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A.F. Ferguson may face criminal charges in Maersk sales tax mega scandal

A.F. Ferguson may face criminal charges in Maersk sales tax mega scandal

KARACHI: Country’s biggest audit firm A.F. Ferguson may face criminal charges in sales tax mega scam of Maersk shipping line as Centre for Investigative Journalism (CIJ) has appealed to the Supreme Court of Pakistan to take necessary legal action and start criminal proceedings against Maersk shipping line and audit firms including A.F. Ferguson and Co.
The investigation agencies needed to probe if the company deliberately connived with M/s Maersk Pakistan (Pvt) Ltd in its sales tax fraud or unintentionally made a mistake by not conducting proper audit of the later which was evading tens of billions of rupees sales tax of services provided to local clients.
According to information available online, A.F. Ferguson consists of 44 partners and 1700 staff members. The firm is currently headed by Syed Muhammad Shabbar Zaidi and is the oldest firm in Pakistan. A. F. Ferguson & Co is the largest firm of professional accountants in Pakistan and operating in Karachi, Lahore and Islamabad. The firm has also established an office in Kabul, Afghanistan. The firm operates under international membership of PricewaterhouseCoopers and is also known internationally as PricewaterhouseCoopers Pakistan (PwC Pakistan). Broadly, the firm offers professional services in the fields of Accounting, Audit and Assurance, Taxation, Transaction Advisory, Risk Advisory Services, SPA and HR Consultancy. Internally, the firm is organized along two separate service lines- Assurance and Business Advisory Services (ABAS), Tax and Legal Services (TLS) which are equally split into 8 ‘sections’ and each service line has its own leader (partner).
According to the application ref#164/CIJ/10/2018 sent on 27-10-18 by the CIJ appealed the apex court to take legal action, recoveries of amounts looted, recovering losses of tens of billions of rupees to the national exchequer per year while also stopping such further losses in the biggest mega scam of sales tax on services fraud from the accused persons SØREN SKOU, CLAUS V. HEMMINGSEN, SØREN TOFT, VINCENT CLERCP, MORTEN H. ENGELSTOFT, others of Maersk Line; Arslan Khan, Hazanfar Khan, Raheel Salim, Maqsood Ul Hasan Khan, Fuad Khan, Hasan Faraz, Shakeel Masih, Omer Khan, Ali Jawad Alvi, Zafar Iqbal, Ayesha Chowdhry, Zahid Hussain, Salman Ahmad, Aamir Ali, Umais Aziz Khan, Mohammed Naeem, Farheen Mahmud, Mubasshar Iqbal Affaq Syed, Syed Mohammad Abbas Jafri, Muhammad Tanveer Sharif, Salman Ateeq, Hamza Haq, Ziad Mahboob, Aamir Ibrahim, Yasir Saeed Khan, Amal Sadiq Dawood, Effat Mehmood, Maria Urooj, Zain Warsi, Mehreen Zulfiqar, Awais Saleem, Zafar Iqbal, Syed Osman Iqbal Zaidi, Anum Yaqub, Fahad Ali, , Obaid Iqbal, Zahid Hussain, Muhammad Ali Qureshi, Danish Siddiqui, Amir Arif, Arshad Ayub, Syed Mudassir Ali, Syed Hammad Hussain, Ayesha Qadri, Sheikh Samiullah, others of M/S Maersk Pakistan Private Limited; audit firms including, A.F. Ferguson And Co. and others of Maersk Pakistan Private Limited and audit firms of other shipping companies of Pakistan, relevant officials of Sindh Revenue Board involved in the mega scam directly or in connivance with the same.
As per the application, “The nexus of some Sindh Revenue Board (SRB) staff and shipping lines like Maersk Line along with its agent Maersk Pakistan Private Limited, including its owners, managers, staff as mentioned in the subject are making illegal money through malpractice and defrauding the Sindh Revenue Board of tens of billions of rupees by not paying Sales Tax on services offered at the rate of 13% (evidence documents regarding its applicability attached and also details given on SRB website). Shipping company agent Maersk Pakistan Private Limited is providing shipping and other services in Pakistan to various importers and exporters. Therefore, they are liable to pay service tax to SRB at the rate of 13% as per SRB Notification No. 3-4/20/2017. As per the attached documents the Commissioner II of the Sindh Revenue Board was bound by the Notification No. 3-4/20/2017 to collect sales tax on services from the shipping lines as mentioned in point 15 of the table which is also available on the official website of Sindh Revenue Board http://www.srb.gos.pk/contents/Notifications/SRB-3-4.20.2017.PDF”.
“The subject accused have gone so far in their criminal activities that it can be found that Maersk Pakistan Private Limited is issuing ‘benaami’ bills without sales tax numbers, without publishing its own name on the bills and giving its sales tax numbers. This is clear violation of the laws to cause losses of billions of rupees and evade the applicable provincial sales tax on the services offered,” the application said.
The application said, “The audit firms including A. F. Ferguson & Co., & other audit firms of Maersk Pakistan Private Limited are also equally partners and supporters in crime as their audit report shows that all the accounts are clear and do not highlight about this major sales tax evasion. In fact it seems that they have shown them the way how to evade the sales tax by issuing ‘benami’ bills without sales tax numbers as mentioned above”.
“When complaints are made to Sindh Revenue Board then they do not take action against the subject accused which is mandatory under provisions of law. The nexus of subject accused have made these active provisions of law entirely redundant and they should be severely punished for the same,” the application added.
The application said, “It is prayed that legal action be taken against the subject accused persons, amounts looted by them be recovered, losses suffered by national exchequer to the tune of tens of billions of rupees per year be recovered from them and further losses be stopped immediately”.