At least 28 people were arrested after a probe was ordered into a fake degree scam by a Pakistani IT firm, a day after a leading US newspaper accused the company of making millions of dollars through an elaborate network of fictitious universities.

Axact's headquarters in Karachi, and offices in Islamabad and Rawalpindi were raided and sealed and 28 employees were taken into custody by the Federal Investigation Agency (FIA) for questioning, FIA Deputy Director Tahir Tanveer said.

"So far we have arrested 28 employees and we have sealed the offices," he said. Officials also seized computers, hard drives, manual records, documents and equipment from the call centres, during the raids, Tanveer said, adding that a team of the FIA's Cyber Crime wing has also raided offices of Axact in Rawalpindi.

The arrested Axact employees were shifted to offices of the FIA's cyber crime wing for interrogation. A report will be compiled after carrying out digital analysis to ascertain if the electronic equipment was used for illegal activities, officials said.

Earlier, Interior Minister Nisar Ali Khan had ordered an FIA probe into the multi-million fake degree scam. "It is shameful to hear such kind of news. Unfortunately, it is linked to Pakistanis and will tarnish image of the country," he said.

Pakistani parliament also echoed with the criticism when Senator Aitzaz Ahsan said that Axact should give explanation. Senate Chairman Raza Rabbani set up a committee to probe into the issue and submit a report in a month.

The New York Times on Monday accused Axact of running several websites of fake campuses, accreditation bodies which lure people into buying degrees of universities globally. Axact set up an elaborate network of hundreds of websites for fake universities with names like "Columbiana" and "Barkley", complete with paid actors who appeared as faculty members and students on promotional videos, the report said.

The company allegedly impersonated American government officials who "wheedle or bully" customers into buying State Department authentication certificates signed by US Secretary of State John Kerry, the report added.

Soon after the news appeared, a message on Axact's website declared the story "baseless, substandard, maligning, defamatory and based on false accusations", adding it would sue The New York Times. It termed the allegation as handiwork of business rivals. Axact was recently in news for launching Bol television as it was hiring journalists and media experts at exorbitant salaries.

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