How Pakistani Generals manufactured ‘Mr Clean’ using disgraced billionaire’s funds

TThe door was opened by an English butler named Terry, dressed in perfectly wrinkled pinstripe trousers and a dark suit—a gesture of exquisite professional disdain for the blistering Arabian sun. The servant’s costume didn’t change to fit the set: Emirates Hill mansion in Dubai, set around an expansive courtyard with a fountain in the center; the opulent apartment in London’s luxurious South Kensington; the five-bedroom, 154 foot yacht Raastathe art-deco interiors carved from teak.

Nestled in a lounge dotted with art from the Middle East and South Asia, Imran Khan’s new wife gloomily awaited the all-women’s gathering that lay ahead. “I moaned at the prospect of spending my afternoon with more silicone dolls,” recalls Reham Khan.

“Honey, they are very important,” the future Prime Minister of Pakistan objected. “Arif Naqvi self-funded 66% of my campaign in 2013.”

Naqvi is fighting his extradition to the United States, where he faces a prison term of 291 years for financial fraud. Naqvi is now at the center of a storm over his role in financing the rise of Imran Khan’s Pakistan Tehreek-e-Insaaf (PTI). Explosive allegations have surfaced that Naqvi made the payments on behalf of the former Director General of Inter-Services Intelligence (ISI), Lieutenant General Ahmad Shuja Pasha.

Legal filings by US prosecutors allege that Naqvi falsified documentation to cover up losses, and embezzled at least $400 million from investors such as the Bill and Melinda Gates Foundation to fund health care for the poor in developing countries.

Some of that money, new evidence shows, was used in an army-led plot to overthrow Pakistan’s political order.


Also read: Big financial scandal awaits Imran Khan? Follow Pakistani businessman Arif Naqvi .’s money


The Generals and Imran

The story goes back to the summer of 2008, when Prime Minister Yousaf Raza Gillani’s government proceeded to impose civilian control over the ISI. The move, aimed at deepening detente with India and urging the ISI to act against anti-American jihadists, failed. Former CIA officer Bruce Riedel has said the ISI undermined the civilian peace bid by staging 26/11. After the invasion of the United States, which led to the assassination of al-Qaeda chief Osama bin Laden, civil-military relations deteriorated further.

The generals needed a reliable political partner. With a platform for seeking talks with Taliban jihadists, greater Islamization and an aggressive position in Kashmir, Imran had the right ideological credentials.

Faced with growing questions, Imran publicly denied reports of ISI funding in 2012. However, the evidence piled up. The military, Frédéric Grare has noted, launched a bloodless coup in December 2012 to help him by facilitating massive anti-government protests.

Imran’s 2013 election bid failed, but Prime Minister Nawaz Sharif’s new government also found itself in conflict with the military. New protests led by Imran crippled the government again in 2014. New ISI chief Lieutenant General Zaheer-ul-Islam, Nawaz Sharif claimed, threatened a coup unless the prime minister resigned to make way for Imran.

Lieutenant General Rizwan Akhtar was appointed ISI chief in 2014 in an effort to calm tensions between the government and the military. But through generals they took care of their unfinished business.


Also Read:Shehbaz Sharif’s biggest challenge will be to undo Imran Khan’s bombastic politics in Pakistan


The Empire Behind Imran

Earlier this year, Naqvi filed an affidavit with Pakistan’s Election Commission, admitting he raised $2.1 million for Imran in 2013 — just as the generals were planning for his turnout. Election laws in Pakistan prohibit foreign donations to political parties, but Naqvi claimed he collected the money from Pakistani citizens. Wootton Cricket, the Cayman Islands-registered company through which the money was paid, merely served “as a convenient and traceable aggregator of funds.”

Last week, however, journalist and author Simon Clark revealed that bank records showed that $1.3 million paid to Imran’s party in March 2013 came from Naqvi’s Abraaj Investment Management. Abraaj later charged the donation to the holding company that controlled the energy company Karachi Electric.

Another $2 million, documents show, came to Wootton from United Arab Emirates (UAE) Minister Sheikh Nahyan bin Mubarak al-Nahyan.

Imran Khan has admitted to receiving money from Naqvi, but says it was just political donations. There is no explanation as to why the businessman and the sheikh made these investments in his political fortune.

Last year, an investigation by Margot Gibbs and Malia Pulitzer revealed that several key members of Imran’s inner circle — including ministers Shaukat Tareen, Chaudhry Moonis Elahi and Makhdum Khusro Bakhtyar — held millions of dollars in offshore trusts and companies. Tariq Shafi, a leading PTI donor, was found to have $215 million in offshore accounts.

