LAHORE, Jan 29: In the re-probed reference on the Islamabad New City scam, a housing project conceived during the PPP government in 1996, an accountability court on Tuesday summoned Aftab Ahmed Sherpao, former NWFP chief minister, already under custody, and issued bailable warrants of two accused, Tahir Khan Niazi and Muhammad Niaz Ali.

It has been disclosed in re-investigated reference that two important politicians, Haji Nawaz Khokhar, the then deputy speaker of the National Assembly, and Aftab Ahmed Sherpao had a share of the pie and had obtained “pecuniary benefit” from Rs209.533 million embezzlement.

The court headed by Munir Ahmad Sheikh also took notice of the absence of Muhammad Zaheer Khan, one of the accused. The court was informed that Khan, former chairman of the State Life Corporation of Pakistan, was indisposed. The court sought his medical report in the next hearing on Feb 18. The nine persons alleged to have misappropriated the amount include Muhammad Zaheer Khan, Iqbal Ahmad, former director-general, National Housing Authority, Zahid Shafiq Khan, managing director, M G Realtors, Tahir Sarfaraz Khan Niazi director, M G Realtors, Syed Sultan Ali Shah (late), Syed Usman Ali Shah, son of Syed Sultan Ali Shah, Haji Nawaz Khokhar, Aftab Ahmad Sherpao and Muhammad Niaz Ali Khan.

The NAB probe revealed that a joint venture was floated by M/s Hertz International (Pvt) Ltd in collaboration with the National Housing Authority.

The Hertz International was re-named as M G Realtors (Pvt) Ltd which planned a huge housing project in the name of Islamabad New City over 2,500 acres of land to create 20,000 kanals of land.

According to the agreement, 100 per cent financing was to be made by M G Realtors - 50 per cent as land and 50 per cent as bank borrowings. The board of the directors of the firm included five persons, two of NHA and three of M G Realtors. The DG, NHA (Iqbal Ahmad) was made chairman and Zahid Shafiq Khan managing director of the joint venture.

The New City planners then signed an agreement with the State Life Corporation of Pakistan (SLCP) which had shown interest to purchase 1,000 plots at a settled price of 628.666 million. It was also agreed that State Life would pay the first instalment of Rs 104.766 million within 30 days of the signing of the agreement.

It made good the first instalment on 3.7.1996 while the second one was to be paid after the inspection report of the project but the State Life chief paid the second instalment of an equal amount of Rs 628.666 million on 16.10.1996 in violation of the agreement. The amounts were duly received by DG, NHA, and deposited with the account of the New City project.

The investigation revealed that the whole amount was then transferred to a private joint account operated by Tahir Khan Niazi and Syed Sultan Ali Shah. From this account the whole amount was misappropriated.

The NAB also probed how the amount was distributed. The State Life chief, in order to justify existence of demand for 1,000 plots, had manoeuvred a letter from Dr Arif K Qazi, chief executive of the RDFC, for booking 170 plots quite before the signing of the agreement with the New City project managers.

Dr Arif K Qazi, it was revealed, was no other person than his real brother. In return for his connivance, the probe revealed, Zaheer Khan had received “without consideration” a bungalow measuring 16 kanals at Jhangi Syedan, Abbotabad.

The bungalow, it was assessed valued Rs 25 million.

According to the probe, the bungalow had been transferred as a motive or reward for making dishonest investment in the New City Project.

The investigation also revealed that Haji Nawaz Khokhar had obtained pecuniary benefit of Rs 10 million and Aftab Ahmad Khan Sherpao had received US $ 116,823 from the misappropriated fund.

The amount allegedly received by Haji Nawaz Khokhar was transferred to his bank account on 29.9.1996 and it was withdrawn by the accused through cheques the same year.

Sherpao’s amount was transferred to his foreign account No 1330720 in Gindlay’s Private Banking branch at 13 St James Square, London, on 13.11.1996.

Tahir Khan Niazi, who received the chunk of the misappropriated amount totalling Rs 139.533 million, withdrew it in instalments. He got Rs 107.033 million converted through Dr Muhammad Naeem Niazi into US dollars 2,500,000 for its transfer to London via Citibank.

Out of it, Niazi got $1 million transferred to his account in Citibank, Singapore. The balance was withdrawn and utilized.

The other main beneficiary of the embezzlement amount, Sultan Ali Shah, who is dead now, received Rs 60 million in four transfers. The NAB has implicated his son Usman Ali Shah who happens to be the ultimate beneficiary.

The reference was probed by FIA assistant Director Shaukat Mahmood and it was signed by former NAB chairman Khalid Maqbool on Oct 24 last.—APP