ISLAMABAD: The chief of the Employees Old Age Benefit Institution (EOBI) on Tuesday said the institution will not be able to meet its expenses and will be short of money for beneficiaries by 2027 due to depletion of resources in the last few years.

During a presentation to the Public Accounts Committee (PAC), EOBI Chairman Sualeh Faruqui said the institution had invested in Rs1.44 billion in the DHA Phase II extension in 2005 and had purchased 400 plots at exorbitant rates. However, the institution has not been given possession of these plots as the area has not been developed yet.

The other “futile” investment was made during the year 2012-13 when the institution bought 18 sets of properties for Rs32 billion. These included commercial and residential units in DHA Phase I and II in Islamabad and in some private housing societies including the River Edge Housing Authority which is owned by PTI leader Aleem Khan and Eden Garden Housing Society which is owned by a relative of former chief justice Iftikhar Mohammad Chaudhry.


Bad investments will mean shortage of money for beneficiaries, EOBI chief tells PAC


According to Mr Faruqui, the EOBI board of trustees had declared the decision to invest in the stated properties illegal and void ab initio, which means “to be treated as invalid from the outset”.

Established on April 1, 1976 the objective of the EOBI was to ensure those who are insured with them or their heirs are given pensions or social insurance in case of death or disability.

It invested billions of rupees in suspect deals without mandatory approval of its board of trustees.

In 2013, the Supreme Court had taken suo motu notice of the purchases made during 2012-13 while the purchases made in 2005 were not taken up.

The properties were purchased at higher than the market price, which cost the institutions billions of rupees.

“The market value of these properties is still less than that for which the EOBI management purchased it,” Mr Faruqui said, adding that there has only been a slight increase in the EOBI land in DHA Phase I and two properties in Lahore.

Mr Faruqui said the institution had invested in these properties in order to generate revenue and that the majority of plots in the housing societies were yet to be developed.

“The previous management paid a full price for undeveloped plots which was in violation of the rules and was against the interests of EOBI,” he said.

Chief executive of the Pakistan Real Estate Investment and Management Company (Primaco) which is a subsidiary of the EOBI, retired Brigadier Amjad Ali said the 400 plots that the EOBI had purchased on October 3, 2005 were in hard-to-reach waste land and that the land was a joint venture of the DHA, Bahria Town and Habib Rafiq (Private) Limited.

According to Mr Ali, the price of land in the said area has slightly increased after a bridge was constructed and the land was connected to the main road six months ago.

The PAC was told that the EOBI had terminated the services of over 300 employees who had been inducted in violation of the rules during the previous government and the EOBI chairman said the sacked employees had not returned their official vehicles. He added that the cars had been purchased for Rs480 million and that efforts were being made to retrieve them

He said that the former EOBI chairman, Zafar Gondal is in jail in connection with an EOBI corruption case while his co-accused has obtained bail. He added that a trail for that case is underway.

Published in Dawn, August 31st, 2016

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