Famous Banks Caught Red-Handed in Facilitating Rs. 117 Billion Over-Invoicing in Solar Panel Imports

Officials of the Federal Board of Revenue (FBR) informed the Senate Standing Sub-Committee on Finance and Revenue that commercial banks facilitated a mega-scale money laundering scam under the guise of solar panel imports worth Rs. 117 billion. The Revenue Division uncovered over-invoicing worth Rs. 69.5 billion between 2017 and 2022. During this time, there was capital flight abroad instead of using this amount of money for legitimate trade. FBR officials informed the committee that 63 importer companies were shortlisted in the over-invoicing scam. The committee expressed serious concerns over how companies with minimal paid-up capital conducted business worth billions. One company with Rs. 2 million capital managed transactions worth Rs. 50 billion, while another with Rs. 10 million capital carried out Rs. 40 billion in trade. The inquiry also examined commercial banks’ role in facilitating these transactions. The State Bank of Pakistan (SBP) imposed fines exceeding Rs. 200 million on banks, but the committee questioned why only minor penalties were issued. One senator demanded clarification on the central bank’s actions against banks involved. Officials confirmed that funds were transferred to multiple countries, including the UAE, Singapore, Switzerland, the US, Australia, Germany, Canada, South Korea, Sri Lanka, and the UK. The Financial Monitoring Unit (FMU) had flagged suspicious transactions as early as 2019 but sent just 28 Suspicious Transaction Reports (STRs) to the FBR. The Senate committee criticized the delayed response and called for a detailed report from the SBP, FMU, and FBR to determine the case. Bank officials disclosed that private companies executed multiple transactions. One company called Bright Star made four transactions worth $185 million and Moonlight conducted two transactions worth $49 million. A total of $427 million in over-invoicing and money laundering was reported in the case. The committee pledged to continue this probe to punish all those involved in the scam.