For his part, General Pasha was appointed adviser to the UAE after his retirement in 2012. From 2016, he started working as a consultant for WAK Group. The company, owned by politician-tycoon Waqar Ahmad Khan, is said to have benefited from gas quotas awarded without open bids. WAK was also ruled by British courts for defaulting on loans to develop a 1.5-acre estate in London into a 21-bedroom mansion with a cellar, swimming pool, cinema, sauna and an orangery.


Also read: Why Imran Khan blamed the US for his downfall and not the Pakistan army


The Electric Man

Educated at Karachi Grammar School and the London School of Economics, Naqvi had used his education to escape a toxic environment where success depended on connections and corruption. In 1982, he married Fayeeza Chunrigar, a descendant of Ibrahim Ismail Chunrigar, the magnate who was Pakistan’s prime minister for 55 days in 1957. After a successful career at several major banks, he moved to the UAE and founded Abraaj. At its peak, Abraaj had $13.6 billion in assets in six continents.

The Naqvis counted Hilary and Bill Clinton, Barack Obama and Bill Gates among their friends. They donated to top universities and prestigious charities. After that, he put a big bet on building a swamp called Karachi Electric.

Since the 1950s, Karachi’s power grid had been slowly falling apart. While consumers disdained to pay their bills, governments invested too little in infrastructure. In 2005, the government offered Karachi Electric to Abraaj for a token amount of $1. Finally, a Saudi-Kuwait consortium acquired 71 percent of Karachi Electric’s shares.

The consortium soon found out that it had made a mistake. In 2008, Naqvi was again asked to take over after a power outage across Karachi caused by industrial action. This time he agreed. Friends in Washington helped push through a $7.5 billion aid package that would have helped reform Pakistan’s energy sector.

Farrukh Abbas, related to then-President Zardari through his wife, was hired to lead Abraaj in Pakistan. However, the president’s privatization of Karachi Electric was met with opposition from his own party. In 2011, Abraaj’s decision to lay off 4,300 workers sparked violence, allegedly instigated by powerful politicians from the ruling party.

Probably the unfortunate experience with Zardari had something to do with Naqvi’s support for Imran.

Faced with a mountain of unpaid bills from government customers – and a growing pile of debt to its own energy suppliers – Karachi Electric struggled. The solution came from President Xi Jinping. Shanghai Electric, one of China’s largest energy companies, intervened with a $1.7 billion bid to buy Karachi Electric from Naqvi.

In the summer of 2016, Simon Clark and Will Louch wrote an authoritative book about Abraaj’s story. Naqvi signed a $20 million contract with an intermediary to get Prime Minister Nawaz Sharif’s backing. However, the prime minister was forced to resign from office by a 2017 Supreme Court decision found guilty of corruption.


Also read: 41 Indians became Pakistanis last year. Why are they doing it? What are the obstacles?


The end of the dream

Imran Khan finally came to power in 2018, installed in office, scholar C. Christine Fair has captured, facilitated by the military. Facing financial pressures from failed investments, Naqvi needed the sale of Karachi Electric to proceed. Federal Investigation Agency (FIA) Director General Bashir Memon stood in the way. Abraaj owed Pakistani state gas company Rs 87 billion. In response to the payment requests, Memon later said, Karachi Electric would threaten to cut power to the city — and secure payment deferrals.

Imran ordered Memon to close the case. The FIA ​​chief refused, leading to his unceremoniously transferring. Talks to sell Karachi Electric remain stalled, including over the amount of the Pakistani government’s debt, the size of its debt and future electricity prices.

To help Naqvi, Imran also threw his weight behind plans to establish a sovereign wealth trust, Sarmaya-e-Pakistan, which would control the country’s public sector properties. Abraaj hoped for a large share in the trust’s activities, in which former employees would play a key role.

Forensic investigation of Abraaj’s cases has aborted Imran’s attempts to rescue Naqvi. Naqvi was detained at Heathrow Airport in early 2019. Like the fugitive diamond trader Nirav Modi, Naqvi is fighting extradition on mental health grounds. The two cases are likely to be decided together.

Although Prime Minister Shehbaz Sharif and the ruling alliance of Pakistan’s Muslim League-Nawaz and People’s Party have used the Naqvi revelations to attack Imran, no criminal investigation has been ordered. Pakistan’s Election Commission has ruled that Imran Khan has received banned funds, but its investigation does not address the sources and their motives. The grip of cronyism on Pakistani politics is too deep – and the generals involved are too powerful – to tell the full truth.

The author is National Security Editor, ThePrint. He tweets @praveenswami. Views are personal.

(Edited by Prashant)

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