Saudi Investors File Writ Petition Against Federal Investigation Agency
Karachi Electric’s Saudi investors, represented by White Crystals Limited, have filed a writ petition with the Islamabad High Court (IHC) requesting action against the perceived inaction of the Federal Investigation Agency (FIA). The investors allege that the FIA has failed to respond adequately to a critical complaint they previously submitted regarding the potential misappropriation of Rs10.5 billion of foreign investors’ funds.
White Crystals Limited, a subsidiary of the Saudi conglomerate Aljomaih Group, has a significant stake as a foreign investor in Pakistan. In their complaint to the FIA, the group claims to have made a direct investment of US$10 million in the Infrastructure and Growth Capital Fund LP (IGCF), which indirectly invested in a publicly listed company on the Pakistan Stock Exchange.
According to the complaint, the IGCF sold a substantial portion of its interest in the firm to Busicentco Incorporated for approximately Rs10.5 billion in a 2021 transaction. However, the investors, including White Crystals Limited, now allege that there have been irregularities in the handling of these sale proceeds. They claim that the funds were transferred to a bank account held by Cynergico Mu Incorporated (C-Mu Inc.), a Mauritian entity partially owned by IGCF-OGL, instead of being held for the benefit of IGCF’s limited partners, which includes White Crystals Limited.
The investors argue that the funds were inaccurately portrayed as the property of C-Mu Inc., potentially causing harm to IGCF investors like White Crystals Limited. They also allege that the transfer of the sale proceeds occurred under dubious circumstances, with the application for repatriation to the State Bank of Pakistan (SBP) being inexplicably withdrawn under instructions from C-Mu Inc. This action, the investors claim, has jeopardized their chances of accessing any sale proceeds outside of Pakistan.
The investors have raised questions about the legitimacy of the sale proceeds being held in a bank account belonging to DW Pakistan Private Limited (DWPL). The DWPL is majority owned by Shaheryar Arshad Chishty, with Danyal Arshad Chishty as a shareholder and director. The investors have also expressed concerns about the withdrawal of the repatriation application without informing the limited partners.
The investors believe that there may have been potential wrongdoing in the mode and manner of transfer to the DWPL. They argue that Shaheryar Arshad Chishty, who now controls the IGCF, misled the limited partners into believing that the sale proceeds were secure while transferring approximately Rs10.3 billion to DWPL, which is controlled by Chishty himself. The investors allege that these actions were done under an “escrow agreement”.
White Crystals Limited has previously been involved in a legal battle with Shaheryar Arshad Chishty over the management control of K-Electric. Lawyers for White Crystals Limited state that they reached out to the CEO of a bank in Pakistan seeking answers but received no response. As a result, they decided to file a complaint with the FIA in August 2023.
The investors claim that multiple offenses, including criminal misappropriation of property and cheating, may have taken place. They argue that the FIA has the authority to investigate such offenses under the Federal Investigation Agency Act 1974. They also suggest that if the transfers violate SBP regulations or involve offenses, they could potentially constitute money laundering under the Anti-Money Laundering Act 2010.
White Crystals Limited has approached the IHC, seeking its intervention to compel the FIA to consider their complaint and launch a comprehensive investigation. The writ petition filed with the IHC requests the court to issue appropriate directives to the FIA for swift and impartial action in accordance with the law. A spokesman for the FIA confirmed that they were in receipt of a complaint and reminders from lawyers representing White Crystals Limited.
When asked for comment, Shaheryar Chishty stated that he had not yet seen the IHC petition and could not provide further information at this time.
More detail via The News International here… ( Image via The News International )