ISLAMABAD: National Assembly’s Public Accounts Committee (PAC) on August 9, 2023, referred “Creek Marina Project” Karachi case to the FIA for an investigation.

The Creek Marina project was launched in the year 2005 and was advertised as a partnership between the Defence Housing Authority (DHA) and the developers, a consulting firm based in Singapore, named Meinhardt.

Meinhardt set up a local company, Creek Marina Private Limited (CPML) to oversee the marketing and construction of the project.

Despite the passage of 18 years, Meinhardt Singapore has not completed the project.

In response to a letter from an affectee of the project, Syed Daanish Ghazi, partner/ head of litigation M/s Ghazi & Magsi, the PAC directed the FIA, “Any irregularity involved in the matter then it may be included in the blacklist as per rules… the comprehensive report, thereof, be furnished to this secretariat at the earliest”.

In a letter it has been alleged that the company, through another shell company registered in Singapore, opened accounts in local banks without registering itself with the Board of Investment, the Securities Exchange Commission of Pakistan, and the State Bank of Pakistan, and the public was asked to deposit money for advance bookings and investors were asked to deposit working capital against promise of partnership.

More than 300 families deposited Rs2.5 billion in the above accounts, but Meinhardt transferred this money to foreign countries.

The letter maintained that the allottee-victims who submitted their deposits approached the FIA that they had booked their apartments in the Creek Marina project but despite the passage of 18 years, Meinhardt Singapore has not completed the project and handed over the flats. The FIA has added the name of the company owners.

According to the details shared with PAC, in 2003, a Pakistani origin Nasim Shahzad, as a representative of Meinhardt, signed an agreement with the DHA Karachi for the lease of 92,000 square yards of land (19 acres) of prime waterfront land in DHA-Karachi Phase 8. The current value of this land is upward 150 million dollars as per today’s market.

According to this agreement, Meinhardt was to complete the project within three years but failed to despite nearly two decades of extensions by the DHA.

In this regard, Meinhardt established a company called Creek Marina (Private) Limited in whose name 19 acres of land now vests under sub-lease. Under this agreement, Singapore company Meinhardt Singapore Pte Limited was responsible for designing, constructing, developing and marketing the luxury flats on the land given by DHA against no payment whatsoever.

The DHA undertook this enterprise of transferring billions of rupees of land to a company with no experience in construction and development, only design and consultancy, with the remote hope that one day the project will be constructed and the DHA would receive 15 per cent of the apartments constructed.

The company was supposed to complete these luxury apartments and hand them over to its customers by December 31, 2009. The project could not be completed within the stipulated period. It is estimated that nearly 60 per cent of the purchase price has collectively been paid by the allottees.

By this estimate, Rs5 billion has likely been collected from allottees but the amounts available in the accounts of the project are less than half.

Construction on the project was halted in 2010. Chinese contractors hired by Creek Marina (Pvt) Limited with the amounts collected from allottees had abandoned the project. Performance guarantees of the Chinese contractors were eventually encashed by Creek Marina.

However, rather than disbursing roughly Rs1 billion into the accounts of the project, an attempt was made to siphon off the money through an illegal fake account of a sister concern, Creek Marina Singapore Pte Ltd, registered in Singapore, in order take the amounts abroad and in favour of one local partner Aftabuddin Qureshi.

Upon taking notice of the attempts to siphon off funds from Pakistan, the DHA filed cases with the allegation of money laundering in the Sindh High Court and had the accounts stayed. However, both cases were withdrawn despite serious allegations of fraud and unlawful enrichment.

Copyright Business Recorder, 2023