Fraud Freight Forwarding company looting the exporters of Pakistan – be Alert

Pakistani economy has been under threats and potential challenges, particularly from corruption by governmental and non governmental institutions, organizations and individuals. Recently, we have seen a new phase of corruption scandals about the shipping and logistic industry of Pakistan. Afghan Transit Trade has been under the criticism, since Dunya News Channel has broken the news of massive fraud and Tax evasion

In November 2009, A Pakistani Food Company, The Vision Foods, has signed a contract for the export of Pakistani Rice to West African Islamic country, The Republic of Niger. The contract was worth multimillion dollar foreign exchange earnings for Pakistan. The newly born Food Company's employees and management was feeling life-time joys for winning the contract and with high esteems of future prospects, started to execute the contract.

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The Vision Food has decided to outsource the services of procurement and shipping (Ocean Shipping from Karachi to Niger through the nearby seaport of Cotonou). As rice supplier, The prominent rice export M/S Ghaffar Corporation has been selected to procure, process and export the first lot of Rice shipment as per the contract while M/S Ocean Tiger Container Line (OTCL), located ( Suite # 202, 2nd Floor, Anum Estate, Darul Aman Society, Baloch Colony,  Sharah -e –Faisal) in Karachi, a sole-proprietorship, self assumed container line with no paid up capital and financial security, conducting the business of freight forwarding worth billions of rupees of Pakistani exporters was contracted to carry the shipping and freight forwarding services for the first shipment of rice.

The Vision Foods and OTCL has reached an understanding to offer the shipping service and The Vision Foods has harmonized it's both vendors (Ghaffar Corporation and Ocean Tiger Container Line). In a meeting at Ocean Tiger Container Line (hereafter called "OTCL") office located at Shahrah-E-Faisal, Karachi, and both parties settled the shipment of 21 containers of Rice export from Pakistan by Ghaffar Corporation to Republic of Niger. The Payment of freight is settled on 100% advance freight payment to OTCL. 

From this point the complete operation was outsourced to Ghaffar Corporation and OTCL, the freight forwarding company to carry out the export and shipping of the rice shipments while The Vision Foods, assumed the position of monitor and regulator of the multimillion dollar contract.

            Ghaffar Corporation has paid the full amount of Ocean Freight Carriage charges to Ocean Tiger Container Line in advance against the Invoice for Freight Payment. The payment of 'advance freight' in amount of TWO MILLION, EIGHT HUNDRED, FOURTY SIX THOUSAND, THREE HUNDRED AND FIFTY RUPPES made on Friday, December, 18, 2009 against the OCTL invoice # 145 through Cheque number 3445775, Dated 17 – 12- 2009 of MY BANK LTD.

Invoice by OTCL for the Payment of "Advance Freight Charges"

            The shipment of rice was loaded on January 09, 2010 successfully by the Pakistani exporters through the Maersk Line for Cotonou Sea port of Republic of Benin. OCTL has issued a House Bill of Lading which was received by the Niger National Mr. Abdourahamane Chekarou, then visiting Pakistan and the 2^nd party of the contract from Ocean Tiger Container Line's owner Mr. Rehan Hafeez in his office. The House Bill of Lading was dully stamped (duty paid) and marked as the Freight charges are pre-paid.

            The shipment arrived at the destination port on February 15, 2010 and the importer (Mr. Abdourahamane Chekarou) was informed by the destination port agent that the freight charges of the shipment was not paid, hence the shipment could not be released to him. He immediately contacted The Vision Foods in Pakistan and informed about the situation. The Vision Foods, together with Ghaffar Corporation has contacted Mr. Rehan Hafeez of OTCL for the matter, which in return was not available in his office nor was his office responding for the explanation of the situation for about a week. According to The Vision Foods, 

"We are informed by Mr. Abdourahamane Chekaraou from Niger that Shipment arrived but the shipping company's office in Cotonou Seaport refused to release the shipment to consignee. Reason given was that the freight is not paid to the carrier at Origin (Pakistan). We contacted Mr. Rehan Hafeez who was not made available to us for several days, about a week. Finally, when available by end of February 2010, Mr. Rehan told us that Shipping Line (Maersk Pakistan Private Limited) has increased the freight to double the amount settled and paid by us. When we contacted Maersk Pakistan, Mr. Salman Siddiq Memon, Executive, Maersk Pakistan informed us that the actual freight invoiced to Ocean Tiger is about Rs. 3.3 Million. The same was later confirmed verbally by Mr. Imran Iqbal Killedar, The Finance Manager of Maersk Pakistan in a meeting on March 16 2010 in the office of Maersk Pakistan in Karachi".

The shipment is still laying at Cotonou port, detention charges by the port authorities are rising on daily basis, causing huge losses to the Importers. They are writing furiously to their counterparts in Pakistan. The situation is explained in a letter by the importer's representative, 

"I'm really confused about this issue. Mr Alio (The Owner of the Importing Company) is so much annoyed with tension here. He doesn't and is considering us as liars. Monday will be too long I can tell you that I'm so worried that I no longer sleep do not let us fall to pay fines. Monday is the dead line of it. It will be around 1000 USD per container (21,000 dollars in total) which is too much".

