KARACHI: An accountability court on Thursday exonerated a former director general and a director of the Lyari Development Authority of the charges of misuse of authority and unauthorised investment of LDA funds in a bank that caused Rs53.62 million losses to the national exchequer.
The then LDA DG, Agha Maqsood Abbas, and then director (finance) Abdul Ghani Jokhio were acquitted of the charges of misuse of official authority, illegal and unauthorised approval of Rs1 billion investment of the LDA’s funds in a private bank.
On Thursday, Accountability Court-III Judge Dr Sher Bano Karim pronounced her verdict, which was reserved earlier.
The judge noted that the prosecution had failed to prove its allegations against the accused persons due to lack of evidence to connect their role with the commission of the offences. Therefore, the judge acquitted them of the charges. Both had been on bail.
Judge cites lack of evidence against accused persons
NAB prosecutor Zahid Hussain Baladi argued that during the tenure of Mr Abbas as director general of the LDA, in 2008, it was decided to make profitable investment in a bank from the surplus funds of the authority. Thus, Mr Abbas under the garb of a note submitted to the then secretary/minister for the local government department by allegedly misusing his authority illegally ordered placing Rs1bn in MyBank without approval of the governing body/board of directors being competent authority to invest the funds, he added.
He further alleged that the investment was made in violation of the provision of the LDA Act, 1993, as Mr Abbas with mala fide intentions mentioned that the act was silent on the specific purpose of investment, whereas Chapter 5 of Section 34(5) clearly mentioned about the investment of the LDA’s funds.
Investment on a ‘lower’ profit rate
Mr Abbas was further accused of rolling over Rs1bn till 2011 at a lower profit rate and causing losses of Rs53.62m to the authority despite being fully aware that the National Bank of Pakistan was offering a higher profit rate on investment.
The prosecutor argued that through a letter dated Oct 9, 2008 the NBP District Council branch offered from 14.25 per cent to 15pc return on the investment with a further offer that the return rate could be increased upon approval by the NBP Regional Office, Karachi. The LDA DG office received the latter on Oct 11, 2008, which was endorsed and signed by Mr Abbas, but then ordered making investment in MyBank allegedly at a lower rate.
The prosecutor argued that co-accused Abdul Ghani Jokhio, being director (finance) in the LDA during the same tenure, was required to ensure merit and transparency in respect of all financial matters of the LDA as per the prevailing financial practices, laws, rules and regulations. But, he failed to ensure investment of the LDA funds on a higher rate of return being offered by other banks at the relevant time, and misused his authority by giving undue benefit to MyBank illegally and in an unauthorised manner by placing the huge funds, which resulted in losses to the national exchequer.
On the other hand, the defence counsel — Amir Raza Naqvi and Shabih Ishrat — for the accused denied all the allegations arguing that NAB framed their clients in the present case with mala fide intentions despite the fact they had made the investments in good faith, which earned the authority profits.
They further contended that the NBP official admitted in court that an offer of 14.25pc on the investment was made to Mr Abbas and Mr Jokhio, but the bank withdrew the same after MyBank offered 14.5pc return on investment, which they accepted as it sounded reasonable.
Denying the allegations of misuse of authority, the defence counsel argued that as no meeting of the board of directors of the LDA had been held, the then MD received approval from each board member individually; thus the authority of the BoD was not overstepped.
Thirdly, they mentioned that the invested amount was kept rolling over at a rate of 10pc return in different banks because the NBP was offering a maximum of 6.7pc profit at that time, thus not a single violation of the laws, rules and regulations had been committed by their clients. The defence counsel pleaded to the court to acquit their clients of the allegations.
Published in Dawn, March 15th, 2019