ISLAMABAD: The Employees Old Age Benefit Institute (EOBI) informed the Supreme Court on Tuesday that it intended to return properties back to sellers from whom it purchased land as investment in what was reported in media to be a dubious deal. The decision to return properties to sellers was taken at the EOBI’s Board of Trustees (BoT) meeting held in Karachi on Nov 21.

The information was shared with the Supreme Court which took up the case of the multi-billion corruption scandal in EOBI for making investment in the private sector projects without approval by its BoT.

Read: Ex-chief of EOBI arrested in Rs44bn scam

The suo motu action was taken by former Chief Justice Iftikhar Muhammad Chaudhry in June 2013.

In addition to investment in a number of housing societies a probe conducted by the Federal Investigation Agency (FIA) had suggested that a major investment by EOBI was made during the period when former EOBI chairman Zafar Iqbal Gondal was the head of the institution in two different DHA schemes.

The first deal involved the purchase of 321 kanals of land in the DHA, Islamabad, on Jan 19, 2012, worth Rs15.473 billion and the second deal of Rs6.82 billion was made in March 15, 2013, to buy 23 commercial plots of eight marlas each, 12 residential plots of two kanals each and 162 defence villas of three bedrooms and 29 defence villas of five bedrooms in the Sector F, Phase-I of the DHA, Rawalpindi.

At the last hearing on Oct 30, the Supreme Court had ordered EOBI chairman Saleh Ahmed Farooqi to make up his mind whether his organisation wanted to retain the property or intended to return these back to sellers in lieu of the actual amount paid by the EOBI to them.

Also read: EOBI scam case: Pre-audit system restored, says chairman

Advocate Hafiq S.A. Rehman representing the EOBI submitted a report in the Supreme Court on Tuesday stating that the Nov 21 meeting of the BoT had endorsed an earlier decision taken at a similar meeting on April 18.

The BoT had decided, the report said, to return properties to the sellers and take back the same actual amount it paid while purchasing the land as well as the mark-up determined from the date of the release of payments by the EOBI to the date of receipt of the same from sellers.

The sellers also have to pay the mark-up on the payment made to them by the EOBI because they had utilised the money to their financial benefit whereas the EOBI had suffered an opportunity loss.

The BoT has decided to request the Supreme Court to order the federal, provincial and local governments to refund the transaction cost paid by the EOBI while purchasing land by treating the EOBI transaction as a hardship case to minimise the loss suffered by the EOBI fund which is meant for the benefit of poor pensioners.

The BoT has also decided to request the court to decide about the fate of the miscellaneous charges claimed by the EOBI in respect of properties on account of different expenses like salary, maintaining security guards, maintenance of properties and expenses on project planning etc.

This proposition has been developed by the EOBI in view of the fact that since the sellers were allegedly a party to the illegal, non-transparent negotiated deals in violation of rules or regulations, therefore, they must make up the loss suffered by the EOBI.

Whatever decision is reached by the Supreme Court would be acceptable to the EOBI, the report said.

The board also deplored the mala fide intention behind these illegal transactions which were made on exorbitant rates in an unlawful manner and said the retention of these properties would defeat the cause of justice and fair play and, therefore, it was asking for the return of investments, the report said.

Published in Dawn, December 3rd, 2014