press attributing to FBR that “Sugar
export through land route does not qualify for rebate”. The official Spokesperson, FBR said that that it
was only a clarification of Policy of 2012 and does not affect current policy of the government, which
allows subsidy on land route exports through Afghanistan and Central Asia.
Competitive Commission of Pakistan News (www.cc.gov.pk)
BUSINESSES URGED TO STRENGTHEN HANDS OF CCP IN EFFECTIVE ENFORCEMENT OF
COMPETITION LAW
The Competition Commission of Pakistan (CCP) conducted an advocacy session at the Faisalabad
Chamber of Commerce & Industry (FCCI) on Thursday in which the business community was briefed
on the key provisions and mandate of the Competition Law and the significance of its effective
implementation for the business growth, consumer protection and economic progress of the country.
The advocacy session was addressed by Dr. Shahzad Ansar, Member CCP Office of Fair Trade and
Advocacy, and Ihram Ul Haque Qureshi, Member Legal, Cartels & Trade Abuse, CCP, while attended
by FCCI President Engineer Rizwan Ashraf, Senior Vice President Nadeem Iqbal Allahwala and FCCI
Members in large number. Dr. Shahzad Ansar, gave an overview of the Office of Fair Trade and what
constituted deceptive marketing practices under the Act. He urged businesses to avoid distributing
false or misleading information and making unsubstantiated claims such as "No.1 in Pakistan" or "100%
pure" etc. He said that recently CCP had fined a paint company over an advertisement campaign
where it made the claim of "No. 1 in Paints" without any factual justification to prove the claim. Ikram
Qureshi gave a detailed presentation on the overview of the Competition Act, 2010 and the
enforcement powers of CCP. He said that under the Act, CCP was empowered to take action against
anti-competitive practices such as cartels, abuse of dominant position and deceptive marketing
practices. The CCP also reviewed mergers and acquisitions that were likely to distort competition in
the market. To a question, Mr. Qureshi said that CCP was accessible to all, particularly the business
community and it was its responsibility to address their grievances pertaining to competition. He
informed the businessmen that CCP had recently started a number of inquiries against undertakings
violating the Competition Law. Mr. Qureshi also briefed the participants on the powers of CCP to enter
and search any premises, if it was deemed necessary for an investigation. He gave instances of CCP's
actions against cartels in sectors such as sugar, cement, jute, vanaspati ghee and more recently

