FIA files case against former FBR chief Shabbar Zaidi for ‘unauthorized tax refunds’

• Companies Named: HBL, Engro, SCB, MCB, DGKC, Maple Leaf.
• The period spans before and during Zaidi’s tenure at the FBR.
• Refund years reported: 2005–07, 2012–14, 2016–17.

KARACHI: The Federal Investigation Agency (FIA) has registered a corruption case against former Federal Board of Revenue (FBR) chairman Shabbar Zaidi, alleging that unauthorized tax refunds worth billions of rupees were issued during his tenure, according to an FIR filed at the FIA’s Anti-Corruption Circle, Karachi.

Zaidi is a Pakistani Chartered Accountant and former Senior Partner at AF Ferguson & Co (PwC Pakistan). He was appointed chairman of the FBR in May 2019 and left the post in early January 2020.

The first information report (FIR), filed on October 29 by Inspector Muhammad Iqbal on behalf of the state, invokes Section 5(2) of the Prevention of Corruption Act, 1947 read with Section 109 of the Pakistan Penal Code.

Assistant Director Nand Lal of FIA’s Anti-Corruption Circle has taken over the investigation. The venue is mentioned as HBL Plaza Branch, II Chundrigar Road, Karachi.

The FIR alleges that Rs 16 billion in refunds were “disbursed without authorization” to entities that were Zaidi’s clients before his appointment as FBR chairman.

The document lists the alleged amounts as follows: Rs 10 billion to Habib Bank Limited (HBL); Rs 2 billion to Engro Corporation. Rs 1.5 billion to Standard Chartered Bank (SCB). Rs 1.5 billion to Muslim Commercial Bank (MCB). Rs 0.5 billion to DG Khan Cement. and Rs 0.7 billion in Maple Leaf Cement.

The FIR further states that during Zaidi’s tenure (May 10, 2019 to January 6, 2020), an amount of Rs 8,964,500,000 dated September 29, 2019 was issued in favor of HBL “in consultation with FBR personnel”.

The amount was credited to the Central Depository Company account of HBL’s Treasury Division through Income Tax Bonds/Shares of Rs 100,000 each, totaling 89,645 bonds, with a maturity date of 29 September 2022.

The returns covered tax years 2005, 2006, 2007, 2012, 2013, 2014, 2016 and 2017, the document added.