Major forex dealers arrested: FIA to seek Interpol assistance in forex scam

[Naveed Yaseen]

Clampdown on foreign exchange firms: FIA nabs four for illegal trading of dollars
RIZWAN BHATTI
KARACHI (November 09 2008): At least four money changers, including a CEO of a leading company, were arrested on Saturday by Federal Investigation Agency (FIA) on directives of Interior Ministry to start raiding suspected exchange companies, to curb cross-border smuggling of dollars, sources said.

The crackdown had a positive impact on rupee value which in some cases shot up by 100 paisa against dollar in the open market. Sources said that the State Bank of Pakistan (SBP) was conducting a probe into the exchange companies for last three weeks to ascertain reasons for hike in the value of dollar. However, as the central bank lacked legal support Foreign Exchange Regulations Act (FERA) 1947, it could not do anything effective against the exchangers, they said.

Therefore, the SBP recently requested the government to clamp down on exchange companies suspected of involvement in what the bank claimed 'dollar monopolisation', sources said. Thereby a special FIA cell was set up by the Ministry of Interior after SBP request to investigate and, if found guilty, take legal action against exchange companies suspected of smuggling and illegal transfer of dollar.

Sources said a special FIA team, led by Mir Zubair, raided the head office of Khanani & Kalia International (KKI), a leading exchange company located at Saima Trade Tower I I Chundrigar Road, late at night between Friday and Saturday. According to sources, the raiding party took all record, computers, harddisks and data of foreign currency on transactions in their custody and sealed the office. Some four employees of the company were also arrested.

They said those arrested included Munaf Kalia, CEO, KKI, and general secretary of Exchange Companies Association of Pakistan, Karachi and Anees, Jaweed and Saleem Lahore on charges of illegal trading and cross-border smuggling of foreign exchange, particularly the dollar.

On Thursday, an FIA team Lahore raided a franchise of KKI in Gujranwala and arrested two employees, with some evidence of illegal currency transfer, said sources, adding that the Karachi raid was a continuation of Thursday crackdown. They said the Agency had decided to shift the arrested KKI staffers Karachi to Lahore, where an FIR has already been launched against the exchange firm.

Meanwhile, a delegation of exchange companies met FIA officials in Karachi and requested for release of KKI employees, but the request was turned down before completion of investigation. However, a positive impact of the crackdown was witnessed in the currency market, where the rupee climbed by Re 1 to Rs 80.50 Rs 81.50 to a dollar.

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