7. According to the wealth statements filed, the value of the assets owned by the Prime Minister and his spouse comes to around Rs 2 billion-an increase of over a billion in just four years. The value of his assets in 2011 was Rs 166 million, which swelled to Rs 261.6 million in 2012 and then to Rs 1.82 billion in 2013, making him a billionaire. Then, in 2014, the declared value of his assets rose to around Rs 2 billion. Premier Nawaz Sharif received over Rs 215 million as gift from his son in 2015. He had previously received remittances from his son, worth Rs 239 million and Rs 197.5 million in 2014 and 2013, respectively. Did his son declare this amount where he is taxed? No evidence was produced in the Supreme Court despite specific direction to this effect.
8. In contradiction to statements given on the floor of the House, funds of Qatari prince were shown as seed money for business and property in London. If Qatari prince was business partner of late Muhammad Mian Sharif, as claimed in Supreme Court, why he never declared business capital and profit in his income tax and wealth tax declarations as he was resident of Pakistan from 1980 to 1999.
9. As per declarations filed with FBR/ECP, a huge amount of Rs 111,110,000 was withdrawn in cash from bank accounts by Nawaz Sharif. This indicates that the gifts from abroad were aimed at reducing the net wealth to match the available resources. Since these gifts were in violation of section 39(3) of the Income Tax Ordinance, 2001 Nawaz Sharif has apparently avoided tax.
10. The question whether Maryam Safdar was dependent of Nawaz Sharif or not is purely legal. This technical term is wrongly translated as "zair-e-kafalat". For the purpose of section 12 of ROPA and section 116 of the Income Tax Ordinance, 2001, the word dependent has special connotation to include any person whose assets and expenses are funded by another person. It does not mean "needy" but "reliant" for assets and expenses. It is evident from the following income tax and wealth declarations of Maryam Safdar (her CNIC 2520158274244 shows name as 'Marriyam Safdar' and under this name she obtained National Tax Number 1308504-2 on 12 October 2001 c/o Chaudhry Sugar Mills) that she has been dependent on Nawaz Sharif:
===================================================================================
Tax Year Income declared Personal expenses Excess personal Gifts during
as per declared as per expenses over the year by
Tax Return Tax Return declared income Nawaz Sharif
===================================================================================
2012 Rs 2,314,917 Rs 3,580,458 Rs 1,265,541 Rs 51,624,000
2011 Rs 32,283 Rs 2,295,560 Rs 2,263,277 Rs 31,700,000
===================================================================================
Personal expenses declared are mainly related to travelling whereas utility expenses, children's education expenses and other household expenses are not shown (living with father). Similarly though BMW vehicle as a gift from UAE is declared but its running & maintenance expenses are not shown. Her entire net wealth of Rs 172,963,168 as on 30/06/2012 is reconciled through gifts from father.
11. Maryam Safdar filed her income tax returns under section 114 of Income Tax Ordinance, 2001 for tax years 2010, 2011 and 2012 at NTN.1308504-2 as per nomination papers filed by her spouse. In wealth statement as on 30.06.2011, Nawaz Sharif declared land with the description "land in the name of daughter Maryam Safdar" at Rs 24,851,526. In the very next year that is wealth statement as on 30.06.2012, he did not declare this property. According to concise statement filed in the court, Nawaz Sharif received payment for this property from his daughter. This is factually wrong. In wealth statement of Maryam Safdar as on 30.06.2012, a new agricultural property with the description "140 kanals 03 marla land at Mouza Sultankey" appears for value of Rs 41,996,191. This cannot be the same property because had it been statedly sold for the same consideration ie Rs 24,851,526 it should have been declared by her and if the said property was sold at premium, the resultant gain of Rs 17,144,665 (41,996,191-24,851,526) should have been declared by Nawaz Sharif.
12. It is clear from documents filed by Muhammad Safdar that Maryam Safdar for all her properties and expenses has been receiving gifts from father. Thus in legal terms, she was dependent on her father. In 2010, she had no agricultural land or any agricultural income. For acquiring land and showing agricultural income from tax year 2011 onwards, she received gifts from father. In terms of sections 108, 109 read with section 85, all the assets were that of Nawaz Sharif as he funded the same.
13. In her wealth statement as on 30.06.2011, a new agricultural land valuing Rs 32,058,930 was declared whereas in reconciliation statement gift from father was shown at Rs 31,700,000. Similarly, another agricultural property valuing Rs 41,996,191, as discussed in above para, appeared and another gift from father at Rs 51,624,000 showed, proving her fiscal dependence on father. The claim of counsel of Nawaz Sharif that Maryam was not dependent on him is factually wrong. The documents confirm that even for acquiring the asset (agricultural land) she had to take gifts from father. In other words, money of Nawaz Sharif, received from son as gift from outside, was utilised to show assets in the name of daughter who having no resources of her own. Section 5(c) of National Accountability Bureau Ordinance, 1999 clearly says: "Assets means any property owned, controlled by or belonging to any accused, whether directly or indirectly, or held benami in the name of his spouse or relatives or associates, whether within or outside Pakistan, for which they cannot reasonably account, or for which they cannot prove payment of full and lawful consideration".
