Millat Tractors Limited (PSX: MTL) has vehemently denied recent media reports suggesting the existence of a First Information Report (FIR) against the company or its chief executive officer regarding alleged tax fraud. In a statement filed with the main bourse on Tuesday, MTL described the news as “fabricated and bereft of facts,” attributing it to a malicious campaign with malicious intent.
The controversy surfaced following reports that the Special Judge Customs & Excise Taxation Karachi would address alleged tax fraud involving fake or flying sales tax invoices purportedly committed by a Lahore-based leading tractor manufacturing company. The reports indicated that the CEO of the company was implicated in FIR Number 1 of 2022 filed before the Customs & Taxation Court Karachi.
The allegations against the CEO specifically accused him of committing tax fraud amounting to billions of rupees by allegedly withholding benefits under SRO.1248(I) 2020 & SRO.563(I) 2022 from farmers. The case, as per filings, highlighted serious sales tax discrepancies amounting to Rs. 13.286 billion detected by the Large Taxpayers’ Office (LTO), Lahore, under the Federal Board of Revenue (FBR). Additionally, an audit report submitted by LTO Lahore to the Federal Tax Ombudsman (FTO) indicated penalties amounting to Rs. 5.414 billion alongside the implicated sales tax amount.
The controversy further alleged involvement of several other individuals and shell companies benefiting from the purported scam.
In response, Millat Tractors Limited clarified that neither the CEO nor the company itself had been subject to any FIR related to tax fraud. The firm reiterated its commitment to compliance with all regulatory and legal standards, affirming its stance against any allegations of financial misconduct.
The unfolding situation underscores the sensitivity of corporate governance and regulatory compliance within Pakistan’s business landscape, particularly in the manufacturing and taxation sectors. Millat Tractors’ denial aims to address concerns raised by stakeholders and the public, seeking to maintain transparency and integrity amidst ongoing scrutiny.
The matter is set to develop further as judicial proceedings progress, with implications for both the company and its leadership pending further clarification from regulatory authorities.