In view of the situation, on March, 01, 

"A meeting with OTCL held at the office of Ghaffar Corporation, attending by Mr. Mehmood Ghaffar, Mr. Akhtar Hassan,(Ghaffar Corporation) Mr. Syed Haroon Haider Gilani and his associate (The Vision Foods) and Mr. Rehan Hafeez(Ocean Tiger Container Line)  in which Mr. Rehan Hafeez requested that the shipping line has increased the freight and he is unable to pay the additional amount hence Ghaffar Corporation should provide additional amount to immediate release of cargo at Cotonou Port. Later in the evening Mr. Rehan Hafeez in tele-conversation with Mr. Qazi Aziz Iqbal asked to pay Rs 500,000 (Approx $ 6000) and the cargo shall be released within 24 hours.

In order to save the rising amount of detention, it was considered peanuts and OTCL was asked about the arrangements of the payment at Cotonou by the importer and The Vision but Mr. Rehan Hafeez replied them,

"Maersk (Line) refused to accept Freight partly prepaid & partly collect. As this is against of State bank of Pakistan LAW. Please ask your people to send Remittance to your account & you will give us Pay Order on the Name of Maersk Pakistan (Pvt) Ltd., if Not Remit into our Account & we’ll Make this PO (Pay Order)".

Upon this notification from OTCL, Ghaffar Corporation paid the additional amount of Rs. 500,000 immediately through the Pay Order # 3647328 to Ocean Tiger Container Line. Despite the promise of release of cargo within 24 hours upon the "additional payment" of Rs. 500,000, the cargo has not been released to the importer in Niger.  Mr. Rehan, responding to an email told The Vision that he is not able to release the cargo before March 18 – 20^th 2010. The Situation disturbed the importer and he became furious and rebuked The Vision of Pakistan,"

You asked us to complete 7000 USD to release our goods in 48h which we did. Now Rehan(owner of Ocean Tiger Container Line) is talking about 20th (Of March 2010) before releasing the goods. You know yourself that Elh Alio will not understand this. Now what are you suggesting to do with Mr Rehan? If you are able to reply please do it as you know in which trouble I am. So for that we are going get penalties at Cotonou port which is not Fair. 

The Vision has been in contact with all the stakeholders, including Maersk Line to solve the issue and get the cargo released immediately in order to save the contract and repute of Pakistan in its very deep relations with Niger. On March 18, 2010, Maersk Line wrote to The Vision, 

"Despite commitment from OTCL and continuous follow-up regarding settlement of freight invoice for The above B/L, OTCL has not settled the same. OTCL has now submitted 02 post dated cheques dated March 24th and 29th respectively covering the remaining freight charges. However, as customer is on cash and does not enjoy a very healthy payment history, we are unable to release the O.B/L against these cheques. We have advised OTCL to arrange immediate payment through a pay order to expedite release of subject shipment's documents". 

In addition to Maersk Line, The Vision has become in contact of relevant trade bodies and government offices to solve the matter on immediate basis. Main objectives for this drives were to save any rift between two countries over this issue and sustainability of the contract for the export of rice and the opportunity to earn multimillion dollar foreign exchange for the country. The whole thing was jeopardized by a fraudulent freight forwarder, causing loss to National Interests and revenues.  

In return, Ministry of Commerce, National Trade & Transport Facilitation Committee, Supreme Court of Pakistan, Sindh High Court and Government of Sindh etc responded with positive but very slow attitude. FIA has started investigating the matter and called The Vision and Ghaffar Corporation for the details.  FIA was furnished with all the relevant documents and evidences about the matter.

No one reached Ocean Tiger Container Line nor was investigated about the issue further. The Vision Foods was roaming into the offices for the solution from Maersk Line to FIA but everywhere they were just getting do-more, wait and watch sort of responses.     

The Climax

In early April 2010, the shipment was confiscated by the Cotonou Port Authority to recover the detention charges and auctioned. Pakistan has lost a very potential buyer of its rice with about a billion dollar trade in 3 years as Niger is completely dependent for its food on imports and Pakistan had got the golden opportunity to capture the market where every year all the international powers, shower billions of dollars due to its critical significance. The Vision Foods was shut down, after this fraudulent activity as the company could no longer afford to continue its business and several dozen Pakistani's has lost their jobs consequently.

Only shipping lines has banned the company for doing business with them for certain period (as long the issue is being circulated) and in late 2010, the company is reported to be active again, this time targeting Cement Sector as their victims.

Disclaimer: The contents of this article are published in good faith of Pakistani Trade and Shipping Industry. The particulars are thoroughly verified and evidences are taken into consideration properly by our professionals and Legal Team before drafting and publishing. Still if there are concerns, any further information required, please write us to scamsinpakistan@gmail.com.