14. Wealth statements of Nawaz Sharif and Maryam Safdar show frequent receipt/exchange of gifts. In tax year 2010, Maryam Safdar had no agricultural land. She became owner of two agricultural properties in tax year 2011 and 2012 through gifts received from father. Her agricultural income is actually income of Nawaz Sharif under section 109 of the Income Tax Ordinance, 2001 as he purchased agricultural lands for dependent daughter in 2011 that she allegedly purchased back in 2012 from gift by father (in substance a sham transaction). She admittedly had no sources of her own for buying these properties. This fact she herself admitted in a TV telecast that "neither me nor my mother or siblings have any assets in Pakistan what to talk of abroad. I live with my father". (https://www.youtube.com/watch?v=GwEdzHv_SvI&feature=youtu.be&t=67).
15. Economists, tax and financial professionals, accountants, lawyers, academics and writers of the world have a consensus that tax is the foundation of good government and key to the wealth or poverty of nations. But this foundation is under threat by tax havens as proved by The Panama Papers. About our Premier's family, the following startling revelation surfaced:
"Nescol Limited and Nielson Holdings Limited were incorporated in BVI in 1993 and 1994, respectively, and were held by one bearer share each. In February 2006, Mariam Safdar signed a resolution of Nescol Limited as the "sole (bearer) shareholder." MF was appointed as the registered agent through Minerva Trust which described Mariam Safdar as the beneficial owner of both companies.
Following queries from the Financial Investigation Agency in 2012, MF invoked the Anti-Money Laundering and Terrorist Financing Code of Practice (2008) to grill Minerva for information about Nescol and Nielson. In June 2012, Minerva Trust & Corporate Services Ltd revealed that both companies "owned a UK property each" -16 and 17 Avenfield House -and were "owned by the same beneficial owner Mariam Safdar."
16. Conveying that the companies had a loan account with Deutsche Bank Geneva, Minerva said that "neither property is rented and only occupied by the owner and her family." MF passed on the details to Financial Investigation Agency of BVI. Assured by Minerva that they were aware of the client's Politically Exposed Person (PEP) status, MF ordered compliance monitoring every six months and decided not to provide nominee (proxy) directors or shareholders for Maryam's companies as disclosures made in The Panama Papers.
17. The important question is why the above mentioned properties did not find any mention in declarations of Maryam Safdar in her tax returns. Why did the family opted to use tax havens to buy properties? The answer lies in understanding what tax havens offer. Tax havens offer not only low or zero taxes, but also provide facilities for people or entities to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool. Therefore, Tax Justice Network (TJN) prefers the term "secrecy jurisdiction" instead of the more popular "tax haven".
18. Nawaz Sharif showed Maryam Safdar as dependent in declarations filed before Election Commission in 2013 but did not show her interest in offshore companies as unveiled in 'Pakistani PM's children raised £7m against UK flats owned offshore', The Guardian [April 5, 2016].
19. Hussain Nawaz has claimed in concise statement that he is owner of Mayfair flats since 2006 through direct transfer from royal family of Qatar, and that sister is only a trustee. Interestingly, this fact was not in the knowledge of Maryam Safdar in 2011 when she joined a TV telecast at her own to refute the charges of ownership of any property in London in the name of any family member! Every trust in UK is required to be registered with Her Majesty Revenue & Customs (HMRC) by filing application on a prescribed form. HMRC issues a Unique Tax Reference (UTR) number and every year, the trustee is required to file income tax return of trust. Did Maryam ever file any return in UK as trustee? If so the evidence to this effect should be produced. Our Supreme Court in a recent case, Muhammad Ali & Others v Syed Dabir Ali & Others (2016 SCMR 2164), held that a trust deed, where except beneficiary no other witness is available, has no legal sanctity.
20. The Prime Minister as per NTN certificate annexed with nomination papers was registered by FBR on 15 November 1995. In 2012, he showed total net wealth at Rs 244,995,207. Annual expenses in 2012 were shown at Rs 24,096,786. No asset was declared in the name of any dependent and no liability was shown. However, in 2011, land worth Rs 24,851,526 was declared in the name of daughter (Maryam Safdar) as other dependent! If it was benami holding, he must have shown it in his own assets for which a specific column was provided in wealth statement.
21. Non-disclosure by Prime Minister of all assets, home or abroad, of his and dependants amounts attracts section 12 of ROPA as well as section 9 of NAB Ordinance, 1999 which say that a holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices if he or any of his dependents or benamidar owns, possesses, or has acquired right or title in any assets or holds irrevocable power of attorney in respect of any assets or pecuniary resources disproportionate to his known sources of income, which he cannot reasonably account for or maintains a standard of living beyond that which is commensurate with his sources of income (see also PLD 2011 SC 1144).
