ISLAMABAD – A voluminous report submitted in the Supreme Court by the Punjab government on Rs 9 billion Bank of Punjab (BoP) loan scam has revealed that former Punjab chief minister Pervez Elahi siphoned Rs 5.4 billion of the BoP, whereas Federal Board of Revenue (FBR) Chairman Salman Siddique approved unlawful credit proposals of Rs 1.1 billion in July 2006.
The report, consisting of 15-volumes (5,000 pages), has been prepared by Punjab Additional Inspector General of Police Aftab Sultan, being the head of a joint investigation team. On June 18 last year, the Supreme Court had appointed Sultan head of the joint investigation team set up to look into irregularities in the BoP because the court was not satisfied with the investigations conducted by the National Accountability Bureau (NAB).
During the hearing on Wednesday, a three-member Supreme Court bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Muhammad Sair Ali and Justice Ghulam Rabbani asked Punjab Advocate General Khawaja Haris to read out the important findings of the report.
Reading out the report, Haris said former Punjab chief minister Pervez Elahi secured a huge loan of Rs 5.4 billion from the bank in the name of Phalia Sugar Mills and later the amount was spent on a new project called ‘Colony Sugar Mills.’ He said that the then Punjab chief secretary, Kamran Rasool, had obtained a long leave and during this period he had been working in Elahi’s mills.
He said during the leave the chief secretary remained the chairman of the board of directors of the bank and during this period he also interacted with BoP’s then president, Hamesh Khan. A representative of the NAB told the court that NAB was unable to file references against the accused as it had no chairman and the prosecutor general.
The court directed Haris to make the report public and accessible to all the citizens whosoever interested to get its copy subject to the rules and regulation. The court also directed NAB authorities to obtain a copy of the report and consider it in respect of the cases and references already pending.
NAB had also been asked to read the report and collect evidence.
The court praised Aftab Sultan for his efforts in preparation of the report. Meanwhile, it adjourned hearing for three weeks. According to the report, FBR Chairman Salman Siddique, then one of the two directors of the bank in a casual manner approved unlawful credit proposals amounting to Rs 1.1 billion in July 2006 on behalf of the board of directors.
The report stated that the actual corruption at the BoP amounted to Rs 76.178 billion, as on the paper, the bank showed profits from 2005 to 2008, but actually it was running a loss. It said former BoP’s former president Hamesh Khan, with the help of board members, issued loans to the bank defaulters.
About Punjab Chief Minister Shahbaz Sharif, the report stated, “As far his (Hamesh) assertions concerning the person of Shahbaz Sharif are concerned, no matter as to what the truth is, the fact remains that, it is no way diminishes his criminal conduct. Then, every one is entitled to apply for facilities but in the ultimate analysis it’s the concerned bank’s prerogative to grant the same or to refuse, as it deems fit.”
It said the bank’s liability had been increasing day by day, but both the State Bank and the Punjab government had no clue of what was going on. Terming the BoP scam one of the largest swindles in the country’s history, the report said the bank was virtually deprived of over Rs 11 billion in advances and mark up by the Haris Group alone.
The report said when unprecedented media scrutiny of the bank started on June 21, 2007, its existence became doubtful, as its equity’s market capitalisation declined by a staggering amount of around Rs 64 billion within a short period of time. “During the course of the investigation, the report said 61 people were examined as witnesses under Section 161 of the Code of Criminal Procedure.
The report regretted that millions of rupees had been doled out from the BoP to non-existent clients (Haris Group), the main beneficiary of the scam and one of the petitioners, against negligible securities, rather without any collateral.
The report said it had now been conclusively established that the properties, which were placed as security with the bank were heavily overvalued. Such overvaluations were the result of manipulation with the active connivance of the valuators, it said.
Despite the fact of having no businesses, the Haris Group opened accounts in the BoP by using fake identities and documents, while funds were sanctioned to them at their discretion. It appeared that the bank had little say in the matter, the report said, adding that in more than 95 percent of the cases, the sanctioned funds were withdrawn within a day after approval.
In its submission for the court consideration, the report said that none of the accused of the scam might be allowed to enter into a plea bargain, besides the principal amount along with full mark-up at penal rates be recovered from the main accused, Sheikh Muhammad Afzal and his accomplices.
