Summit Bank audit report: A ticking time bomb?

Following the confusion surrounding orders for the arrest of former president Asif Ali Zardari, should the Karachi-based banking court that issued the order in the money laundering case simply ask for the latest four-year audit reports of Summit Bank?

Or, will it take a Supreme Court suo moto for the audit, carried out by the State Bank of Pakistan, to be placed before the court for ascertaining of facts and taking the case to its logical conclusion?

These reports, according to officials privy to the investigations, carry enough proof to indict the suspects in the Rs.35 billion probe.

The banking court has set September 4 deadline for the arrest of all those involved or suspected of involvement in the case. If the court wants to judiciously conclude this case – without any political consideration – then there is no way it can let persons under the spotlight escape legal action under anti-money-laundering laws of the country.

The arrest warrants for 19 suspects, including Zardari, were issued in view of the finding that certain individuals were involved in transactions worth billions of rupees through 29 ‘benami’ (fake, title-less) accounts, 16 in Summit Bank, eight in Sindh Bank, and five in United Bank Limited. The case revolves around a 2015 inquiry by the Federal Investigation Agency (FIA) into these suspicious transactions. But apparent political expedience led to the shelving of the case.

Among those found involved in these suspicious transactions are Hussain Lawai, former chairman of the Pakistan Stock Exchange; and Khawaja Anvar Majeed, chairman of the Omni Group of Companies. Both, known to be close aides to Zardari, are under arrest.

What had alarmed State Bank in 2014-15 were unusually swift transactions in the three banks under scrutiny. “Senior officials at these banks would clear transactions even worth Rs200 million following a single phone call from a former president,” say bank officials.

The successful conclusion of the Summit Bank probe will lend credence to Pakistan’s efforts against money-laundering and anti-terror financing. The country is already on the Grey List of the global Financial Action Task Force (FATF). A FATF delegation recently reviewed the current banking regime and, according to some officials, expressed dissatisfaction on some of the laws relating to money laundering and anti-terror financing.

The Summit Bank audit report is a ticking time bomb that – if handled indiscriminately – can make those responsible for suspicious transactions pay for their actions. This perhaps explains why the Zardari-led PPP wriggled out of a public commitment and turned its back on Shehbaz Sharif, the Prime Minister candidate fielded by the so-called joint opposition in its hopes to mount a strong front against Pakistan Tehrik-e-Insaf (PTI). The PPP’s preoccupation is to surmount the immediate legal challenge that is upon its head.

Published in Daily Times, August 18th 2018.