The National Accountability Bureau (NAB) has unearthed a staggering Rs40 billion scam involving misappropriation of funds within the Khyber Pakhtunkhwa government’s accounts, The News reported on Wednesday.
As the astonishing amount continues to escalate with ongoing investigations, authorities have frozen nearly 50 bank accounts and seized records from various government departments and financial institutions.
During the probe, a shocking revelation emerged with the discovery of approximately Rs4.5 billion held in the bank accounts of a dumper driver, which NAB promptly froze.
The driver had established a fictitious construction company. Evidence revealed that a total of nearly Rs7 billion had been deposited into his accounts through suspicious transactions. Initial investigations also uncovered the issuance of nearly 1,000 fraudulent cheques from the district’s government accounts, with 50 account holders identified thus far.
Mounting evidence increasingly suggests the involvement of influential political figures and senior government officials at the provincial level.
Sources indicated that the inquiry commenced after the NAB Chairman received credible intelligence regarding extensive financial irregularities in Upper Kohistan. Despite an annual developmental budget ranging from only Rs500 million to Rs1.5 billion, nearly Rs40 billion were illicitly diverted from government accounts over a five-year period (2020 to 2024)—a figure significantly exceeding decades of the district’s developmental grants.
The sophisticated nature of the fraud has astounded even seasoned NAB investigators. Details reveal that Rs40 billion were embezzled from the provincial government bank account titled Security and Deposit Works KP 10113 under the guise of contractor securities. This account, intended for development projects, contractor securities, and payments, was manipulated through forged documents, inflated bills, and fake securities. To date, the inquiry has found that approximately Rs40 billion were withdrawn in an organized manner, in blatant violation of KP’s financial regulations.
The highly intricate and multi-layered fraud involved the Communication and Works (C&W) Department of Upper Kohistan, which prepared fake security refunds, fabricated records, inflated project costs, and approved fictitious contractor securities, disregarding all regulations, exaggerating project costs, and issuing counterfeit securities.
The District Accounts Officer (DAO) of Upper Kohistan approved unauthorized payments in blatant disregard of the General Financial Rules (GFR) and Treasury Rules. Private contractors, in collusion with government officials, submitted fraudulent bills for non-existent projects, while certain employees of a bank in Dassu, Upper Kohistan, unlawfully transferred government funds to private accounts, flouting State Bank of Pakistan regulations and anti-money laundering laws.
Oversight agencies, including the Accountant General’s Office and the Directorate General of Audit, failed to detect or prevent the fraud, raising serious concerns regarding accountability mechanisms.
To secure evidence, records from the District Accounts Office, C&W Department, a bank, and related accounts have been seized. Alongside the dumper driver’s account, additional accounts totaling Rs10 billion have been frozen. Approximately 30 notices have been issued to summon individuals for questioning. Investigations are also underway to probe the roles of 14 bank officials and officers from DAO, C&W, the Accountant General’s Office, and the DG Audit.
The scandal not only exposes severe deficiencies in KP’s provincial financial system but also hints at deliberate sabotage. Evidence suggests the involvement of rogue officials and elements at the highest echelons of provincial leadership, who intentionally allowed financial regulations to be circumvented.
The NAB KP team spent several days in Dassu Kohistan, securing all pertinent records. Given the immense scale of corruption, NAB authorities have elevated the preliminary inquiry to a full-fledged investigation. As the investigation progresses, further explosive revelations are anticipated, with senior provincial officials likely to be implicated in the scam. As part of its ongoing investigation in Kohistan, the National Accountability Bureau (NAB) has also frozen certain bank accounts.
However, upon contact, some of the account holders refuted the allegations of fraud and embezzlement, stating that NAB might be operating under a misunderstanding. They claimed to be running their companies lawfully and insisted that the payments were received against legitimate government contracts.
Officials from commercial banks also clarified that all the cheques were processed and credited strictly in accordance with banking rules and regulations. The banks merely verify customer signatures and credentials, and if any embezzlement has occurred, the banks had no involvement whatsoever.
They emphasized not having received any complaints from the government regarding these transactions. The banks assured full cooperation with NAB’s inquiry and confirmed that the accounts had been frozen in accordance with the law.
When KP’s Finance Adviser Muzzammil Aslam was contacted regarding the issue, he clarified that the finance department had no direct involvement, as various departments maintain their separate accounts for contractor securities. However, he expressed shock over the embezzlement of such a substantial sum.
According to him, contractors are not required to submit securities of this magnitude, yet billions of rupees were refunded under the pretense of security deposits, and the relevant institutions remained silent. He added that the issue did not arise during his tenure, so he could not comment further but emphasized the need for a thorough investigation.
