CIRC trying to trace defaulters’ properties: Rs23.545bn NPAs
By Nasir Jamal
LAHORE, April 23: The Corporate & Industrial Restructuring Corporation (CIRC) has engaged private asset tracking agencies to trace personal properties or other assets of directors and owners of the 38 units “with no assets” to recover an outstanding amount of Rs23.545 billion from them.
Of these 38 non-performing accounts, 28 with outstanding amount of Rs22.5 billion were assumed by the corporation from the UBL to prepare it for its privatization. The remaining 10 NPAs involving Rs1 billion were transferred to it by the NDFC to help its merger with the NBP.
“These no-asset NPAs have actually been thrust upon us (by the government) for cleaning up their balance sheets,” a CIRC official told Dawn here on Wednesday. “We do not know what to do with them except for try to track the personal property and assets of their directors and owners for attachment (through court) and sell them to recover the default amount,” he added.
Although he didn’t sound much hopeful of a major breakthrough, he said the corporation had successfully managed through the help of asset tracking agencies in identifying around 50 properties of the directors/defaulters/owners of some other units whose auction failed to raise enough money to clear their outstanding loans.
“All these NPAs would either be written off or returned to the federal government at the end of the day (after the CIRC is wound up in 2006) if the CIRC failed to identify the personal assets or properties of their owners for the recovery of outstanding amount from them,” CIRC CEO Javed Hamid told Dawn.
An official added the financial institutions should themselves have forgiven such loans. “I’m unable to understand as to why the UBL and the NDFC carried these NPAs which had no mortgaged assets or properties in their books.”
The CIRC was set up in September 2000 to clean up the infected balance sheets of six state-owned financial institutions including the HBL, UBL, NBP, NDFC, ADBP and IDBP by assuming their NPAs. It picks up only those NPAs which are in default of 365 days or more and are equal to or are in excess of Rs30 million.
Its objective is revival of sick units through a change in the management of these units by selling their assets.
Since its inception, it has assumed some 187 NPAs involving an outstanding amount of Rs128 billion. Of them, it has already sold 74 units for Rs2.401 billion. All the assets are sold at the real market value. As many as 10 units sold by the CIRC are said to be operational.
The corporation has managed to sell more units in Punjab than in any other province. It has disposed of 38 units out of 76 located in Punjab, 22 out of 75 in Sindh, 10 out of 18 in NWFP and only four out of 15 in Balochistan. Another 68 units are available to the corporation for sale. Out of them, 10
could not be sold in the first attempt.
The banks/DFIs have already rescheduled/restructured 173 NPAs involving an outstanding default amount of Rs28.2 billion during the last two years on the intervention of the Corporate & Industrial Restructuring Corporation. Another 170 cases with an outstanding default amount of Rs31 billion are said to be under resolution, the officials said. In total 470 NPAs are said by the officials to have either been retained by the banks and DFIs or returned to them by the corporation for settlement at their end with the defaulters.
