ISLAMABAD: The Bank of Punjab (BoP) has become a party in the ongoing litigation over the Grand Hyatt scam case in the Islamabad High Court (IHC) as its Rs2 billion investment in the project is jeopardised.
In 2005, the CDA auctioned a 13.5 acre plot to M/S BNP for Rs4.9 billion and its board handed over the possession of the plot to the buyer the same year after receiving only 15pc of the total sum.
The BNP mortgaged the land to the BoP against a Rs7 billion loan but took Rs2.10 billion from the bank. On November 18, 2013, the chief executive officer of the BNP wrote a letter to the BoP offering 7,963 square-yard commercial space to the bank to settle the loan.
In the letter, the CEO, Abdul Hafeez Pasha, stated that the project included a five-star hotel, residential apartments and a shopping mall. The BoP was offered the “most premium floor of the mall which is planned to house a supermarket (Hyper Star), banks and high-end brand stores.”
Seeks return of Rs2bn loan taken by builder after CDA cancelled lease of land on which the five-star hotel was to be constructed
But contrary to the assurance, the BNP was not in a position to construct the shopping mall in the leased out premises.
Before leasing the plot, the CDA in a request to the interior ministry in April 2004 seeking approval had stated that the plot would be disposed of for five-star hotel-cum-conference centre (without shopping mall). Later, however, the CDA allowed the BNP to construct the shopping mall.
The civic agency in July last year cancelled the lease to the BNP and the latter filed a petition in the IHC.
Justice Athar Minallah of the IHC in March this year upheld the CDA decision against which the BNP filed an intra-court appeal.
In the judgment, Justice Minallah observed: “It is a reflection of how the (CDA) officials have been bending over backwards by extending undue benefits to the petitioner/company in complete disregard of the mandatory regulations, thus causing loss to the exchequer on the one hand and enabling the petitioner/company to defraud and deceive members of the general public on the other.”
The judgment said the case had brought to surface the most conspicuous example of undermining the rule of law by one of the most important regulatory authorities established under the 1960 ordinance.
The BoP became an appellant in the Grand Hyatt case as it filed an appeal requesting the court to direct both the CDA and the BNP to return its amount.
The court heard the preliminary arguments and issued notices to the civic agency and the builder last week.
Besides the BoP, some 240 buyers of residential apartments in the project have become affected by the CDA decision. The civic agency estimated that the builders sold the apartments for around Rs6 billion to the buyers.
The affected buyers included PTI Chairman Imran Khan, Governor State Bank of Pakistan Mohammad Ashraf Wathra, Pemra Chairman Absar Alam, former Chief Justice of Pakistan Nasirul Mulk, ex-chief justice Lahore High Court Iftikhar Hussain Chaudhry, Minister Jam Kamal Khan, former naval chief Mohammad Asif Sandila, former foreign secretary Salman Bashir and retired Lt Gen Ahsan Azhar Hayat.
Some 22 appeals have been filed in the IHC against the order of Justice Minallah, and the matter is pending adjudication before a two-member division bench, comprising Justice Aamer Farooq and Justice Minagul Hassan Aurangzeb.
Published in Dawn, May 2nd, 2017
