Holding the corporate watch dogs, Securities and Exchange Commission of Pakistan (SECP) and National Accountability Bureau (NAB), responsible for lethargy in the recovery of Rs950 million from Natover Lease and Refinancing Company (NLRC), Senate Sub-Committee on finance took cudgels on Tuesday by directing NAB to at least complete its preliminary investigations in the scam and trace the assets so that they can be frozen to at least ensure some recovery of the looted amount.
The case of NLRC is under investigation by the committee for the last several months. It surfaced in mid 2007 when the board of directors report was out which contained a confessional statement of Chief Executive of the company Nadeem Shaikh about massive irregularities. SECP tried to absolve itself of the scam proceedings by claiming that it does not have enough power to investigate the matter and had referred the case to NAB in 2009 for investigation. NAB on the other hand claimed that it had dropped the investigation as the matter was subjudice.
Chairman Haroon Akhtar Khan said there was no bar on carrying out investigations even though the matter was in the court. Senator Haji Adeel and Senator Kulsum Parveen also attended the meeting. Chairman SECP Muhammad Ali, Director Commercial Crimes Wing NAB, Additional Secretary Ministry of Finance, representatives from the ministry of law and former directors and auditor of the company were also present.
NAB was directed by the committee to reinitiate its investigation to trace the assets of NLRC and present the report within two weeks to the committee. SECP was directed to review all its rules and procedures for oversight of the non-banking finance institutions (NBFI) to avoid occurrence of mega scams in future due to weak oversight. Senator Khan asked that when ex CEO of the company could face four years imprisonment due to the cheque bounce, then why was not he arrested and investigated for defrauding an amount of Rs950 million.
SECP officials claimed that they had taken action against the company upon getting the information. However, the committee was not satisfied with the explanation and observed that committee was not ready to bailout SECP till the issue was finally resolved and the looted money was recovered. Chairman SECP Muhammad Ali said due to the stay granted by the court, they were unable to further pursue the case. Committee members were of the view that depositors’ money was misused for years and SECP was unable to detect it. NAB officials admitted that due to the cases pending before the courts, they dropped the investigation. However, members were of the opinion that NAB had vast powers like arrests, freezing of assets, putting names of CEO and directors on ECL, but they did not bother to take any of these steps. NAB officials assured the committee that they would again start investigation and trace the assets of the company and would report back to the committee within stipulated time frame. The committee also directed ministry of law to examine the court’s stay order issued against SECP and its legal implications to determine the role of SECP for not pursuing the case properly.