22. In nomination papers [column 4(ii)], Nawaz Sharif on oath stated that "neither I nor my spouse(s) nor any of my dependants mainly owns (this expression means holding or controlling a majority interest in a business concern) any company". Both in tax year 2011 and 2012, he showed salary income from Chaudhry Sugar Mills in which he owned 2,012,538 shares worth Rs 16,000,000. He, together with his spouse, controls this entity in which loan of US $20 million was received from an offshore company established by a bank as per statement of Governor of State Bank [Chadron does not belong to PM or family: SBP chief,
Business Recorder, April 11, 2016].
23. ECP allowed Prime Minister and Chief Minister of Punjab to contest election in 2013 when it received information that they at that point of time were loan defaulters of Rs 4.9 billion. They borrowed money from nine banks in 1994-95 and did not return the same till 2013 on the plea that NAB confiscated their properties which, according to them, were worth more than the amount of the loans. The question was not that of worth of properties but whether money was due or not at the time of contesting the elections. Law does not permit any loan defaulter to contest the election unless payment is made. In column 3(ii) of nomination papers, Nawaz Sharif stated: "I hereby solemnly declare to the best of my knowledge and belief that no loan for an amount of two million rupees or more obtained from any bank, financial institution, co-operative society or corporate body in my own name or in the name of my spouse or any of my dependants, or any business concern mainly owned by me or the aforesaid, stands unpaid for more than one year from the due date, or has got such loan written off". Admittedly, the amount due was paid after election [Letter dated December 23, 2014 from President National Bank addressed to Mian Shahbaz Sharif]. This letter is a clearance certificate that total amount due under the head of all loans, mark-up, cost of fund and other charges payable by Ittefaq Foundries was paid. This fact was also stated by Chief Minister of Punjab, Shahbaz Sharif, in a Press conference held in Lahore on July 8, 2015 as "a representative of the Sharif family" (Sharifs say all loans settled by December 2014, Dawn, July 9, 2015). This confirms beyond any doubt that Nawaz Sharif and Shahbaz Sharif could not contest election in 2013 for non-payment of outstanding loan.
24. It is an admitted fact (Panama Papers and interview of Hussain Nawaz) that Maryam has been sole owner of two BVI companies and also co-owner of one BVI company. She signed loan papers to secure funds against London properties. Even her husband Mohammad Safdar (as per website of National Assembly his permanent address is Jati Umrah, Raiwind Road) did not disclose assets of wife in his nomination papers.
25. Prime Minister says he has no assets abroad, but continues to receive colossal amounts from abroad as gifts via offspring, living in the UK ('Billionaire PM' has no assets abroad: ECP, Dawn, April 22, 2016). This is what is covered in NAB Ordinance, 1999 of holding assets (within or outside Pakistan) indirectly or benami. The burden is now on Prime Minister to prove that assets abroad have no linkage with him. In Abdul Aziz Memon v The State [2003 YLR 617], the Sindh High Court held that "the principles relating to the burden of proof and benefit of doubt as applicable to an ordinary criminal trial are not applicable to the white collar crimes and the cases dealing with the corruption and corrupt practices. The ordinary crimes and white collar crimes are to be placed within two separate and distinct categories".
26. In Ghani-ur-Rehman v NAB and others [PLD 2011 SC 1144], the Supreme Court held that any public officeholder accused of corruption or corrupt practices should not be condemned unheard. It is a fact that Nawaz Sharif has not been summoned by any competent court to explain his position. He has denied links with properties in his concise statement in the Supreme Court. He and his offspring should be provided an adequate opportunity to produce evidence in support of their claims regarding ownership of the properties in London. But if they cannot substantiate their claims with reliable evidence that they had sufficient sources of their own to acquire the relevant properties then law should take its course.
PTI or anybody else should not hold Prime Minister guilty before due process of law, which is his fundamental right under Article 10A of the Constitution, which says: "For the determination of his civil rights and obligations or in any criminal charge against him a person shall be entitled to a fair trial and due process".
The above facts and questions will ultimately determine a case for disqualification or otherwise against the Prime Minister in view of principles laid down in Muhammad Siddique Baloch v Jehangir Khan Tareen (PLD 2016 Supreme Court 97), Abdul Ghafoor Lehri v. Returning Officer PB-29 Naseerabad-II (2013 SCMR 1271), Allah Dino Khan Bhayo v Election Commission of Pakistan (2013 SCMR 1655), Iqbal Ahmad Langrial v Jamshed Alam (PLD 2013 SC 179), Najeeb-ud-Din Owaisi v Amir Yar Waran (PLD 2013 SC 482), Muhammad Azhar Siddiqui v Federation of Pakistan (PLD 2012 SC 774), Ghani-ur-Rehman v NAB and others (PLD 2011 SC 1144), Muhammad Hashim Babar v The State and another (2010 SCMR 1697), Dr Imran Liaqat Hussain v Election Commission of Pakistan (PLD 2005 SC 52), Mst. Zahida Sattar and others v Federation of Pakistan and others (PLD 2002 SC 408), Farrukh Javed Ghumman v The State (PLD 2004 Lahore 155) and Ghulam Muhammad Mustafa Khar v Chief Election Commissioner of Pakistan (PLD 1969 Lahore 602).
(Concluded)
(The writers, lawyers and partners in Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences (LUMS). The views expressed in this article are not necessarily those of the newspaper)