Fortune Sky is Your Go-to Source for the Latest Finance News, Covering Markets, Business, Industries and Internet.
⎯ 《 Fortune • Sky 》

Imran Khan’s Arrest in Graft Probe Stokes Anger in Pakistan

2023-05-09 21:51
Paramilitary troops arrested Pakistan’s former premier Imran Khan on the orders of the anti-corruption bureau, a development that
Imran Khan’s Arrest in Graft Probe Stokes Anger in Pakistan

Paramilitary troops arrested Pakistan’s former premier Imran Khan on the orders of the anti-corruption bureau, a development that escalates the cash-strapped nation’s political crisis and could draw thousands of his supporters to the streets.

Dozens of officials from the Pakistan Rangers escorted Khan into a black SUV while others beat back some of his supporters in a court complex in Islamabad, according to video footage shared by Khan’s Pakistan Tehreek-e-Insaf party. The party called for supporters to come out and “defend” their country, urging protests across major cities in Pakistan.

Khan’s party said he had been picked up in connection with a graft investigation involving a plot of land. The 70-year-old politician is in custody at the National Accountability Bureau’s headquarters, the police said.

Hundreds of Khan’s supporters and party members began gathering across the country, chanting slogans and waving party flags, vowing to fight for him.

“The arrest marks a major escalation in a long-running confrontation between Imran Khan and the civilian and military leadership,” said Michael Kugelman, director of the South Asia Institute at the Washington-based Wilson Center.

The move followed soon after Khan repeated earlier allegations that a senior military officer was behind his assassination attempt last year and “given that Khan was detained by paramilitary forces, this was likely the military acting directly. But if so, the civilian leadership, given their long and ugly vendetta with Khan, surely backed the move,” Kugelman added.

The NAB could present Khan in a special court and request to keep him in custody to assist with the investigation — a decision that will be contested, said his lawyer Intazar Hussain Panjutha. But first, Khan’s legal team is taking up the “illegal” arrest with the Islamabad High Court’s chief justice who has already summoned the police chief, he added.

The NAB has been used as a tool to go after political opponents in the past. Former premier Shahid Khaqan Abbasi and Finance Minister Miftah Ismail were kept in custody for months before being released and found innocent.

Khan faces a slew of court cases and was set to be formally indicted Wednesday in a case that involved allegations that he did not properly disclose earnings from the sale of state gifts from his time in office.

The government has no control over the NAB, Interior Minister Rana Sanaullah said at a press conference in Islamabad. “Khan has done corruption that is clearly documented. This and state-gift selling case are both evidence.”

Pakistan’s dollar bonds pared earlier gains, with the security due April 2024 retreating to 49.9 cents on the dollar from as high as 51.3 earlier Tuesday, after news of the arrest. The nation’s rupee fell 0.35%, the most in a month, at close. Its benchmark KSE-100 Index fell by 1.1% at close, the most in almost seven weeks.

“More protests, more disruption, more violence, and more political and economic dysfunction is on the way,” said Hasnain Malik, a strategist at Tellimer in Dubai. “Taking the painful decisions the economy needs and holding orderly elections will become even harder now.”

The latest upheaval comes as Pakistan is grappling with an economy in deep distress. Moody’s Investors Service has warned the nation could default without an International Monetary Fund bailout as its financing options beyond June are uncertain.

Islamabad is struggling to restart a $6.5 billion bailout program from the Washington-based lender, which has stalled after the government failed to meet some loan conditions. Political tensions will only add to the risks of a delay.

Over the weekend, Khan had once again accused the nation’s powerful military of being behind at least two attempts to murder him, focusing on the alleged involvement of a senior official from the Inter-Service Intelligence, or ISI, which oversees Pakistan’s internal security.

The army had slammed his remarks and asked him to address the matter in court.

The politician is agitating for early elections after getting ousted in April 2022 in a no-confidence vote. Emboldened by strong support in opinion polls and rallies, Khan has shown no signs of backing down against the government and the army and is seeking support from the Supreme Court to hold polls in two provinces for a start.

The arrest could backfire on Shehbaz Sharif’s government, Kugelman said.

“It could stoke unrest, intensify public fury against the government, anger key Pakistani partners like China that have called for reduced tensions, and raise serious concerns among bilateral donors and the IMF.”

--With assistance from Ismail Dilawar, Netty Ismail and Srinivasan Sivabalan.

(Updates with details)