The Post Clearance Audit (PCA) South has revealed a massive money laundering operation involving Rs106 billion ($375 million) linked to fraudulent solar panel imports.

The investigation indicated that the scam was allegedly orchestrated by two brothers who utilized a complex network of seven shell companies based in Peshawar and Lahore. These companies, which had a declared financial worth of only Rs 119 million, managed to launder billions through over-invoiced solar panel imports.

PCA’s findings showed that the perpetrators inflated solar panel prices by up to 500%, importing panels at $0.35-0.70 per watt, while the original cost in China was just $0.15 per watt. The scheme involved depositing Rs42 billion in cash across various commercial banks to obscure the origins of the illicit funds.

In a striking example, one of the companies, which was not registered with the Securities and Exchange Commission of Pakistan (SECP), imported solar panels worth Rs 2.5 billion despite its dummy proprietor declaring an annual income of only Rs250,000, according to a First Information Report (FIR).

The investigation further revealed that the laundered funds were ultimately transferred to four Chinese companies owned by the alleged brothers, establishing a direct link between operations in Pakistan and China.

The scheme exploited the duty-free regime for solar panel imports, with banks reportedly failing to adequately scrutinize transactions from companies with dubious financial standings. The report noted that for each import consignment, money was transferred abroad twice — once through Hawala/Hundi and once through the banking channel, inflicting serious financial shocks to the country through over-invoicing.

Read more

Punjab announces deadline for Free Solar Panel scheme registration

Massive corruption scandal in solar panel import uncovered

Policymakers concerned over surge in solar panel installations, provincial distribution plans

The PCA investigation, led by DG PCA Chaudhry Zulfiqar Ali and Director PCA South Sheeraz Ahmed, utilized cross-referencing of customs, sales tax, income tax, and bank records to expose the scheme. As a result, PCA South has filed four FIRs against individuals involved in the operation.