Nawaz Sharif. Photo: Reuters / Mike Segar
Nawaz Sharif. Photo: Reuters / Mike Segar

Pakistan’s Supreme Court on Thursday ordered further investigations into corruption allegations leveled by the opposition against Prime Minister Nawaz Sharif, but ruled there was insufficient evidence to order his removal from office.

The court late last year launched an investigation into the Sharif family’s offshore wealth after opposition politicians threatened to spark street protests, and following months of wrangling between the government and opposition over the formation of a judicial commission. The allegations arose from leaks contained in the so-called “Panama Papers.”

Opposition parties accuses Sharif of failing to explain the source of money in offshore companies owned by his children and of lying to parliament. Sharif and his family have denied wrongdoing.

“The Supreme Court has decided… the same thing that Nawaz Sharif himself had decided six months ago, when he ordered the formation of a commission to investigate [the allegations],” said Khwaja Asif, a senior leader of Sharif’s ruling PML-N party, following the announcement.

Sharif will remain in office during the course of the investigation, which will also focus on his sons Hassan and Hussain, the verdict said.

The bench decided the source of the funds in question had still not been conclusively established. It ordered that a joint investigation team, focused on doing so, be formed within seven days. Representatives from the Federal Investigative Agency, the Securities and Exchange Commission of Pakistan, the central bank, and other bodies will be involved and will be tasked with submitting fortnightly reports to the Supreme Court.

The allegations focus on Sharif’s previous two terms in office, in the 1990s. Opposition politicians, including Imran Khan, of the PTI party, allege the prime minister and his family illegally profited from his position.

“The Supreme Court has decided… the same thing that Nawaz Sharif himself had decided six months ago, when he ordered the formation of a commission”

In 2016, the International Consortium of Investigative Journalists (ICIJ) leaked 11.5 million documents relating to more than 200,000 offshore entities around the world, from the law firm Mossack Fonseca. Hundreds of Pakistani politicians, industrialists, business people, judges and luminaries, were implicated.

In particular, documents appeared to show that three of Sharif’s children – Maryam, Hassan and Hussain – owned offshore holdings in three British Virgin Islands-registered companies. In 2007, the companies were involved in a loan of US$13.8m, with Sharif-owned properties in the United Kingdom used as collateral, and a separate 2007 transaction worth US$11.2m.

Conducting off-shore business is not illegal in Pakistan but Mr Sharif’s accusers believe the companies were used to avoid taxes and / or launder wealth gained through corruption. Sharif contends that the money was acquired legally and that as the assets in question are not in his name, but his children’s, he has never been obliged to declare them.

A verdict to remove Sharif would have left his party in power but would, nevertheless, have sparked turmoil at a time when Pakistan is experiencing modest growth and improved security after years of violence, and when its civilian government and powerful military have appeared to come to an uneasy truce.

Pakistan’s stock market jumped after the ruling with the benchmark KSE 100 gaining almost 2%. Sharif is seen as pro-business.

Two of five judges on the court bench recommended that Sharif should step down but they were out-voted.

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