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Another dubious EOBI deal surfaces

July 10, 2012


ISLAMABAD, July 9: A new scam has hit the Employees Old-age Benefits Institution (EOBI) which is already facing investigation into bad or illegal investment of huge funds belonging to private sector employees.

The latest scam relates to the purchase of two plots measuring 40 kanals in Sukkur for Rs120 million. According to inside sources, the EOBI allegedly paid the money to only one person, although the property was owned by three people. The deal was allegedly struck without seeking an approval by the institution’s board of trustees.

The assistant manger of a real estate involved in the deal wrote on Dec 13 last year a letter seeking the EOBI chairman’s approval and the final deed was signed on March 3 this year. During this period objections were raised over legality of the deed, but these were rejected citing the chairman’s approval.

For unsolicited reasons attorney was taken from two other owners and the cheque was issued to one Muhammad Yaqub Amin reportedly related to an influential personality.

This was done against the advice of director law who said on Feb 24, 2012: “Payments in respect of sale, consideration must be made in the name of respective owners. For example, the plot number 4 is in the ownership of three sellers and, therefore, payment must be made in their names. Plot number 8 is in the name of a single owner and, therefore, the payment must be made in the name of the respective owner.”

The sources confided to Dawn that there was neither any commercial utility of the land nor a proper evaluation was done before the purchase leading to suspicions that the payment made was far more than the real price, apparently to benefit certain people.

Another interesting aspect of the deal, the sources said, was that an investment committee had been carved under the orders of the EOBI chairman ignoring the rule that no purchases could be made without approval of the board of trustees. The board’s rule suggests that no property/assets can be purchased from a private party but it has been violated in the deal.

The sources alleged that the EOBI had so far invested more than 12.5 per cent amount allowed under rules. When contacted, EOBI’s adviser Mr Qamar rejected the allegation and said it was impossible for the institution to make any investment above the limit. He also expressed his ignorance about the land purchase deal or whether it was of any benefit to the institution, but admitted that properties had been purchased at a number of places across the country.

He did not agree with a suggestion that the board of trustee’s prior permission was necessary for each and every investment.

The institution, whose basic function is to collect contributions made by employers/employees of private organisations and distribute them among registered workers on gaining old-age, is paying paltry Rs3,600 per month to around 500,000 pensioners across the country.

It may be mentioned that the EOBI has been devolved to the provinces under the 18th Amendment, but its physical handing over could not take place apparently because of huge amounts owned by it. The institution is currently under the human resource development ministry headed by Chaudhry Wajahat Hussain.