Dar reveals remunerations of £8.2m given by UAE ruler for financial advisory

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Dar reveals remunerations of £8.2m given by UAE ruler for financial advisory
Dar reveals remunerations of £8.2m given by UAE ruler for financial advisory

ISLAMABAD: While rejecting the Joint Investigation Team’s (JIT) findings that he made assets beyond known means, Finance Minister Ishaq Dar on Monday revealed that he earned £8.2 million remunerations in return for providing financial advisory services to United Arab Emirates ruler.

Dar stated this in his response submitted to the Supreme Court of Pakistan by his lawyer while contesting JIT’s findings.

Dar’s submission, however, has raised ethical questions regarding the legality of whether a person in the capacity of a public representative can also (at the same time) be an employee of a foreign ruler or company. Dar was a member of the Senate of Pakistan at that time. Pakistan has a longstanding unresolved dispute of payments worth $800 million owed by Etisalat on account of PTCL’s privatisation proceeds.

Dar was Finance Advisor to UAE ruler Shaikh Nahayan Bin Mubarak Al Nahayar from February 2002 to March 2008 and in this capacity he was also ex-officio president and chief executive officer of BARAQ holdings – a company of Al Buraq group of the UAE.

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For the period he was serving the UAE ruler, Dar had filed his income tax returns and wealth statement returns but did not disclose the overseas earnings including salary that he received from the UAE government in these filings. In his submission before the SC, Dar invoked the income tax law of 2001 to claim immunity from disclosing offshore earnings.

Dar claimed in his response that allegations levelled by the JIT in its report were “ex-facie mala fide”. The finance minister pleaded that the findings are beyond the mandate given to the JIT by the SC, as issues of his wealth and income were not raised by the petitioners.

“An exorbitant increase in his assets has been observed since year 2008-09 for which source of funds/income and details were not furnished despite repeated requests/opportunities,” according to the JIT’s report.

It further stated that Ishaq Dar invested £5.5 million in BARAQ holdings in UAE. The source of these funds was not disclosed by him despite repeated requests. These funds subsequently became a source of his assets build up in Pakistan, according to the JIT.

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“During the period 2003-2005, a sum of GBP 8.2 million was earned as remuneration for professional advisory services and a sum of GBP 1.647 million was spent, which includes a gift of GBP 1.56 million to his son,” Dar stated in his written objections on the JIT findings.

Dar said that from 2003 to 2008 he was a non-resident Pakistani for tax purposes. “During this period, Respondent No 10 (Dar) earned remuneration for professional advisory services in the UAE as Finance Advisor to H H Shaikh Nahayan Bin Mubarak Al Nahayan. In this capacity, Respondent No 10 was the ex officio president/CEO of BARAK holdings,” according to his response.

At the end of tax year 2008, Dar’s assets in Pakistan were Rs44.827 million, which next year jumped to Rs837.15 million, according to the JIT.

Dar further submitted that his resident status in the UAE as financial advisor during this period was also mentioned in the iqama on his passport.

Dar said that he had a closing foreign asset balance of £6.553 million at the end of 2005, of which £5.5 million was accumulated credit balance with BARAQ holdings. Dar claimed that his credit balance with BARAQ has been misconstrued as an “investment” by the JIT.

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Out of £5.5 million, Dar extended £4.97 million loan to his son up till June 30, 2008.

Dar further stated that as per section 11(6) of the Income Tax Ordinance 2001, he was “not legally obligated to declare his overseas income in his tax returns in Pakistan for the period during which he was tax non-resident” (fiscal year 2003 to fiscal year 2008).

The question that arises is, if Dar was a non-resident Pakistani for tax purposes then why did he file his income tax and wealth statement returns for the period of 2003 to 2008.

Dar said that after the general elections in 2008, he formally resigned as financial advisor/president CEO of BARAQ and took oath as Federal Minister for Finance of Pakistan in Syed Yousaf Raza Gilani-led PPP government.

Dar said that after becoming a Pakistani resident for tax purposes, he declared Rs837.15 million overseas assets and merged them with Rs44.83 million local assets of that period.

While responding to allegations that he did not file his income tax returns for certain years to evade taxes, Dar said that he had filed all his returns, including income tax and wealth tax, from 1988-82 to 2001-02, in accordance with the law.

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The JIT had said that Dar did not provide his tax returns for the years 2003 to 2007-08. However, after JIT’s questioning, Dar provided the photo copies of the record available with him that cannot be treated as official evidence.

Dar also explained that during his appearance before the JIT, no question was put to him regarding any of the adverse findings relating to his income and wealth, which denied Dar the opportunity to explain his position.

He maintained in his response that each and every rupee of his income and all of his assets are duly explained and supported by documentary evidence.

The post Dar reveals remunerations of £8.2m given by UAE ruler for financial advisory appeared first on The Express Tribune.

Originally Posted on Tribune

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