KARACHI: A former president of the National Bank of Pakistan (NBP), Ali Raza, and four others were arrested on Friday, minutes after the Sindh High Court revoked their protective pre-arrest bail in a Rs18.5 billion fraud case in the bank’s Bangladesh operations.
As soon as a two-judge bench, headed by Chief Justice Ahmed Ali M. Sheikh, cancelled their pre-arrest bail after hearing the submissions of the National Accountability Bureau’s prosecutor, Mr Raza and the four others — Talha Yaqoob, Zubair Ahmed, Mirza Abrar Baig and Waseem Khan — were taken into custody by NAB when he stepped out of the courtroom.
He was moved to an undisclosed location and NAB officials said that all the held suspects would be produced before an accountability court for obtaining their further custody for interrogation and investigation.
Defence attorneys, appearing for Mr Raza and others, said that an appeal would soon be filed in the Supreme Court against the bail cancellation order of the SHC.
Last year, NAB had initiated investigations into the conduct of some officers of the NBP who were accused of abusing their powers in the processing and sanctioning of credit limits, wilfully avoiding proper valuation of securities offered by borrowers and causing losses to the national exchequer.
The inquiry found out that the bank’s Bangladesh branch extended loans amounting to $185 million to questionable companies without collateral between 2003 and 2012. This meant that the bank was unable to seize the pledged property or any other asset of a client when it failed to repay the loan.
As a result, non-performing loans started piling up. The bank’s head office received as many as 19 ‘triggers’ during the period about growing problems on the loan book of the Bangladesh branch. Yet the bank’s senior management did not take any action, as per a forensic audit report prepared by audit firm KPMG.
On Friday, the NAB prosecutor informed the SHC bench that the suspects had caused a loss of billions of rupees to the national exchequer through their corrupt practices in the NBP Bangladesh operations.
He said that irregularities were revealed in the audit report of 2009 and a former governor of the State Bank of Pakistan had also complained regarding the malpractices committed by NBP officials.
The prosecutor informed the judges that Mr Raza was not only the president at the time of offences but also the chairman of the board of directors, audit committee chief and human resource department head.
Besides, he said, the former NBP chief and other officials, including some Bangladeshi citizens, were also involved in the scam.
The court ordered the arrest of Mr Raza and four others in the case. However, it upheld the pre-arrest bails of another former NBP president Qamar Hussain and Kausar Malik.
It was alleged by NAB that the Bangladesh branch of the NBP lent $185m without securing collaterals to dubious companies between 2003 and 2012.
A National Assembly standing committee, headed by Omar Ayub Khan of the PML-N, referred the matter to NAB for further probe.
The bureau said that one of the inquiries conducted by a chartered accountant firm had found that “61 delinquent employees” were prima facie involved in the scam. It said that many of them were directly responsible and some were responsible due to their administrative positions.
Published in Dawn, September 23rd, 2017