Transparency International Pakistan has received a complaint against alleged illegal appointment of Azhar Abbas Jaffery as Managing Director of the House Building Finance Company Limited (HBFC) who the TIP alleges does not have Pakistani nationality while he also faces allegations of financial irregularities.
In a letter sent to Dr Abdul Hafeez Shaikh, Minister of Finance, Revenue, Economic Affairs, TIP advisor Adil Gilani raised serious questions against Jaffery and said that the HBFCL has been restrained from convening meetings, either of HBFCL board or any of its committees by the government of Pakistan.
“That MD, Azhar Abbas Jaffery, was appointed under section 11 of the Banks Nationalisation Act, 1974. According to section 11(12), a person who is not citizen of Pakistan shall not be appointed under this section. According to section 11(5), a person who is disqualified under section 12 after appointment shall stand removed,” said the letter.
The TIP stated that the SBP has written a letter to Wajid Rana, Secretary MoF on HBFCL stating , “in the light of reservation expressed by the State Bank of Pakistan (SBP) and Security and Exchange Commission of Pakistan (SECP) after confirmation from NADRA that HBFCL Managing Director, Azhar Abbas Jaffri has surrendered Pakistani nationality after obtaining the nationality of Singapore”. Azhar Abbas Jaffry was appointed HBFCL MD in 2009 by the PPP-led coalition government.
Gilani further said that Azhar Abbas Jaffery has allegedly managed to appoint in 2010 one Ms Aatiqa Lateef a partner of M/s Awan & Raza as Group Head, Legal, Strategy & Marketing at HBFC, and anther partner of M/s Awan & Raza Mr. Awan Raza as HBFC legal Advisor, without inviting expression of Interest in press and PPRA website at exorbitant cost, as well as additional expenses of travel and lodging/boarding as he comes from Islamabad which is violation of Public Procurement Rules 2004.
Gilani said according to news reports alleging that the MD had granted million of rupees as bonus to himself and cheque numbers were also quoted. It was further alleged that before the appointment of Mr. Jaffery in the HBFC, the disbursements were Rs.3.85 billion rupees while when he was made MD in 2009, the lending fell to 715 million and then 679 million in 2010. “Also that Mr. Jaffery’s contract has expired three month ago in January 2012, but he is still continuing as MD of HBFC,’ said Gilani.
He further alleged that the terms of Mr. Tasneem Ahmed Siddiqui and Mr. Zakaria M. Fazil (representative of ABAD) as Chairman/director and Director of HBFC expired in 2005 but they were illegally continuing without Ministry of Finance notification of since 2005 ( 7 years) though SBP has given its clearance for issue of notification to MoF in April 2010.
“That SBP has communicated its serious objections on the illegal status of the two Directors to Mr. Wajid Rana, Secretary MoF, who has taken no action against them. SBP has also suggested to the MoF that presence of directors in a public sector institution for over a decade is undesirable from the perspective of good governance”.
He added that the Board of Directors, which is illegal as Tasneem Ahmed Siddiqui and Zakaria M. Fazil have seized to be directors of HBF in 2005, have increased the Director Board’s monthly remuneration by 500%, from Rs 5,000 to Rs 25,000.
“Moreover, the same illegal board has approved annual bonus of Mr. Azhar Abbas Jaffery up to Rs 2,5000,000”.
Transparency International Pakistan has request the minister to examine the allegations, and if they are correct, appropriate action needs to be taken urgently, as under the rules of business, Minster of Finance was fully responsible for allowing as well as condoning such violations, including that of Public Procurement Rules 2004, and is to be held accountable under the law of land.