KARACHI: Islamuddin convicted in loan default case
By Tahir Siddiqui
KARACHI, Oct 18: Islamuddin Shaikh, a former senator and industrialist, was convicted on Thursday for committing wilful default on over Rs845 million bank loans and sentenced to three different terms, totalling 42 years.
Judge Dr. Qamaruddin Bohra of the Accountability court No. 1 convicted the industrialist in three different bank loan default references and imposed separate fines, totalling over Rs162.89 million.
The reference No. 10/2000 was made against the Ajma Corporation Ltd for wilful default on the Rs440.055 million loan, secured from Habib Bank. Eight directors of the concern Islamuddin Shaikh, his wife Naureen Shaikh, brother Nooruddin Shaikh, his mother Hakeeman, Akhtar Ali and Qamar Jehan were nominated in the reference.
Except for Islamuddin Shaikh and Akhtar Ali, all other accused, who remained untraceable, were convicted and sentenced to a three-year term under section 31-A of the NAB Ordinance, 1999, for deliberately avoiding court proceedings against them.
According to the reference, the accused were sanctioned a cash finance facility to the tune of Rs15 million on June 25, 1987. Later the facility was enhanced from time to time to the extent of Rs30 million till April 23, 1990.
The accused allegedly failed to adjust the facility on its due date and committed default.
In addition to the above facility, the accused availed and utilized finance against Imported Merchandise Facility from time to time and the liability to the tune of Rs121.473 million was outstanding.
The accused also availed an overdraft facility to the tune of Rs2.5 million but they did not adjust the same.
On July 15, 1991, the accused availed Fixed Assets Finance facility to the tune of Rs22.186 million and defaulted on the repayment.
The bank had also filed a suit for the recovery of Rs350 million on May 30, 1995, in the Banking Tribunal. The suit was, however, transferred to the Sindh High Court which issued a decree against the defendants jointly in the sum of Rs238,365,438 with future mark-up at the rate of 48 paisa per day from the date of institution of the suit till payment.
The judge sentenced Islamuddin Shaikh and Akhtar Ali to suffer rigorous imprisonment for 14 years. The judge also imposed a fine of Rs73.342 each on the convicts and ordered that the defaulter on the payment would have to undergo an additional five-year term.
The two accused were also disqualified from holding any public office for 10 years under section 15 of the NAB Ordinance.
The second reference in which Islamuddin Shaikh and Akhtar Ali were sentenced to a 14-year term each pertained to wilful default on Rs261.577 million loan secured from the Habib Bank by Star Oil Mills, owned by the Shaikh family.
The judge also ordered the two accused to pay Rs43,596,177 each to the extent of their liabilities as fine. In case of default on the payment, they shall further undergo simple imprisonment for five years.
Naureen Shaikh, Nooruddin Shaikh, Kaneez Fatima, and Qamar Jehan were also convicted and sentenced to a three-year term for avoiding court proceedings in this reference.
Another 14-year RI was awarded to Islamuddin Shaikh by the judge in the reference No.12/2000, which pertained to the default on 143.711 million loan, secured by the Shaikh family in the name of Star Solvent Extraction Soap (pvt) Ltd.
The judge imposed a fine of Rs45,954,322 on accused Islamuddin Shaikh, who would have to undergo an additional five- year term in case of default on the payment.
The absconding accused Kaneez Fatima, Naureen and Nooruddin Shaikh were convicted and sentenced to a three-year term for avoiding proceedings in this reference.
All three references against the former senator were investigated by Inspector Faqir Muhammed of the Federal Investigation Agency.
Judge Bohra, who has so far decided 22 corruption references, observed in one of his three over 50-page judgments: I do not agree with the contention of the accused that the interest/markup is about 200 per cent, therefore, he cannot be termed a wilful defaulter for non-payment. Answer is very simple that the banks do not run on charitable basis. They advance loans on certain conditions, agreed between the banks and borrower and thereby the banks receive interest/profit/ markup under the prevailing law being enforced and the borrower cannot claim in presence of specific agreement regarding the profit/interest/markup that the same cannot be charged.
