Rs16 Billion Loss in Cotton Exchange Scandal

The Federal Investigation Agency (FIA) has assessed that the prolonged illegal occupation and commercial exploitation of the Karachi Cotton Exchange building has resulted in an estimated financial loss of approximately Rs16 billion to the national exchequer. In furtherance of recovery proceedings, notices have been issued to both current and former directors associated with the Exchange.

According to a notice issued by the FIA’s Anti-Corruption Circle in Karachi, individuals linked with the Evacuee Trust Property Board (ETPB), Karachi Metropolitan Corporation (KMC), and Karachi Cotton Association (KCA) have been named in connection with alleged irregularities concerning the federally owned property located in Serai Quarters.

Preliminary findings indicate the use of forged ownership and tenancy documentation, alongside unauthorized tenancy transfers conducted through informal “Pagri” arrangements. The FIA is also examining financial benefits derived from such transactions.

In a parallel investigation under the Anti-Money Laundering Act 2010, the agency has requisitioned comprehensive banking records from all commercial banks, including account details, transaction histories, and regulatory reports such as Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs). Notably, no responses have been submitted by the accused parties within the stipulated deadline. Individuals named in the investigation include Khawaja M. Zubair, Amin Hashwani, and Faisal Nasim.

The investigation aims to establish liability for the alleged незаконное occupation and to identify potential money laundering channels linked to the property.

The premises have remained sealed by the FIA and the Evacuee Trust Property Board for over 110 days, thereby halting operations of the Karachi Cotton Association, including the issuance of spot cotton rates. This has significantly disrupted the cotton market, impacting daily trade volumes and affecting approximately 5,000 workers and 320 registered brokers.

Affected stakeholders have approached key industry bodies, including the All Pakistan Textile Mills Association (APTMA), Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the Karachi Chamber of Commerce and Industry, Pakistan Cotton Ginners Association, and the Pakistan Cotton Brokers Association, seeking intervention.

Despite pending adjudication before the Sindh High Court, enforcement actions—including issuance of notices, document requisitions, and imposition of penalties—continue, prolonging the operational and commercial disruption.