PTI leader Aleem Khan understated Rs430m offshore company as Rs2.9m

ISLAMABAD: Pakistan Tehreek-e-Insaf leader Aleem Khan has understated assets owned by his offshore company named in the Panama Papers by declaring property worth Rs430 million as only Rs2.9 million.

Khan had earlier accepted that he owns four apartments in a posh London locality.

A third-party report declares that the total worth of his offshore company is over Rs430 million.

According to UK’s famous property website http://www.zoopla.co.uk, Aleem Khan’s Hexam Investment owns Flat No 1102 Balmoral Apartments, 2 Praed Street, London W2 1JN which was bought on 27th November 2006 for Rs153 million.

The company also owns 562 Park West, Edgware Road, London W2 2RA which was bought for Rs45.3 million on 11 October 2007 and is currently valued at Rs73.1 million. Another property owned by the company is flat No142 Marble Arch Apartments, 11 Harrowby Street, London W1H 5PQ which was bought by Aleem Khan on 11 September 2007 for Rs44.1 million and the current price is Rs106.5 million.

The fourth property owned by Aleem Khan’s offshore company is Flat 305 West End Quay, London W2 1JB which was bought on 19th October 2007 for Rs61.1 million and currently valued at Rs98.8 million.

The News adds: Talking to The News, Aleem Khan admits that the worth of his four flats is way above Rs2.9 million mentioned in his FBR papers but he justifies understatement in his assets claiming that he only declared the initial capital of the company in his papers.

However, tax experts believe under the law a Pakistani resident is bound to declare all his assets around the world in his/her wealth statement. “It is obviously impossible to buy or even mortgage four flats in London with a Rs2.9 million company. The person in question would definitely have paid the upfront cost for the mortgage from his other sources or borrowed from someone else. The onus is on him to disclose the source and make it public to establish his bonafide,” said Dr Ikram-ul-Haq a renowned tax expert and a Supreme Court lawyer.

 “He should have also mentioned liabilities against the said property as admittedly these are mortgage properties and in mortgage his own equity of 25% should have reflected in his assets,” Dr Ikram said.

Aleem Khan said he declared his initial paid up capital of Rs2.9 million in his papers as he was not bound to update the current worth of the company in his papers. “Yes each flat could cost up to £500,000 and the total value of the four flats could be upto £2 million (Rs301 million) but we must keep in mind that it’s a mortgage property and I had deposited only 25% of the price with the bank as upfront payment,” he said. “Even if I have capital worth billions I won’t show all of it when buying a company as initial paid up capital,” he argued.

However even the 25% is more than Rs75 million as opposed to Aleem Khan’s declaration of Rs2.9 million.The PTI leader claimed that the money was sent through legal channels to the United Kingdom and since he is involved in property business abroad some of his customers made payments abroad. He said the actual value of his foreign assets will only be ascertained when he will try to sell it or borrow loan against it.

To another question about not declaring his ABN-Amro bank account in his asset statement in Pakistan, Aleem Khan said the same bank has merged and renamed as Faisal Bank which is duly mentioned in his assets.

Aleem said he should be appreciated for declaring his offshore company. “Out of our 1,000 parliamentarians, around 800 would have offshore properties but 90pc of them never declare the same in their asset statements,” he claimed.

However, tax experts are raising questions about the sources of his additional funding and mode of transfer of money from Pakistan. “If he obtained money from overseas Pakistanis in UK, then the question is whether he declared that money in UK?” asks Dr Ikram.

According to Panama Papers Aleem Khan’s is sole owner of an offshore company Hexam Investment Overseas Limited which has so far purchases eight properties in London. He has declared the ownership of the offshore company in his assets declaration submitted to the Federal Board of Revenue and in the nomination papers filed for contesting the by-elections from NA-122.

In his tax returns shared with The News, Aleem has described the worth of his share in this offshore company as only Rs2.93 million. He insists his wife is also a shareholder.