KARACHI, 26 September 2004 — The Corporate Crime Circle of the Federal Investigation Agency has unearthed the biggest scam in Pakistan’s history in the insurance sector, valued at more than 950 million rupees. The mastermind of the fraud has been arrested.
Agha Wasif Abbas, the deputy director of CCC, said a team of inspectors raided the office of M/s Trans Asia Consultants, near the Civic Center and arrested Saeed A. Shah, the owner of the office and mastermind of the scam.
During the raid, FIA recovered fake treaties, forged reinsurance guarantees, cover notes, stamps and other related documents of the Provident Capital Indemnity Limited (PCIL), a company registered in San Jose, Costa Rica. Reinsurance guarantee is compulsory under the country’s insurance law.
The owner of the firm, with the connivance of several insurance companies has been hoodwinking the Securities and Exchange Commission of Pakistan (SECP), which had been causing losses of millions of rupees to the national exchequer, Abbas said.
“Dr Saeed, the owner of Trans Asia, assisted several insurance firms to undertake insurance business over and above their financial worth,” he said, and added that the insurance companies in turn submitted doctored accounts, financial statements supported by forged guarantees of PCI to the SECP, Income Tax and Central Excise departments. By presenting these fake accounts, the insurance companies have saved on government revenues and undertaken the insurance liability beyond their financial mandates, he said.
Saeed was questioned with regard to reinsurance backup, validity of cover notes and treaties given by him to different insurance companies in Pakistan on behalf of Provident Capital Indemnity of which his firm is the broker for Pakistan, particularly in presence of undertakings from insurance companies to the effect that subsequent to these treaties they will not lodge any claim or cash call. But he could not give any satisfactory reply, Abbas said.
