LAHORE: No deal has been struck between the Employees’ Old-Age Benefits Institution (EOBI) and the parties who sold land to it in over Rs40 billion scam, regarding the return of the money.

“The court had asked us -- the two parties to the dispute -- to try and reach a settlement, but no such agreement could be reached,” EOBI Law Director Latif Chaudhry told Dawn, adding, “It is now for the court to decide the matter.”

The scandal surfaced in middle of 2013. The EOBI management was primarily involved in the purchase of land at a cost higher than the market value without approval of the Board of Trustees (BoT), causing a loss of billions of rupees to the institution.

The EOBI wants complete recovery of the principal amount with mark-up - not less than 13.5 per cent - and the expenditures incurred in the deal. Most of the parties to deal are not willing to pay this ratio of mark-up and want their sold properties returned first, a pre-condition to returning the amount to the EOBI. However, all of them are looking up to the apex court for decision on the matter.

Interestingly, most of the parties are keen to get their sold land returned, believing its market value has increased. The EOBI claims that the price of only a ‘few’ properties has gone up.

The multi-billion scam has been pending in the Supreme Court for the last two-and-a-half years since it took suo motu action on the issue. The apex court is likely to take up the case early next month.

The EOBI says it did not receive even a single penny from the 18 parties involved in the scandal. Prominent among them is DHA, Islamabad, Eden Housing Limited, Vision Developers (owned by Pakistan Tahreek-i-Insaf leader Aleem Khan) and Pak Arab Housing Scheme (owned by a late PPP senator).

“The BoT has decided in principle that all parties should pay at least 13.5 per cent mark-up as they used the money for a considerable period of time,” Chaudhry said. He said the EOBI would plead before the apex court to get its full payment returned, including mark-up and transaction expenditures.

“Unfortunately despite a passage of over two-and-a-half year nothing has come in the EOBI kitty. The Eden group claimed to have deposited Rs976 million with the SC registrar account but to my knowledge the amount is not deposited. Besides, Aleem Khan’s Vision Developers had committed to pay first installment of Rs600m out of total Rs2.5b but we have not yet received the amount,” he said.

Mr Chaudhry further said the fresh evaluation carried out on the SC orders of the land sold by these parties revealed that the market price of most of the properties had not crossed 50 per cent of the price at which the EOBI had purchased from them three years ago.

When he was reminded that the price of some of the properties reasonably increased and why not the EOIB should sell them to compensate the loss, the law director said: “Since the transactions were fraudulently made, the EOBI did not set a bad precedent by keeping them.”

He said the DHA, which got Rs22 billion from EOBI by selling land to it in Islamabad and Rawalpindi, had yet to return the whole amount. “The value of the property in DHA Rawalpindi has increased but not in Islamabad where major property of the deal is located,” he added.

Similarly, the EOBI official further said the late PPP senator’s firm owed over Rs1.125 billion but it set a precondition that the land should be first returned to it and then it would pay the amount.

Clearing its position, Vision Developers’ Chief Financial Offices Imran Anwar told Dawn the firm had sold its properties at 25 per cent discount on the then market prices. Therefore, he said EOBI earned 25pc profit from the first day (of transaction). “Besides, we offered to return Rs600m when EOBI asked it wanted to return the property. However, as the matter is sub judice with the Supreme Court, we will comply with the court orders in this regard,” he told Dawn.

To a question about not agreeing to pay 13.5pc mark-up, Mr Anwar said: “The SC in one of its order stated that the mark-up rate shall be determined by it (court), therefore, we shall be paying the mar-kup at the rate which will be ordered by Supreme Court.”

A counsel for the Eden Housing said it was the first party that had paid Rs976m and it could be verified as the transaction reflected in accounts.

“We owe Rs900m. We want the EOIB to return our land and we will clear the outstanding amount,” he said, adding since it (Eden) had paid the amount soon after the transaction the mark-up amount should not be more than one to two per cent. The price of its land sold to the EOBI had increased, he said.

A source close to the former Senator’s firm said the price of its property had shot up to Rs1.79b. “We have no issue in returning Rs1.125b to EOBI provided it returns our land,” he said.

The DHA Islamabad spokesperson could not be contacted for his comment.

According to an FIA report, the then EOBI officials, including its chairman Zafar Iqbal Gondal gave “illegal benefits” to Dimen Associates and Assets Management Firms while buying commercial plots located at Mouza Sehjpal, Near DHA Phase VIII, Interchange on Ring Road, Lahore, amounting to Rs1.43b. The evaluator has determined its value at Rs2.24b.

The FIA has registered a number of cases against EOBI officials, including Zafar Gondal (chairman), Wahid Khursheed Kanwar (Investment Advisor/DG inv), Muhammad Iqbal Dawood (Employers Representative Sindh), Malik Imtiaz Mehfooz (Employers Representative Balochistan), Najmul Saqib (DG Finance & Accounts), Asif Azad (Director Investment) and (Ishaq Khusro DDG/Investment). The FIA has also registered cases against the (land) sellers.

Mr Gondal and some other officials are behind the bars while some others are on bail and absconding.

Published in Dawn, January 28th, 2016