Pakistan's Federal Investigation Agency (FIA) has arrested a local businessman who used a fraudulent letter of credit (L/C) in a scheme that allegedly conned a Chinese company out of 115 million Pakistani rupees (Rs115 million - US$414,000).

The FIA also accuses the businessman, Syed Zeeshan Afzal Bilgrami, of sending containers filled with soil and gravel instead of the contracted shipment of chromite ore.

Transaction details

The case involves Bilgrami's company, Danzu Traders, and Chinese importer, Jiangsu Provincial Foreign Trade Corporation.

In January 2024 the two companies signed an agreement for Danzu Traders to export to Jiangsu Provincial 1,500 metric tons of chromite ore, a valuable metal used to make ferrochrome, an important component in stainless steel.

But as the cargo was ready for shipment and inspected at Karachi Port, inspectors discovered that the containers destined for Xingang Port in China were filled, not with valuable chromite ore, but with soil, gravel, and stones.

Fraud outline

The FIA accuses Bilgrami of fraudulently executing an L/C in Danzu Traders' favour before the shipment arrived in China.

The Pakistani trader is also accused of presenting fake inspection certificates and specifying false quality standards and weights of the shipment in a deliberate effort to deceive both the bank and the Chinese importer.

As well as facing charges related to export fraud, Bilgrami is also therefore accused of defrauding the bank by submitting fake, forged and bogus documents for the execution of the L/C in favour of his company.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.