Axact Pakistan
Pakistani media representatives gather around the Axact company building after a raid by the Federal Investigation Agency (FIA) in Rawalpindi. FAROOQ NAEEM/AFP/Getty Images

Authorities in Pakistan raided the offices of a Karachi-based software company that was accused of operating a massive, online diploma mill.

Axact, which denies any wrongdoing, had its headquarters and other premises across the country visited by federal investigators acting upon an Interior Ministry order to verify allegations brought forward by The New York Times in a report.

"Today, we raided the offices of Axact. We will investigate to unearth whether a complaint against the company regarding fake degrees business is true," Pakistan's Federal Investigation Agency (FIA) senior officer Kamran Attaullah told AP.

No arrests were made, with investigators copying computers data and seizing hard drives during the four-hour operation.

The raid came after The New York Times alleged Axact runs a vast online scam, with some 370 affiliated bogus schools and universities' websites marketing fake academic degrees and certificates worldwide.

The newspaper claimed the company, which employs 2,000 people, made millions charging thousands of dollars for fake credentials. It alleged clients were in some cases unaware they were contacting a bogus university and were talked into spending large sums on worthless papers.

However, Axact has strongly denied the accusations and is also threatening to take legal action. In a statement, the company said it condemned The New York Times' story as "baseless, substandard, maligning, defamatory, and based on false accusations and merely a figment of imagination published without taking the company's point of view".