Taxi driver 'saw Pearl in car with militant'

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A taxi driver testified yesterday that he saw Daniel Pearl get into a car with a British-born Islamic militant, Ahmed Omar Saeed Sheikh, on the day the American reporter was taken hostage by kidnappers who later murdered him.

Mr Sheikh pleaded not guilty to the kidnapping and murder of Mr Pearl as his trial opened in the Pakistani city of Karachi yesterday. Mr Sheikh, who is on trial with three others in a closed and heavily guarded courtroom, told Judge Abdul Ghafor Memon that he rejected the court's authority, according to a lawyer representing two of Mr Sheikh's co-defendants, Khawaja Naveed Ahmed. "He pleaded not guilty and said, 'I don't recognise this law and I only accept sharia [Islamic] law," Mr Naveed told reporters outside the court. Raja Qureshi, the chief prosecutor, said the judge gave Mr Sheikh's complaint short shrift and told him: "You are being tried under the law of the land."

When he was abducted in January, Mr Pearl, South Asia correspondent of The Wall Street Journal, was investigating possible links between the al-Qa'ida terror group and Richard Reid, the Briton alleged to have tried to blow up a transatlantic flight with explosive hidden in his shoes.

Several days later, e-mails were received by international media organisations from a previously unheard of group calling itself the National Movement for the Restoration of Pakistani Sovereignty, with attached photographs showing Mr Pearl with a gun held to his head. The e-mails demanded that Pakistani nationals being held by America at the Guantanamo Bay prison camp be returned for trial in Pakistan, as well as the honouring of an American agreement to deliver F-16 fighter aircraft to the Pakistani Air Force. Washington made clear there was no room for negotiation.

On 21 February, almost a month after the journalist's disappearance, the US deputy high commission in Karachi received a videotape, which showed Mr Pearl's throat being cut and his decapitated head.

Mr Sheikh had been arrested 10 days beforehand, though he claimed that one week before his formal arrest he turned himself in at the home of Brigadier Ejaz Shah, the top bureaucrat in Punjab province and formerly a senior officer in the Inter-Services Intelligence (ISI), Pakistan's powerful military intelligence agency.

Nasir Abbas, the taxi driver, told the court in Karachi that he picked up Mr Pearl from a house in the city on the day he disappeared and drove him to a location outside a hotel. He said he saw a white car pull up, and then Mr Sheikh "called to Pearl and Pearl got into the car, which whisked him away", according to the account of the defence lawyer, Mr Naveed.

Mr Sheikh has been linked not only to the Pearl case but also to Osama bin Laden. It has been claimed that a large sum of money sent to Mr Sheikh from the Gulf, part of the proceeds from the kidnapping of a businessman in Calcutta, was forwarded a few weeks before the 11 September attacks to Mohamed Atta, the hijacker who piloted the first plane into the World Trade Centre.

Mr Sheikh is suspected of having close links with the ISI, which before 11 September was the financial and military mainstay of Afghanistan's Taliban regime. It could explain why Mr Sheikh surrendered to a former ISI officer. And it would also help to account for Pakistan's reluctance to see Mr Sheikh extradited to the US. A federal grand jury has indicted him but President Pervez Musharraf, Pakistan's military ruler, told the US ambassador to Pakistan that he would "rather hang Sheikh myself than have him extradited".

The trial continues.