“Salman Siddique as one of the two directors of the bank approved the unlawful credit proposals amounting to Rs1,175 million in July 2006 on behalf of the board (board of directors of the BoP),” the report prepared by Additional Inspector General Aftab Sultan said. — File Photo

ISLAMABAD: A voluminous report submitted to the Supreme Court by the Punjab government on the Rs9 billion Bank of Punjab (BoP) loan scam has accused Federal Board of Revenue (FBR) Chairman Salman Siddique of approving, in a casual manner, unlawful credit proposals of Rs1.1 billion in July 2006.

On June 18 last year, the Supreme Court had appointed Aftab Sultan as head of a team set up to look into irregularities in the bank because the court was not satisfied with investigations conducted by the National Accountability Bureau (NAB).

At the last hearing Chief Justice Iftikhar Mohammad Chaudhry had observed that irregularities of another Rs17 billion had been detected but the court was determined to recover the looted money.

The chief justice had observed that the report compiled by the investigation team had pointed the finger at many influential people.

On Thursday, the case was fixed before a three-judge bench headed by the chief justice.

The report alleged that as director Mr Siddique had signed a proposal for enhancing credit limits of the older accounts of Sheikh Mohammad Afzal, the principal accused in the scam, to adjust the liability of his string of fake accounts. The other director who also signed the proposal was Shahzad Ali Malik.

Sheikh Afzal who was arrested in Malaysia with the help of Interpol last year and brought to Pakistan had confessed to having bought a whole lot of 'worthy' people to enable him to get out of the country although his name was on the Exit Control List (ECL).

He alleged that he had paid over Rs50 million to Law Minister Babar Awan, Rs10 million to former adviser Shairfuddin Pirzada, Rs20 million to former attorney general Malik Mohammad Qayyum and Rs7.5 million to Ali Waseem, son of Senator Waseem Sajjad, to win a court verdict in his favour.

The report regretted that millions of rupees had been doled out from the BoP to non-existent clients (Haris Group), the main beneficiary of the scam and one of the petitioners, against negligible securities, rather without any collateral.

It had now been conclusively established, the report said, that the properties which were placed as security with the bank were heavily over-valued. Such over-valuations were the result of manipulation with the active connivance of the valuators, it said.

Despite the fact of having no businesses, the Haris Group opened accounts in the BoP by using fake identities and documents, while funds were sanctioned to them at their discretion.

It appeared that the bank had little say in the matter, the report said, adding that in more than 95 per cent cases the sanctioned funds were withdrawn within a day after approval.