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6597Ca81-Dad6-4D62-8 TERM : SPRING 2020 CEOs AND DIRECTORS ARRESTED AND PROSECUTED IN PAKISTAN AND INDIA COURSE: CRIMINAL LAW - I INSTRUCTOR: SIR SOHAIB SALEEM SLOT: TUES/THURS 4th (2492) SUBMITTED BY: ABDUL QAYYUM 12318 Table of Contents Executive Summary ....................................................................................................................................... 3 PAKISTAN ...................................................................................................................................................... 4 Shoaib Ahmed Shaikh ............................................................................................................................... 4 Dr. Asim Hussain ....................................................................................................................................... 5 AKD Securities ........................................................................................................................................... 6 Ahad Cheema ............................................................................................................................................ 7 INDIA ............................................................................................................................................................. 8 Background ............................................................................................................................................... 8 Byrraju Ramalinga Raju ............................................................................................................................. 9 Abdul Karim Telgi .................................................................................................................................... 10 References: ................................................................................................................................................. 11 Executive Summary In this report, I will be highlighting the charges faced by CEOs and Directors of various companies in Pakistan and India who were arrested and prosecuted for committing criminal offences under Pakistan Penal Code and Indian Penal Code respectively. The focus of the report will be on the particular offences committed, the applicable law and the punishments involved. However, a major limitation faced in Pakistan is the extremely slow legal process which often takes more than a decade to pass the final judgement on the case, and very often political forces are in play throughout the legal proceedings. Hence, I have also included the cases where these culprits were arrested but a formal legal proceeding has not taken place until today. The cases covered spans over a variety of professionals, including politicians and media giants. PAKISTAN Shoaib Ahmed Shaikh Shoaib Ahmed Shaikh is a Pakistani businessman who founded a company named Axact, which claims to be one of the world's largest IT companies and is the parent company of one of Pakistan’s biggest media groups, BOL Network. On 17th May 2015, The New York Times published an in-depth report exposing the fake degree business run by Axact, and he was quickly arrested. It is alleged that Axact charged more than 200,000 people in 197 countries for these services. Axact was founded back in 1997 by Shoaib Ahmed Shaikh in Karachi and registered with SECP in 2006. The report exposed that Axact ran at least 370 degree and accreditation mill websites. Federal Investigation Agency of Pakistan begin inquiry and the cyber crime team found plethora of evidence from Axact’s office during a raid. Further investigation revealed that Shoaib Ahmed owned several shell companies in US and other Caribbean countries, which were used for money laundering. However, due to lack of evidence, he was acquitted of money laundering charges. The criminal charges were tried in a Sessions Court in Pakistan. Additional district and sessions judge (ADSJ) Pervaizul Qadir Memon acquitted Shoaib Ahmed and 27 others in the fake degrees case on October 31, 2016. However, a twist to the story came when the judge was sacked on February 15, 2018 due to his admission of receiving Rs. 5 million bribes for acquitting the accused. Later, Islamabad High Court remanded the case back to the Sessions Court for a retrial, run by District and Sessions Judge Islamabad Chaudhry Mumtaz Hussain. The 16-page judgement authored by IHC division bench comprising Justice Athar Minallah and Justice Miangul Hassan Aurangzeb was issued. The particular crimes carried out by Shoaib Ahmed Shaikh and 22 of his employees included the following: 34. Acts done by several persons In furtherance of common intention: When a criminal act is done by several persons, in furtherance of the common intention of all, each such person is liable for that act in the same manner as if it were done by him alone. 109. Punishment of abetment if the Act abetted committed In consequence and where no express provision is made for its punishment: Whoever abets any offence shall, if the act abetted is committed in consequence of the abetment, and no express provision is made by this Code, for the punishment of such abetment, be punished with the punishment provided for the offence. 419. Punishment for cheating by personation: Whoever cheats by personation shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both. 420. Cheating and dishonestly Inducing delivery of property: Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment, of either description for a term which may extend to seven years, and shall also be liable to fine. 468. Forgery for purpose of cheating: Whoever commits forgery, intending that, the document forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shaft also be liable to fine. 471. Using as genuine a forged document: Whoever fraudulently or dishonestly uses as genuine any document which he knows or has reason to believe to be a forged document, shall be punished in the same manner as if he had forged such document. Based on the above sections of Pakistan Penal Code, Shoaib Ahmed was sentenced to 20 yeas for the scam along with 22 employees, and a fine of Rs. 1.3 million was imposed on all employees in September 2018. Further break-down of the punishment is as follows: • 3 years rigorous imprisonment (RI) along with a fine of Rs100,000 under Sections 419/109/34 • 3years RI along with a fine of Rs200,000 under Sections 420/109/34 • 7 years RI along with a fine of Rs500,000 under Sections 468/109/34 • 7 years RI along with a fine of Rs500,000 under Sections 471/109/34 However, since all the sentences will run concurrently, the maximum time each convict would have to spend in jail is 7 years. Dr. Asim Hussain Dr. Asim Hussain is the Chairman of Ziauddin Group of Hospitals and former advisor of Prime Minister for Ministry of Oil and Natural Resources. He also serves as the Chairman of Higher Commission of Sindh and Chairman of Petroleum Institute of Pakistan. He has also been conferred with several awards including Sitara-i-Imtiaz and Hilal-i-Imtiaz. On 26th August 2015, he was taken into custody by the paramilitary forces and detained under a 90-day preventive detention for questioning related to his involvement in terror financing and advancing funds for supporting criminal activities. Later, the case was taken forward by National Accountability Bureau (NAB) for alleged corruption of more than Rs. 460 billion through a variety of corrupt actions including fraudulent allotment of land, money laundering, land encroachment, receiving illegal commission for curtailment of gas supply leading to unjustified exploitative increase in gas prices, and fraud with public in the name of charity hospital. Dr. Asim has also been accused of allegedly misusing his authority and fraudulently awarding contracts of 5 gas fields in Sindh to a privately managed gas processing company, the Jamshoro Joint Venture Limited (JJVL), that had caused a loss of Rs. 17.338 billion to the exchequer. As of now, legal proceedings are continuing, and no final judgement has been released. Several court sessions have taken place, and there is a significant political string attached to this case as Dr. Asim is a close aide of former President and PPP Co-Chairman, Asif Ali Sardar. AKD Securities AKD Securities Ltd. is one of the leading securities firms in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. In 2016, Federal Investigation Agency arrested the firm’s CEO, Fareed Alam and 2 directors, Tariq Ghumra and Mohammed Iqbal over charges of fraud leading to a loss of Rs. 290 million to Employees Old-Age Benefit Institution (EOBI). It was alleged that AKD Securities issued a favorable research report of a textile company, Amtex recommending the purchase of company’s stock. Based on this report, EOBI bought Rs. 330 million worth of shares and the share price dropped from Rs. 29 to Rs. 2 within 3 months. The case was registered under the following section of Pakistan Penal Code: 34. Acts done by
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