Hearing against Sharif family: Zia says sale proceeds of GSM never reached Qatar, UK, Saudi Arabia

Key prosecution witness Wajid Zia Wednesday told the Accountability Court hearing corruption cases against Sharif family members that the sale proceeds of Gulf Steel Mills (GSM) had never reached Qatar, United Kingdom (UK) and Saudi Arabia.
While testifying before Accountability Court Judge Muhammad Arshad Malik in Flagship Investments reference, Zia said the joint investigation team (JIT) that probed Panama Papers case concluded that the sale proceeds of GSM had never reached Qatar, UK and Saudi Arabia (Jeddah).
The witness further said no evidence was provided to the JIT regarding the claim that the GSM was set up with loan and zero equity. Tariq Shafi, a relative of Sharif family who was the ostensible owner of GSM neither received any amount from Abdur Rehman Kayed Ahli nor paid any amount to the Qatari Royal family, he said.
Former Prime Minister Nawaz Sharif was present in the courtroom who was later allowed by the court to leave. The witness said accused Hussain Nawaz and Hassan Nawaz had submitted civil miscellaneous application (CMA) and concise statement, which basically explained the acquisition of the Avenfield apartments.
He said CMA explained that GSM was established in Dubai by Mian Muhammad Sharif, father of Nawaz Sharif, in 1974 with Tariq Shafi was the ostensible owner. In 1981, 75 percent shares were sold which went to Abdur Rehman Kayed Ahli to clear liabilities of the bank and a new company name Ahli Steel Mills was formed with Tariq Shaif having 25 percent shares on behalf of Mian Muhammad Sharif while 75 percent shares were owned by Abdur Rehman Kayed Ahli.
He said that in 1980, 25 percent shares owned by Tariq Shafi had been sold to Ahli for AED 12 million and the amount had been invested with the Qatari Royal family. The accused Hussain Nawaz was the beneficiary of the investment and settlement was reached in 2006 resultantly the ownership of the Avenfield apartment was given to Hussain Nawaz.
The witness said that in the same CMA, an affidavit of Tariq Shafi dated November 12, 2016 explained setting up and sale of GSM in 1974 with Muhammad Hussain as the other partner. It was explained that the GSM was set up with the loan taken from the bank and zero equity, he said.
Zia said the sale of 75 percent shares of GSM to Ahli in 1978, the setting up of Ahli Steel Mill Company with 25 percent shares owned by Tariq Shafi and 75 percent shares by Ahli, and the sale of these 25 percent shares sold by Tariq Shafi to Ahli in 1980 through an agreement for a consideration of AED 12 million in six instalments were explained in the CMA.
He said that second affidavit of Tariq Shafi which was annexed with CMA No 432 submitted by accused Hussain and Hassan Nawaz further explained that the amount of EAD 12 million was sale proceed of 25 percent shares of Ahli Steel Mill that was received by Tariq Shafi from Ahli and deposited with Fahad Bin Jasim Al-Thani.
Zia said JIT recorded the statement of Tariq Shaif and infirmities and contradictions were analysed, adding Shafi could not produce any documents like bank record, memorandum and article of association to support his contentions.
The witness said that Shafi also could not explain the role of another partner Muhammad Hussain who was not involved in running of the business.
"Shafi also did not produce any receipt that he had got from Ahli for EAD 12 million as well as the receipt from representative of Fahad Bin Jasim. In his statement before the JIT, he changed his stance given in the affidavit that he handed over the cash amount to Fahad Bin Jasim and while recoding his statement he said he handed over cash in instalments to his representative," he said.
He said JIT concluded that Tariq Shafi had neither received the amount of 25 percent shares claimed from Ahli nor had handed over this amount to Fahad.
The witness said that a sale agreement for sale of 75 percent shares of GSM to Ahli 1978 was annexed with CMA No 7531. The agreement is a three-party agreement among Tariq Shafi, Ahli and Bank of Credit and Commerce International (BCCI), whereby all AED 21 million, which was the amount to be paid as price of 75 percent shares, were to be paid to the BCCI to settle the outstanding liability of the bank, he said.
He said there was an additional liability of AED 14 million which, according to the agreement, was responsibility of Tariq Shafi to clear. He said that another partnership agreement was also annexed with the CMA No 7531 which was reached for establishment of Ahli Steel Mill with 75 percent shares with Ahli and 25 percent shares with Shafi.
Zia said that another sale agreement dated April 14, 1980 was also annexed with CMA No 7531 which was between Ahli and Tariq Shafi represented by his authorized representative Shehbaz Sharif. The signature block of this agreement also read that Tariq Shafi was represented by authorized representative Shehbaz Shrif. Both Shebaz Sharif and Shafi, however, in the statement before the JIT disowned this signature.
He said the same agreement also speculated about bank guarantee for the payment that was to be made. The agreement bears the stamp of Dubai court, he said.
Zia said the JIT received the response of its mutual legal assistance (MLA) request from the United Arab Emirates (UAE). This MLA response certified after searching Dubai court system record recording Ahli Steel Mill, erstwhile GSM. The share sale agreement of 25 percent share of Ahli Steel Mill for April 14, 1980, according to the record, did not exist, he said. He said that no transaction of AED 12 million regarding sale of 25 percent shares of Ahli Steel Mill by Tariq Shafi ever took place as well as no record could be found to show that notarization of the document was ever done by Dubai notary public, he said adding that the MLA response also informed that no banking record was found for the transaction of AED 12 million from Ahli to Tariq Shafi. The share sale agreement of April 14, 1980 was found to be fake, he said.
The witness said that the JIT also investigated another question relating to the liabilities of AED 14 million that was responsibility of Tariq Shafi to clear according to the share sale agreement of 75 percent of GSM in 1978. This liability included an amount of AED 6 million to BCCI, he said.
He said the response of the UAE to MLA also provided an enclosure whereby Tariq Shaif was sentenced for defaulting on a loan that he had obtained from BCCI through account that had been opened by Tariq Shfi with BCCI in 1986. As per banking practices, the opening of a new account is not possible if the person is already defaulter of the bank, he said.
The witness said that this clearly shows that liabilities were cleared by none of the accused or Shafi could provide a satisfactory answer how they cleared the liabilities. The court adjourned the hearing till today (Thursday) and Zia will continue recording his statement.