By Arshad Sharif
Islamabad, January 15: Qaumi Watan Party (QWP) Chairman, Aftab Sherpao, managed to save US$3,500,000 million stashed in a secret bank account in Jersey by becoming the interior minister of Pakistan in the cabinet of former military ruler General Pervez Musharraf, reveals an order of settlement in Broadsheet vs Pakistan arbitration case.
However, for the secret deals struck to make a King’s party for General Musharraf, Pakistani tax payers paid US$210,000 to Broadsheet as part of US $28.7 million damages claim settlement in London.
According to the order of settlement in Broadsheet damages claim, Mr. Sherpao became a registered target in August/November 2002.
The order mentions a detailed chronology of events revealing backdoor wheeling dealing and arm twisting in the name of accountability during the years 2000 to 2004 leading to settlement of cases if one joined General Musharraf’s government.
However, the cost of such secret deals has cost Pakistani tax payers millions of dollars as damages claim by Broadsheet LLC in London.
The order gives a chronology of events starting from filing of reference against Mr Sherpao to meetings with the then Chairman NAB Lt General Munir Hafeez and subsequently taking oath as Interior Minister in August 2004.
As per the order, General Khalid Maqbool, the then Chairman NAB filed a reference against Mr Sherpao in November 2000 and instructed the Assistant Director of the FIA to investigate.
Assets of Mr Sherpao, totaling about US $5 million (Rs.264,796,552.88), were frozen pending his Report.
The Report in May 2001 found that Mr. Sherpao “abused his authority, indulged in mal-practices and corruption on large scale and accumulated moveable and immoveable properties in his own names and in the names of his dependents” whilst Chief Minister of the NWFP (North West Frontier Province) and that the value of their properties was “grossly disproportionate to his/their known legal source of income”.
In July 2002 Broadsheet informed NAB that it had located assets belonging to Mr. Sherpao in a bank account in Jersey. The account was in the name of a Trust owned and/or controlled by him and a total of US$3,500,000 million was held in it. Broadsheet asked NAB to make a formal request to the Jersey authorities for a freezing order in respect of its claims and meanwhile imposed a temporary freezing order.
NAB supplied the requested letter on 30 August 2002 but in general terms (“there are ongoing court proceedings”) without specifying specific causes of action as the Jersey Court required.
Broadsheet, in October/December 2002, provided a negotiating strategy for NAB including a draft RLA (Request for Legal Assistance) with no response from NAB.
In March 2003 Broadsheet informed NAB that they would be meeting the Attorney General of Jersey and asked for further instructions.
Mr. Talat Ghumman, the then senior official in the Accountability Bureau, replied on behalf of NAB by letter dated 18 April 2003 stating that NAB was waiting to hear from Pakistan’s Tax Authorities and that the draft RLA was being examined and that they should await his further response. There was no further reply.
On 20 September 2003 the Crown Advocate in Jersey contacted Broadsheet’s lawyer asking for “an update as to the Sherpao matter”. Before he could provide one, Broadsheet received the Respondents’ solicitors’ letter dated 28 October 2003 purporting to terminate the ARA.
On 30 January 2004 the lawyer acting for the government of Jersey wrote directly to NAB asking for detailed information regarding any prosecutions, ongoing or otherwise, against Mr. Sherpao. He expressed his “extreme concern at the lack of progress” and said that failing a reply the funds would be unfrozen. There is no evidence of a reply and the funds were later released without any recovery by NAB or Pakistan.
Mr. Talat Ghumman, in his Witness Statement in the arbitration proceedings said that he attended a meeting between the chairman of NAB, General Hafeez, and Mr. Sherpao where the letter from Jersey was discussed.
Mr. Ghumman said in evidence that Mr. Sherpao “did not have any answers to our enquiries” and that he felt that “we were very close to obtaining assets from Mr. Sherpao” but that by the time he left NAB in August 2004 “we had not managed to do so”.
When he was asked about this in July 2018 his evidence was confused and unsatisfactory. He insisted that the reason why the case against Mr. Sherpao could not be pursued during his time at NAB was because the Court in Pakistan acquitted Mr. Sherpao of wrongdoing and the rule against ‘double jeopardy’ applied. However, he could not explain why, in that case, the NAB investigation was continuing as apparently it was when the above meeting took place; nor why it continued, as it did, until as late as 2015.
The settlement order noted that Mr. Ghumman suffered from ill-health and may have done so before he left NAB in August 2004.
“Making due allowance for this, I FIND that Mr. Sherpao remained under investigation by NAB and a registered target for the purposes of the ARA at least until August 2004,” the order mentioned.
The settlement order then mentions events which raise questions about the accountability process.
On 25 August 2004, Mr. Sherpao was appointed the Interior Minister of Pakistan.
In November 2006 NAB filed a Supplementary Reference against Mr. Sherpao which accused him of committing “acts of corruption”;
In August 2007 Mr. Sherpao submitted a return to NAB regarding foreign assets, including bank accounts in Jersey, stating that all “have been generated through agricultural income, on which I pay regular income tax” and claiming that funds were routed to Jersey “for portfolio investments via London and Switzerland.
In October 2007 the government of Pakistan issued a National Reconciliation Ordinance.
In October 2008 NAB wrote an open letter stating that no case was pending against Mr. Sherpao “in this Bureau”. However, in January 2010 the Director General of NAB authorised an investigation into the original reference of Mr. Sherpao in October 2000.
On 29 September 2011 the Supreme Court off Pakistan “affirm[ed] Mr. Sherpao’s acquittal” in a case concerned with certain plots of land.
On 15 August 2015 the Executive Board of NAB closed the investigation into Mr. Sherpao’s assets against the recommendation of its Prosecution Division which had reported “Investigation is incomplete and defective one. Case may not be closed until its logical conclusion”.
According to findings mentioned in the order, Broadsheet alleged that had the investigations continued, NAB would have recovered the funds held in the Jersey account amounting to US$3.5 million and would have been obliged to pay 20 per cent of that amount namely US$700,000 to Broadsheet.
“There is no clear explanation of why NAB failed to take action to make the recovery either in 2002/3 when Broadsheet informed it of the bank account or in January 2004 in response to the letter from the lawyer for the government of Jersey inviting it to do so. The letter went so far as to say “Jersey wants to assist Pakistan. It cannot do that without Pakistan’s assistance”.
The Government of Pakistan submitted in the case that NAB did not have sufficient evidence to succeed in any claim against Mr. Sherpao’s assets.
However, the order noted, “That is not easy to reconcile with the written evidence that following the Chairman’s meeting with Mr. Sherpao in about February 2004, Mr. Ghumman thought that Mr. Sherpao had no answer to their queries and that they were close to recovering assets from him. And there is no evidence that that was in fact the reason why no action was taken.”
“Nevertheless, the fact remains that NAB had the opportunity to pursue a claim against the asset in Jersey which Mr. Sharpao has acknowledged was his or his family’s property. There is evidence that a claim was justified and there is no clear explanation why none was made. I am entitled to assume that NAB would have performed its statutory duties following termination of the ARA. If Broadsheet had continued to be involved, given its established links with the authorities in Jersey, there was a greater chance that NAB would be induced to press its claim for recovery of the asset there.”
“I FIND AND HOLD that there is a significant chance that NAB would have recovered the amount that was held in the bank account in Jersey, and that it would have done so by 31 December 2004,” reads the order for settlement.
The order said the net recovery would have been apprixmately 90 per cent of US$3,500,000, equalling US$3,150,000. One-third of that figure is US$1,050,000 and Broadsheet’s entitlement under Clause 4 of the agreement therefore would be US$210,000.