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(May 01 2010): The Pakistan Economy Watch (PEW) has urged the federal government to ban suspicious offshore companies buying shares of any important production unit. “The concept of offshore companies, which are clueless entities and wherein the character of the sponsors are concealed behind the veil of a corporate entity, has become the brand name for money laundering and tax evasions”, said Dr Murtaza Mughal, President PEW here on Friday.

A company that is incorporated outside the jurisdiction of its primary operations base can permit unacceptable and undesirable individuals and entities to gain substantial control of some core institutions that cannot be allowed, he said, adding that such companies are formed for exercising indirect control and indulge in manipulation marring the national interest.

“It is very hard to scrutinise and ascertain the real characters behind an offshore corporate entity,” Mughal said. He said that the banking business forms the nucleus of all commercial activities, therefore, it is important to ascertain the identity and character behind the offshore entity before letting it grab substantial interest in any financial institution. This was one of the main reasons for setting aside sale of steel mills that saved Pakistan’s industry, he said.

Source: Business Recorder