NAB Uncovers Massive Rs40 Billion Scam in Khyber Pakhtunkhwa

The National Accountability Bureau (NAB) has brought to light a massive embezzlement of funds amounting to Rs40 billion within the Khyber Pakhtunkhwa government’s financial records. The investigation is ongoing.

As the substantial sum potentially involved grows with further investigation, authorities have taken action by freezing almost 50 bank accounts and confiscating documents from various government agencies and financial institutions.

Dumper Driver’s Account Holds Billions

A surprising turn in the investigation revealed that a dumper driver possessed approximately Rs4.5 billion in his bank accounts, which NAB promptly froze. This individual had established a bogus construction firm, and evidence suggests nearly Rs7 billion flowed into these accounts through questionable transactions. Preliminary findings also indicate the issuance of around 1,000 fraudulent checks from the district’s governmental accounts, with 50 account holders currently identified.

The evidence increasingly suggests the involvement of prominent political figures and high-ranking government officials at the provincial level.

Inquiry Origins and Scale

Sources indicate that the inquiry commenced following credible intelligence received by the NAB Chairman regarding significant financial irregularities in Upper Kohistan. Despite an annual development budget ranging from Rs500 million to Rs1.5 billion, approximately Rs40 billion was illicitly taken from government accounts over a five-year period (2020-2024) – an amount surpassing decades of development grants for the district.

The complexity of the fraud has reportedly surprised even veteran NAB investigators. Reportedly, Rs40 billion was pilfered from the provincial government bank account, labeled Security and Deposit Works KP 10113, under the guise of contractor securities. This account, intended for development initiatives, contractor securities, and payments, was manipulated using fabricated documents, inflated invoices, and counterfeit securities. Investigations thus far have revealed the systematically organized withdrawal of around Rs40 billion, in clear violation of KP’s financial regulations.

The intricate fraud scheme implicated the Communication and Works (C&W) Department of Upper Kohistan, which allegedly generated false security refunds, falsified records, inflated project expenses, and sanctioned bogus contractor securities, thereby ignoring regulations and exaggerating project costs.

The District Accounts Officer (DAO) of Upper Kohistan is accused of approving unauthorized payments in blatant violation of established financial rules and treasury guidelines. Private contractors, working in conjunction with government officials, purportedly submitted fraudulent invoices for non-existent projects. Additionally, certain employees of a bank in Dassu, Upper Kohistan, are suspected of illegally transferring government funds to private accounts, disregarding State Bank of Pakistan regulations and anti-money laundering statutes.

Oversight bodies, including the Accountant General’s Office and the Directorate General of Audit, failed to detect or prevent the fraud, raising questions about the effectiveness of accountability measures.

To safeguard evidence, records from the District Accounts Office, C&W Department, a bank, and related accounts have been confiscated. Besides the dumper driver’s account, other accounts holding Rs10 billion have been frozen. Approximately 30 summons have been issued to individuals for questioning. The roles of 14 bank officials and officers from DAO, C&W, the Accountant General’s Office, and the DG Audit are also under scrutiny.

The scandal not only exposes critical weaknesses within KP’s provincial financial system but also suggests possible deliberate sabotage. Evidence alludes to the involvement of corrupt officials and individuals at the highest levels of provincial leadership, who intentionally circumvented financial regulations.

The NAB KP team dedicated several days to securing relevant records in Dassu Kohistan. Due to the extensive scale of the alleged corruption, NAB authorities have escalated the preliminary inquiry into a comprehensive investigation. Further significant revelations are anticipated as the investigation progresses, potentially implicating senior provincial officials in the scam. As part of its continuing investigation in Kohistan, the National Accountability Bureau (NAB) has blocked specific bank accounts.

However, upon contact, several account holders refuted the fraud and embezzlement allegations, suggesting a potential misunderstanding on NAB’s part. They asserted their companies operate lawfully and insisted the payments received were for legitimate government contracts.

Representatives from commercial banks also clarified that all checks were processed and credited in strict adherence to banking regulations. They emphasized that banks only verify customer signatures and credentials, and they disclaimed any involvement in the alleged embezzlement. They also stated that they have not received any complaints from the government regarding these transactions. The banks have pledged full cooperation with NAB’s inquiry and confirmed that the accounts have been frozen in accordance with the law.

When contacted about the matter, KP’s Finance Advisor Muzzammil Aslam stated that the finance department had no direct involvement, as departments maintain separate accounts for contractor securities. However, he expressed astonishment at the scale of the alleged embezzlement. He stated that contractors are not required to submit securities of this magnitude, yet billions of rupees were refunded under the premise of security deposits, and relevant institutions did not raise any concerns. He added that the issue did not occur during his tenure, so he could not provide further comment, but he emphasized that a thorough investigation should be conducted.