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| May 14, 2006 | Sunday | Rabi-us-Sani 15, 1427 |
PAC unearths Rs225m investment scam
ISLAMABAD, May 13: A general manager of the House Building Finance Corporation (HBFC) invested Rs225million on behalf of the HBFC in the Bankers Equity Limited (BEL) in 1998-99 after violating the rules of the ministry of finance and bypassing the Board of Directors (BoD).
Documents of the Auditor General of Pakistan reveal that the then managing director of the HBFC made the investment on his own despite the fact that BEL had been privatized in June 1996.
The amount had not been recovered despite the fact that the BEL had been liquidated and taken over by the State Bank of Pakistan (SBP).
The corporation made Rs0.9 million to Rs60 million investment in BEL at different times for maturity periods of three months to five years and at profit varying between 13.5 per cent and 16 per cent. An investment of Rs200 million was made on August 6, 1996 at the profit rate of 15.25 per cent for three years up to August 6, 1999.
Another Rs25 million was invested without the approval of the board of directors on February 19, 1998 at a return rate of 15.25 per cent for three years up to May 19, 1998. The PAC being headed by chairman, Malik Allahyar Khan, has asked the finance ministry to explain its position.
The MD had allegedly accepted millions of rupees kick backs and commissions for investing public money after bypassing all the rules and BoD.
The ministry had admitted that the MD had trampled all the rules while investing in unauthorised brands. However, it was of the view that it could not prevent such individuals at the time of committing such financial misappropriations as the ministry dealt with the issues pointed out during auditing.
“This amount should have been recovered by 2000. The ministry has the PAC at least five years late with no hopes of recovering the amount. Why investigations are conducted when the ministry knows it cannot recover a single penny from a single individual,” the PAC has observed.
LOAN: The documents show that in 1991, the HBFC zonal office in Hyderabad sanctioned and disbursed irregular loans of Rs36.28millions in six different colonies of Nawab Shah against open plots on the basis of bogus documents and false inspection reports. A routine in-house investigation was conducted which found 17 officials of the corporation involved in the scam. All the officials were served with charge sheets and a number of them were found guilty and fired from services. The case at present is being investigated by the Federal Investigation Agency (FIA).
However, the management has only recovered Rs190,000 during the last 15 years, that is 3 per cent of the total outstanding amount which has by now reached Rs51.096million.
MILLS: The documents reveal that National Development Finance Corporation (NDFC) sanctioned various types of loans involving Rs410million to M/s Zahoor Textile Mills from June to October 2000. The loans were sanctioned and disbursed without fulfilment of legal requirements and without obtaining proper security.
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