ISLAMABAD: The FBR’s Directorate of Intelligence & Investigation (I &I) has registered an FIR on the allegation of money laundering for paying personal liabilities worth billions of rupees from the account of a non-profit organisation in the case of one pharmaceutical company based in Karachi and five of its directors.
According to the FIR, one pharmaceutical company registered in Karachi also has a non-profit educational trust owning a reputed university and boys’ and girls’ schools.
A feud erupted when the founder of the company, along with his son, filed a suit in the Sindh High Court, claiming Rs60 billion in damages following grave allegations against the five directors personally.
A settlement agreement was executed in December 2023, wherein an amount of Rs7.5 billion was agreed upon. That amount was required to be paid by the five directors in their personal capacity, however, they managed to make payment by the company they controlled.
The company recorded the Rs7.5 billion settlement payment in its books of account as a “business expense” (classified under “Other Indirect Expenses”) and claimed it as a deductible expense in its income tax return for Tax Year 2024.
Simultaneously, the five directors did not declare the Rs7.5 billion amount as salary, perquisite, or benefit in their individual income tax returns for Tax Year 2024.
Later, the company’s founder filed a complaint in the FBR’s Directorate of I &I, Karachi, in February 2025.
Following due diligence, notices under Section 176(1) of the Income Tax Ordinance (ITO), 2001 (civil liability) and under the Anti-Money Laundering (AML) Act, 2010 (criminal liability) were issued to all five directors in April 2026. According to the FBR, replies were received but were found unsatisfactory and unsupported by evidence. The FBR thus registered an FIR on 23rd April, 2026.
The whole issue came into the limelight when Zahid F Ebrahim, in his X post, stated that the FBR issued a notice to the CEO to explain that the income tax was never received. Same officer, same day---before any reply----issues a second notice accusing the CEO of making a false statement. Days later: FIR filed under Anti Money Launder Law. Arrest sought. Bank accounts targeted. This is not due process. This is a shakedown.
When contacted, FBR’s I&I officials said the two notices were issued to serve distinct legal purposes — the Section 176 notice pursues civil income tax liability, while the AML notice pursues criminal liability — and were issued after more than 14 months of investigation. Similarly, separate notices under ITO, 2001 & AML Act, 2010, were issued to all five directors. Moreover, the non-profit entity status as a non-profit organisation had already been revoked by the Large Taxpayers’ Office, Karachi, on the specific ground that the five directors had used donation funds of the company’s accounts for personal benefit, which was precisely the conduct now under prosecution, they concluded.