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against automotive dealers. He also discussed the investigation procedure and how CCP dealt with
complaints assuring the audience that due process was followed by the Commission. President of
FCCI Rizwan Ashraf urged the business community to strengthen the hands of CCP for an effective
enforcement of the Competition Law. He said that the Competition Law was there to protect the
business community from exploitation and rather created a business environment based on fair
competitive practices. He appreciated CCP's friendly approach towards the business community and
requested to more such advocacy sessions in order to create awareness and sensitization about the
enforcement of the Law. The FCCI Members asked several questions pertaining to the provisions of the
Competition Act and the enforcement powers of CCP, which were answered by the CCP Members.
The advocacy session was part of an awareness program of CCP aimed to educate the business
community on Competition Law with the view to encourage and improve voluntary compliance. CCP
has previously held such advocacy sessions in Islamabad, Rawalpindi, Lahore, Karachi, Sialkot and
Multan chambers and intends to hold sessions in Quetta, AJK, Gujrat, Gujranwala, Jhelum, Rahimyar
Khan and other cities of the country.
CCP AND SECP INK MOU ON SHARING OF INFORMATION
The Competition Commission of Pakistan (CCP) and the Securities and Exchange Commission of
Pakistan (SECP) signed a Memorandum of Understanding (MoU) for sharing of information, at CCP in
Islamabad on Wednesday. The MoU was signed by Vadiyya Khalil, Chairperson CCP and Zafar Hijazi,
Chairman SECP. The signing ceremony was attended by SECP Commissioner Tahir Mahmood,
Executive Director SECP Musarat Jabeen, and Members of CCP Dr. Joseph Wilson, Dr. Shahzad Ansar,
Mueen Batlay, and Ikram Ul Haque Qureshi. The purpose of the MoU is to establish a framework for
sharing information which would help SECP and CCP in discharge of their respective statutory
functions. A formal information sharing arrangement will allow both the agencies to request and
receive information in a timely manner, thereby making the process efficient. All information
exchanged under the MoU will be kept confidential unless disclosure is required by law. The MOU
cements the enhanced working relationship developed between the two agencies. Speaking on the
occasion, Chairman SECP Zafar Hijazi said that the signing of MoU is an important development that
will enhance cooperation and coordination between SECP and CCP. He said that SECP is looking
forward to working with CCP in various areas of mutual interest. Chairperson CCP Vadiyya Khalil in her
remarks said that the MoU would not only enhance both Commissions' enforcement capabilities, but
will also aid in their research and advocacy initiatives.
CCP ISSUES POLICY NOTE TO GOVT TO WITHDRAW NICL'S MONOPOLY OVER INSURANCE OF
PUBLIC PROPERTY
The Competition Commission of Pakistan (CCP) has issued a Policy Note to the Federal Government
recommending it to amend Section 166 of the Insurance Ordinance, 2000, which currently prevents
competition in the non-life insurance market by extending exclusive rights to the National Insurance
Company Limited (NICL) with respect to insurance of public property. Section 166 (3) of the Insurance
Ordinance, 2000 provides that all insurance business relating to any public property, or to any risk or
liability appertaining to any public property, shall be placed with NICL only and shall not be placed
with any other insurer. NICL is the only state owned company, under the administrative control of the
Ministry of Commerce, which is involved in non-life insurance business in the country. CCP observed
that this statutory monopoly of NICL harms competition in the insurance market. In this case the
government is the direct consumer and is denying itself the benefits of competition such as improved

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quality of service and competitive premiums. CCP's Policy Note further states that the monopoly
position of NICL has emerged not because of business acumen but through the creation of statutory
barriers that reduce competition. It is important to note that NICL has a share in total industry assets of
22% but its share in Gross Written Premium was only 12%. Such preferential treatment for NICL creates
de facto subsidies and leaves no incentive for NICL to maximize its efficiency. Statutory monopoly of
NICL limits opportunities for potential competitors because legislative exclusive rights create barriers to
entry for the new entrants. The Policy Note recommends the Federal Government to take measures to
amend Section 166 of the Insurance Ordinance, 2000 in order to open insurance of public property to
the private sector, excluding public property that is related to national security, which will create a
level playing field for all nonlife insurers in the insurance market.
Technical Updates/News
International News - IFAC News (www.ifac.org)
New Thought Paper Released by IFAC Tears down the Risk Management Silo
With the increased volatility in the modern business environment and continuing effects of the
financial and economic crises, effective management of risk in organizations—including good internal
control—has taken on even greater importance. Effective management of risk helps organizations
achieve their objectives, while complying with legal, regulatory, and societal expectations, and
enables them to better respond and adapt to surprises and disruptions. With these key issues in mind,
the International Federation of Accountants® (IFAC®) today published a thought paper, From Bolt-on
to Built-in, on managing risk as an integral part of managing an organization. The paper positions the
management of risk as an indispensable and integral part of decision making and subsequent
execution in order for boards and management to ensure their organization makes the best decisions
and achieves its objectives. The paper also a) demonstrates the benefits of properly integrating the
management of risk, including internal control, into the governance, management, and operations of
an organization; b) provides ideas and suggestions on how such integration can be achieved; and c)
furnishes practical examples of how professional accountants in business can support their
organizations with this integration. “This paper recognizes what risk management was originally
intended to do for an organization—help support effective decision making and improve
performance,” said IFAC CFO Fayez Choudhury. “Too many organizations don’t realize how useful risk
management can be if integrated properly. Without this step—building risk management into your
organization—too many management teams are missing the point, and missing the benefits.” The
thought paper is applicable to all organizations—regardless of size or structure, public or private—
seeking to improve how they manage risk.
IESBA Progresses toward Global Standard on Responding to Non-Compliance with Laws and
Regulations; Issues Revised Proposal
The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released for
re-exposure an enhanced standard, responding to Non-Compliance with Laws and Regulations. The
proposed standard sets out a new framework to guide auditors, other professional accountants in
public practice, and professional accountants in business (PAIBs) in deciding how best to act in the
public interest when they come across an act or suspected act of non-compliance with laws and
regulations. “Fundamentally, all professional accountants have an ethical responsibility to respond in

