Rs. 106 Million Embezzlement Exposed in KP’s World Bank-Funded Project

A financial scandal worth more than Rs. 106 million has surfaced in Khyber Pakhtunkhwa, involving the misappropriation of funds from a World Bank–supported project. The scam reportedly involved forged documents and possible collusion with a government bank.

According to official records, the amount was withdrawn from the project’s account on July 3, 2025—despite the provincial finance department freezing all project accounts between June 25 and July 24 for the start of the new fiscal year 2025–26.

The Project Management Unit (PMU) of the Khyber Pakhtunkhwa Human Capital Investment Project (KP-HCIP) has alleged that fake cheques, fabricated authority letters, and forged reference numbers were used to secure the release of the funds. Despite this, the bank in question cleared the transactions without verification. The Project Director has asked the bank’s senior management to involve the Federal Investigation Agency (FIA) and recover the stolen amount immediately.

The KP-HCIP, valued at Rs. 26 billion, is being implemented with World Bank assistance. Documents reveal that three cheques from the project’s Revolving Fund Assignment Account (No. 0386004174006254) were fraudulently processed through the Peshawar Cantt branch. The details are as follows:

Cheque No. 1326903725: Rs. 48,760,245

Cheque No. 1326903733: Rs. 55,320,306

Cheque No. 1326903733 (duplicate): Rs. 1,964,028

The repeated cheque number and identical reference details have raised further suspicion. The forged authority letters cited the same reference number—PMU/KP-HCIP/EASED/Release/2025 dated June 20, 2025—while fake schedules carrying counterfeit signatures and stamps of the Accountant General’s Office were also submitted.

Project Director Asif Shahzad confirmed that his team detected the irregularities. He pointed out that the PMU had not requested a new cheque book nor authorised anyone to use it, raising serious questions about how the fraudulent cheque book was obtained.

He further criticized the bank for failing to carry out mandatory verifications with the PMU and the Accountant General’s Office before clearing such large transactions. He termed the incident a clear case of systemic negligence. The PMU has demanded that all bank officials responsible for lapses be identified and that the case be referred to the FIA’s Banking Circle for criminal proceedings.

When contacted, the bank’s regional executive operations confirmed receiving the complaint and said an inquiry is underway. He noted that while the cheques were cleared by the government bank, the funds were actually withdrawn from a private bank. He also added that while the investigation is still in its early stages, the possibility of collusion by project officials cannot be ruled out.