Le Paris: Pulling a fast one on FBR?
Either Master Tiles is hoodwinking FBR or colluding with FBR.
Background
My post Master Tiles engaging in a mega scam with Le Paris housing scheme was followed a few days later by The great Pakistani real estate racket in The Profit. This back-to-back negative coverage resulted in SECP issuing a notice to the public that they should be wary of the Le Paris scam.
I had also commented that such notices aren’t worth the paper they are printed on as they are not backed by an enforcement mechanism.
Earlier Gujranwala Development Authority (GDA) had also printed a “Buyer bewaer” notice and affixed it somewhere (I don’t know where) that all activities relating to the Le Paris housing scheme are illegal and constitute fraud.
Such notices, as they aren’t backed by any penalties or arrests, have never discouraged scammers from continuing on with their scheme. The same was the case here.
Due to the lockdown imposed by the government, Master Tiles ran a TVC that ballotting that was supposed to be held on March 31, has been delayed due to COVID-19 lockdown. Master Tiles, however, promised to hold the balloting ceremony within seven days of lifting the lockdown. In the meantime, the lottery amount has been increased to make the investors who bought the investment certificates feel better.
Master Tiles is least bothered with the notices published by GDA and SECP or the negative coverage in The Profit.
Construction Amnesty
On March 30, FBR published the list of entities that have availed amnesty under the money laundering scheme.
Le Paris is mentioned at serial number 748 as a scheme that is availing the amnesty.
This is interesting.
Relevant extracts from the money laundering amnesty
The ordinance factory (i.e. President Arif Alvi) approved and promulgated the Income Tax Amendment Ordinance in April 2020 which amended the Income Tax Ordinance 2001 (ITO) by allowing construction projects to launder money if they meet certain conditions.
Inapplicability of Section 111: This is the key clause of the money laundering scheme. Section 111 of ITO inquires about the source of capital of the investor. If the builder registers the project under the amnesty scheme, FBR will not inquire about where did the builder come up with the cash to purchase the land. However, to qualify for this, the builder has to deposit the cash in the bank account by December 31, 2020, and have ownership title of the land.
On January 21, 2021, the ordinance factory aka President Arif Alvi promulgated another ordinance that amended the aforementioned ordinance to extend the last date of registration till June 30, 2021, from December 31, 2020.
Under the Eleventh Schedule of ITO, the developer is required to provide the FBR the following certification from the relevant approving authority for the registered project.
FBR has also prepared an FAQ pamphlet and reproduced the above in it.
In the step-by-step guide that FBR has prepared for registering the project, the developers are required to provide detailed information about the location and approval of the projects as seen below from some of the screenshots.
The purpose of quoting the aforementioned extracts and screenshots is to impress upon the reader that one cannot register the project with FBR under the money laundering scheme willy nilly. FBR requires significant information with respect to details of the land such as location, size, transfer deeds of the land, bank account and money invested in the project, approval documents of the project, and certificates from approving authority with respect to the project.
Information with respect to Le Paris Gujranwala
Now if Le Paris has been registered by FBR, all these details should be available with the authorities. Let’s see what do they say. As per The Profit report
officials of both the Board of Revenue and the GDA continue to slam the La Ville De Paris project, saying another fraud was going to happen, and that the clock was ticking to possibly contain some of the damage. “The biggest red flag is that the purchase of land for this project has not been completed yet and the project has been announced. Secondly, the purchase of land and its transfer is not an easy task, and there is not a single 4,800 acre area in Gujranwala where there are no court cases. When a housing society is announced, it must first be approved. For example, any Housing Society in Gujranwala has to get approval from the Gujranwala Development Authority (GDA) and La Ville De Paris does not have any approval,” says a revenue board official.
To these accusations, La Ville De Paris have claimed that they are in the process of approval, and are waiting to acquire all the land before applying for final approval. This still does not explain how they have launched without the approval, or are accepting money for the certificates. The chairman of the GDA, Ali Ashraf Mughal, responded to these claims by vehemently denying any approval being “in the process” and said that they had not even been approached by La Ville De Paris yet. “We have not received any documents from La Ville De Paris and we have removed all their advertisements from Gujranwala city. We have also written letters to the concerned authorities to remove their advertisements from Lahore as well.”
Le Paris itself is stating that they haven’t completed the acquisition of the land.
Sujag visited the real estate agents and people who own the property where the society is supposed to be built and there is no sign of any development rather the location appears to be a garbage dump. The owner of the said land says that no one has approached him for acquiring the land.
لی پیرس سکیم میں ایک بڑا مسئلہ یہ بھی ہے کہ کسی کو ابھی تک یہ معلوم نہیں کہ یہ سکیم بنائی کہاں جائے گی۔ اس کی ویب سائٹ پر موجود اس کے مجاز پراپرٹی ڈیلرز کی فہرست میں شامل ایک ڈیلر بتاتے ہیں کہ یہ سکیم لاہور گوجرانوالہ جی ٹی روڈ پر کامونکی ٹول پلازہ کے مغرب میں بنائی جائے گی۔ مگر ان کے بتائے گئے علاقے میں کوڑے کے ڈھیر پڑے ہیں اور کسی ہاؤسنگ سکیم کا دور دور تک کوئی نام و نشان دکھائی نہیں دیتا۔
گوجرانوالہ میں مقیم ایک شہری جو اکثر پراپرٹی میں پیسہ لگاتے رہتے ہیں کہتے ہیں کہ اس زمین کے مالکان سے ابھی تک لی پیرس کے مالکان نے رابطہ ہی نہیں کیا۔ وہ کہتے ہیں کہ "اس زمین کے مالکان کو معلوم تک نہیں کہ یہاں کوئی رہائشی سکیم بننے جا رہی ہے"۔
لی پیرس کے مارکیٹنگ کے شعبے نے سجاگ کو بتایا کہ اس سکیم کا اصل مقام جان بوجھ کر خفیہ رکھا جا رہا ہے۔ اس شعبے میں کام کرنے والے ایک شخص کا کہنا ہے کہ جگہ کا اعلان اس لئے نہیں کیا جا رہا کیونکہ ایسا کرنے سے زمین کے مالکان کو زمین کی منہ مانگی قیمت کا مطالبہ کرنے کا موقع مل جائے گا۔
Conclusion
There you have it. To register the project under the money laundering amnesty, FBR requires detailed information such as the location of the project, title deed of the project, approval of the project, certificate from the approving authority, etc. Le Paris has none, absolutely none, of these things available because in the words its own employee, land just hasn’t been acquired yet much less approvals for it from the relevant authorities.
This can mean only two things i.e either Master Tiles is hoodwinking FBR or colluding with FBR.
Hoodwinking: Le Paris has submitted forged/fraudulent documents to FBR (not inconceivable as the entire project is laden with illegal and fraudulent activities).
Colluding: FBR is walking in the footsteps of the SBP Governor by coming up with manipulated numbers to please the Prime Minister.