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these situations and not turn a blind eye to them,” commented IESBA Chairman Dr. Stavros
Thomadakis. “Importantly, their response can play a role in ensuring that serious instances of non-
compliance with laws and regulations are appropriately addressed, or in deterring them. The board
intends the proposed framework to guide professional accountants’ response in these situations,
ensuring their actions serve the public interest while recognizing the essential role of management
and those charged with governance in addressing the issue.” Among other matters, the proposed
standard serves to better equip auditors and other professional accountants to address such issues by
providing a pathway to disclosure to an appropriate authority in appropriate circumstances without
the duty of confidentiality under the Code of Ethics for Professional Accountants™ acting as a barrier.
It also places renewed emphasis on the importance of senior-level PAIBs promoting a culture of
compliance with laws and regulations within their organizations. “The board believes that the
proposed framework represents a holistic, proportionate, and balanced model for addressing what
can often be complex situations,” noted IESBA Technical Director Ken Siong. “The board also believes
that the proposed standard’s enhanced guidance will support and complement legal and regulatory
frameworks in jurisdictions that already mandate reporting by professional accountants of identified or
suspected non-compliance with laws and regulations to appropriate authorities.” The development of
the proposed standard was informed by stakeholder responses to the first Exposure Draft issued in
August 2012 and other extensive consultation with stakeholders, including global roundtables in Hong
Kong, Brussels, and Washington, DC in 2014, and discussions with the IESBA Consultative Advisory
Group.
IFAC Issues Proposed Member Body Compliance Program Strategy for 2016-2018
As part of ongoing efforts to promote the adoption and support implementation of international
standards in accounting, auditing, ethics, and education, and the establishment of related quality
assurance and investigation and discipline mechanisms, the International Federation of
Accountants® (IFAC®) today released the Proposed IFAC Member Body Compliance Strategy, 2016-
2018. This proposed strategy incorporates fundamental upgrades to monitoring and reporting
mechanisms. It will help professional accountancy organizations (PAOs) meet the IFAC Statements of
Membership Obligations (SMOs), highlight adoption efforts in their jurisdictions, and help all global
stakeholders understand adoption status, as well as improvements or setbacks, on a timely basis.
“Following more than ten successful years of the IFAC Member Body Compliance Program, the new
strategy represents a turning point,” according to Fayez Choudhury, IFAC CEO. “The proposed
changes to the Program, including the creation and publication of Dashboard Reports, will increase
the accessibility and usability of relevant and up-to-date information, as well as leverage the
Program's value as a global source of knowledge on the status of adoption of international standards
and best practices by jurisdictions.” The Program serves the public interest by promoting the adoption
and supporting implementation of international standards. It influences the actions and drives the
behaviors of IFAC member bodies around the world by focusing attention and resources on the role
of PAOs in improving the quality of the accountancy profession, thereby supporting the IFAC mission
and strengthening public confidence in the global profession. In developing the strategy, the IFAC
Compliance Advisory Panel (CAP) and IFAC staff follow an agreed-upon due process under the
oversight of the Public Interest Oversight Board (PIOB).

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THE END

IFAP Newsletter May 2015

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