ISLAMABAD: The Federal Investigation Agency (FIA) discovered that the Evacuee Trust Property Board (ETPB) had failed to safeguard its interest by investing in a real estate business of the Defence Housing Authority (DHA) in Lahore, and ended up with a staggering loss of Rs1.9 billion in the business.

The information came through an inquiry submitted by FIA Additional Director General (Legal) Muhammad Azam before the Supreme Court on Tuesday during proceedings of a case initiated on a complaint filed by Sardar Mastan Singh, President of the Pakistan Sikh Council, who is based in the Sikh holy place of Nankana Sahib.

Chief Justice Iftikhar Muhammad Chaudhry, who was heading a three-judge bench, reiterated that the court was under a constitutional obligation to safeguard interests of the minority community.

Surprisingly, all transactions and deals between the ETPB and the DHA were executed during the period when ETPB chairman Asif Hashmi was in charge. Asif Hashmi was appointed by the previous PPP government and is now believed to be staying in the UAE.

On Feb 6, the Supreme Court had imposed a ban on the DHA Lahore from altering Sikh properties in its possession in any way. Advocate Hafiz S. A. Rehman appeared on behalf of the ETPB, Advocate Shahram Sarwar represented the Sikh community while the DHA Lahore was represented by Advocate Asim Hafeez.

During proceedings of the case, the Supreme Court dropped hints it may order the FIA to register criminal cases and proceed against those responsible for causing a huge loss to the ETPB or order the DHA to return all lands it had acquired from the ETPB, though Asif Hashmi will still be facing consequences for the deal.

An inquiry report submitted by Additional Director General (Legal) Muhammad Azam before the Supreme Court suggested that originally the ETPB owned 1152 kanals and 15 marlas of land at the Village Lidher, 2862 kanals at Motasinghwala and 244 kanals and 15 marlas at Dera Chahal in Tehsil Lahore Cantt.

The total ETPB land situated at Mouza Lidhar and Motasinghwala and transferred to the DHA, Lahore, comes to 843 kanals and 15 marlas against 25 per cent exemption plots files. Twenty-five per cent exemption plots means that the ETBP will get 25 per cent of plots in exchange after the lands were developed for the housing society by the DHA.

But 244 kanala and 15 marlas of land at Dera Chahal could not be transferred to DHA due to protest by the Sikh community because the land belongs to Gurdwara Bebe Nanki.

Though the June 9, 2006, agreement between the ETPB and DHA could not be executed and the exchange/transfer of the lands was stopped because of the public hue and cry, the actual agreement was not cancelled. This led to a liability of Rs18.8 million on ETPB for expenditures incurred by the DHA Lahore for vacation of these lands from land grabbers/occupants.

The Ministry of Minorities approved an ambiguous ETPB board resolution on April 28, 2009, for acquisition of ETPB lands by the DHA, Lahore Cantt, against 25 per cent exemption plot files without considering an earlier offer by DHA extended on July 20, 2007, to acquire lands against 33 per cent exemption plot files.

The FIA report also suggested that the DHA paid compensation of ETPB lands at Mauza Lidher and Motasinghwala to unauthorised men to the tune of Rs657 million (Rs126 million in cash and 59 plots of one kanal each) without justification when beneficiaries do not exist in the list of legitimate lessees of ETPB.

“Therefore distinct possibility could not be ruled out of having receipt commission/kickbacks by DHA and ETPB and officials of the ministry concerned through these beneficiaries,” the FIA report alleged.

In some cases DHA Lahore paid compensation to land grabbers prior to the execution of the agreement between DHA Lahore and ETPB whereas Rs22.3 million was paid through cash showing mala fide on part of the ETPB and DHA Lahore.

The FIA report said that it discovered massive irregularities in spending of ETPB funds due to non-observance of procedural formalities as envisioned in the Pak-PWD Code and Management and Disposal of Urban Evacuee Trust Properties 1977. The proceedings will again be taken up by the court on Thursday.