Fraud Case

Khanani and Kalia was one of the largest currency exchange companies in the country, founded in 1983 by Hanif Kalia. Khanani and Kalia claims to be Pakistan’s first ISO 9001 and 27001 certified Exchange company. The directors of the company were accused of violating the Foreign Exchange Regulations Act, the Prevention of Electronic Crimes Ordinance and the Pakistan Penal Code by operating a money transfer system based on personal contacts, known as Hawala. Munaf Kalia and Javed Khanani, directors of Khanani and Kalia International (KKI), were arrested by FIA on the charges of money laundering worth 10 billion. Nine officials of the National Database and Registration Authority were also arrested from various offices in Karachi based on charges of making fake identity cards.
The main charge against them is that they were involved in ‘physical’ transfer of foreign currency from Pakistan and ran the illegal ‘Hawala or Hundi businesses. Lahore, Gujranwala, Karachi and Peshawar were the main cities where the Hundi and Hawla business were being run, any one could easily transfer large amounts of money from Pakistan to rest of the world without any paper work or legal requirements. The State Bank of Pakistan suspended the license of Khanani & Kalia International for 30 days for violation of its rules and regulations. The state bank of Pakistan also prohibited the exchange company to perform any business activity and forced to shut down all its franchises during the suspension period. Closure of franchises and headquarters caused great trouble for people whose payments were in process. Munaf Kalia said he was not involved in any kind of illegal money transfers or money laundering and would prove wrong all allegations leveled against him. Munaf Kalia said that his company was not involved in Hundi or Hawala business, but faisal owner of Dunya Money exchangers who has taken the franchise of the Khanani & Kalia Company, was ivnvoled. Malik Boston, representative of the Forex Association of Pakistan, said the association would turn in anyone found involved in illegal transfers. “The FAP collects $7 billion foreign exchange annually and gives it to the government. If we are targeted and harassed, this money will not be received,” he said. The sources said investigators had found many polticians also being involved in money laundering.The prosecution in the case against Khanani and Kalia, however, was not able to provide any evidence that showed that the company, its directors or the four bankers were in any way involved in such activity.