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Fake Degree Scam Unravels Nascent Pakistan Media Empire

Pakistani police officer stands guard at the office of Axact software company in Karachi, May 27, 2015.

A scandal surrounding an academic degree scam spanning the globe and involving hundreds of fake online universities has rocked Pakistan and led to the unraveling of a yet-to-be-launched media empire that was supposedly poised to change the country's television news industry.

Investigations into Axact, a company that claimed to be Pakistan’s biggest software exporter, started after a story in The New York Times alleging that Axact had made millions selling fake degrees to students stretching from the United States to the Middle East.

The Times also analyzed more than 370 websites — including school sites, and also a supporting body of search portals, fake accreditation bodies, recruitment agencies, language schools and a law firm — that bear Axact’s digital fingerprints,” the paper reported.

Earlier this week, investigators in Pakistan’s commercial hub, Karachi, raided Axact offices and discovered rooms full of blank degrees stacked against the walls.

Sources in Pakistan’s Federal Investigation Agency told the country’s widely read English language daily, Dawn, that the seized records showed most of Axact clients to be U.S. citizens and that details had been shared with the U.S. Embassy.

Interior Minister Chaudhry Nisar Ali Khan said that his country would seek help in the investigation from the FBI and Interpol.

On Thursday, the spokesman for Pakistan’s Ministry of Foreign Affairs, Qazi M. Khalilullah, said that “a number of entities and universities from the U.S. side are also involved and … our Ministry of Interior has asked for cooperation of the U.S. authorities.”

When asked whether an official request has been made, Steve Castonguay, the spokesman for the U.S. embassy in Islamabad, said, “we are in touch with Pakistani officials on this issue,” without giving further details.

The chief executive of Axact, Shoaib Ahmed Shaikh, along with other executives of the company, have been charged with several crimes, including fraud and money laundering.

Shaikh once said he wanted to be “even richer than Bill Gates,” referring to the co-founder of Microsoft.

“Axact aims to increase Pakistan’s IT exports by $50 billion, by expanding its workforce to 100,000,” said the company’s website.

Other statements on the site indicated that Shaikh saw his role in Pakistan as much bigger than that of an entrepreneur.

“Watch Mr. Shoaib Ahmed Shaikh’s captivating speech to learn how Axact will make sectors of food and shelter, healthcare, judicial assistance and education accessible to every Pakistani by 2019,” the front page of the site announced.

He also planned to launch a media empire by the name Bol, which literally means “speak” in Urdu. This would have included news and entertainment TV channels, Urdu and English language newspapers, FM radio, as well as an auditorium to hold live events.

The channel hired Pakistan’s top anchors with substantive salary increases plus Western-style perks like an in-house gym, swimming pool, indoor games and good retirement benefits.

The huge financial investment gave rise to rumors about Bol and its ownership.

Some believed that Pakistan’s intelligence agency, the Inter-Services Intelligence, better known as the ISI, was behind its launch. Others thought a well-known real estate tycoon was its financier. Still, others said Dawood Ibrahim, the head of an Indian organized crime syndicate supposedly living in Pakistan, was putting up the cash.

Shaikh said rival channels were spreading the rumors for fear of competition. He also said The New York Times story was part of a conspiracy to help a rival media group, Express, that is associated with the International New York Times.

“The defamatory article published on May 18, today’s events and their derogatory portrayal by the media proves that this is a massive conspiracy by the seths [tycoons] of the Pakistani media industry to defame Bol and Axact and derail the launch of Bol,” a statement on Axact’s website said.

His passionately-worded video appeal defending his company, uploaded on Axact’s website, were not enough to stop a mass exodus of famous media personalities from Bol.

The future of the channel became even more uncertain Thursday when the government ordered the Pakistan Electronic Media Regulatory Authority to stop its transmission until the investigation against its parent company, Axact, is complete.

Shaikh was arrested this week and a court in Karachi has placed him in police custody until June 4.

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