Daily Times

While Pakistan’s foreign remittances have witnessed a healthy spike in recent years boosted by the millions of workers abroad who choose to send money to their families by official channels rather than hundi, foreign investment in Pakistan has remained stagnant. One can understand Western entrepreneurs’ reluctance to look at Pakistan as an investment destination, given a rampant image problem, institutional weaknesses and “high country risk,” but why are affluent Overseas Pakistanis refraining from investing in large numbers? This happened in China in the 1980s and India in the 1990s (in the aftermath of 1991 reforms) when Overseas Chinese and NRIs invested tens of billions of dollars back home; paving way for subsequent Western investment; especially at a time when their governments had come up with attractive foreign investment incentives. The single most important reason is the perception of the security of investment in Pakistan. Unfortunately, the perception is not unfounded.

In a country where one has to be vigilant to make sure that their property is not taken over by the qabza mafia, or one is not defrauded of one’s entire capital in a business venture, or during the purchase of property, investing in any sizeable business ventures is fraught with high risk.

For anyone living overseas, this risk increases manifold since the non-presence of any affluent individual is too tempting for qabza mafias and fraudsters to resist. Moreover, the recovery of occupied property or misappropriated/embezzled money under Pakistan’s seemingly broken criminal justice system is next to impossible, as is the expeditious enforcement of any written contract through civil courts.

If a petty fraudster can blatantly swindle so many in one city, what chances would an affluent overseas expatriate have of safeguarding their investment against much more powerful qabza mafias?

A recent incident of a 25 million fraud against a grade-22 government officer posted abroad clearly shows how hard it is for anyone in Pakistan to recover money lost to even the most brazen fraudsters, as well as how impotent the criminal justice system is in terms of handling financial crimes. While an FIR under section 406 was registered of the said incident against the alleged fraudster, K T Chaudhry, in Aabpara Police Station after much hassle, the hapless investigation officer, a mere ASI, and subsequently, an SI, had no clue how to proceed on the case because of lack of capacity to deal with financial crimes. Mysteriously, after registering the FIR, an arrest was recorded late in the night and within six to eight hours, the accused was presented before a civil judge while informing the complainant that he would be produced before the court the day after, thus ensuring that no lawyer from the complainant side could argue the case before the civil judge, who discharged the accused within minutes without bothering to hear the other side, or reviewing or calling for any evidence at all. Incidentally, the suspect’s spouse shared with her family members that the instant discharge cost her eight hundred thousand rupees. An appeal before the district judge was not heeded to on the mere technicality that the order by the civil judge constituted an administrative order and could only be reviewed by the high court, although noted jurists hold that such an order could be deemed as quasi-judicial and liable to review by a district judge.

Emboldened by this easy reprieve, the accused K T Chaudhry, reportedly, went on to deceive multiple businesses in Islamabad by issuing uncovered cheques for goods obtained, or in some cases, through mere promises to pay. In one particular case, he didn’t pay a sub-contractor Rs 2.6 million claiming insolvency, while residing in luxurious apartments in the diplomatic enclave. In an interesting twist, he is also said to have swindled some landlords of rent due by frequently changing residences within the diplomatic enclave.

Some of the most interesting aspects of this case are as to how the accused would install equipment and appliances at the premises he undertook to renovate and refurbish, take pictures or videos to send to the unfortunate contractee and after receiving additional payment remove the same from the premises within hours. In one instance, he gave an undertaking on stamp paper to deliver goods furniture, fixtures and equipment within seven days after receiving payment but subsequently just disappeared. Or the fact that he obtained the renovation and furnishing contract in Islamabad by fraudulently claiming that he had renovated a nicely renovated house in Z Block, DHA Phase III, Lahore. Apparently, so far as the police and the lower courts are concerned, all such instances do not constitute any crime but rather matter for the civil courts to decide which generally takes decades if one includes the appeals.

Despite multiple complaints against K T Chaudhry to the police by various victims of his frauds, he has been, reportedly, playing hide and seek with his victims and creditors by paying small gratification to low-level police officials and looking for new possibilities of scamming.

It is being said that if a petty fraudster can blatantly swindle so many in one city, including a highly-placed bureaucrat, and get away with it, what chances would an affluent overseas expatriate have in Pakistan of safeguarding an investment against much more powerful and sophisticated qabza mafias or fraudsters? Hence, an extremely low rate of investment by affluent expatriates in Pakistan is greatly hampering economic uplift.

Prime Minister Imran Khan, who has always shown special concern for the problems of Overseas Pakistanis and has been encouraging them to invest in Pakistan, should duly take notice of such injustices.

The writer is Associate Editor (Diplomatic Affairs), Daily Times. He tweets @mhassankhan06