Baskin Robbins Pakistan faces multibillion fine and money laundering investigation

ISLAMABAD: In a shocking development, the Punjab Revenue Authority has imposed a fine exceeding three billion rupees on Baskin Robbins, operating in Pakistan, amid serious allegations of tax evasion and other illicit activities. This move has triggered an extensive investigation by the Federal Investigation Agency (FIA) Lahore’s Anti-Money Laundering Unit into complaints involving over 10 million dollars in money laundering and hawala/hundi operations.

Sources within FIA Lahore have confirmed the receipt of complaint number 222/2023. Preliminary investigations have led to the issuance of notices to the company’s designated officials. In a coordinated effort, letters have also been dispatched to governmental bodies, including FBR Pakistan and Customs Pakistan, for a thorough collection of details from all banks and related institutions. According to FIA’s Assistant Director Shiraz Umar, the investigation is actively progressing; however, an incomplete response from Customs Pakistan has delayed the formal registration of an FIR.

Attempts to contact FIA Lahore Director Sarfraz Warak for comments have been unsuccessful, adding to the intrigue surrounding the case.

The origins of this investigation trace back to a comprehensive submission by local citizen Abdul Qayyum Hafeez, who provided FIA Lahore with hundreds of pages of documents and a detailed formal complaint. Hafeez’s allegations paint a troubling picture of the company’s operations in Pakistan since its registration in 2017, accusing it of not only tax evasion but also extensive money laundering. The complaint highlighted an international dimension, with investigations requested through the Pakistani Embassy in the USA, involving the Ministry of Interior and law enforcement agencies.

Central to these allegations is the claim that over 10 million dollars were illicitly transferred to the USA via Dubai, supported by substantial documentation. The complaint implicates AHG Flavors Private Limited, the entity under which Baskin Robbins operates in Pakistan, in utilizing the ice cream brand as a conduit for money laundering and hawala/hundi. Furthermore, it points to Interlink Trading, a Dubai-registered company, as a key player in under-invoicing and tax evasion schemes, resulting in a massive financial blow to Pakistan’s national treasury.

When approached for their side of the story, company Chairman Irfan Mustafa and head Jabran Mustafa vehemently denied the allegations, attributing them to a disgruntled former employee. They refrained from commenting on the ongoing inquiries by the Punjab Revenue Authority and FIA Lahore, indicating that their legal team would address these issues.

In contrast, complainant Qayyum Hafeez remains steadfast, asserting that he has provided irrefutable evidence. He expressed frustration over FIA Lahore’s reluctance to register an FIR, despite the substantial financial loss to the national treasury. Hafeez has also petitioned law enforcement agencies and the Ministry of Interior, criticizing FIA Lahore’s Director Sarfraz Warak for not taking decisive action.