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Pakistan family hands over £190m in ‘dirty money’ probe

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Via Financial Times

The National Crime Agency has secured the largest settlement of its kind under new powers granted two years ago to help it fight “dirty money” after the family of one of Pakistan’s wealthiest businessmen agreed to hand over £190m held in the UK.

Malik Riaz Hussain, a property developer who is one of the biggest private sector employers in Pakistan, and his family agreed to the payout to end an investigation in relation to the funds.

The NCA did not disclose the allegations that had led to the freezing orders on the assets but said its agreement with the family was a civil, rather than a criminal matter, and “does not represent a finding of guilt”.

The assets, which the NCA said would be repatriated to the government of Pakistan, include a central London property at 1 Hyde Park Place valued at £50m as well as £140m in nine frozen UK bank accounts.

Mr Hussain could not be reached for comment. But on Twitter he indicated the funds would be used in settlement of a case in front of Pakistan’s supreme court.

The owner of the property, which the NCA said is worth approximately £50m, is Ultimate Holdings MGT Ltd, a company registered in the British Virgin Islands. According to Land Registry records, the same property was purchased for £42.5m in 2016 from Hasan Nawaz Sharif, the son of ex-Pakistani prime minister Nawaz Sharif.

The latter was removed from office by Pakistan’s supreme court in 2017 after a scandal over his family’s unexplained wealth. The following year he was sentenced to seven years in prison by an anti-corruption court.

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Campaigners said the NCA’s settlement underlined the need for a public register revealing the real owners of overseas companies buying UK property. Luxury property in London has long been viewed as conduit for questionable money because ownership is easy to disguise.

But despite having cross-party support, Britain has yet to legislate to create a public register of the ultimate owners of overseas companies buying property in Britain.

Ava Lee, senior campaigner at Global Witness said: “1 Hyde Park Place is yet another example of a high end London property harbouring unexplained cash. We know how to put an end to this — there’s a bill to clean up the property market waiting and ready to go.”

Asset freezing orders were introduced alongside Unexplained Wealth Orders in the Criminal Finances Act 2017. Both are tools that enable the NCA to investigate the source of funds and attempt to confiscate them in appropriate circumstances.

The new tools were introduced after the government identified a serious enforcement issue, which meant that authorities were able to identify questionable bank accounts and assets but were unable to interfere with the accounts.

They have also represented a pragmatic way forward for the NCA.

“We are likely to see more of these orders and if the NCA can publicise some large ones they are showing they really have teeth,” said Muluk Chawla QC, a partner at Bryan Cave Leighton Paisner.

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