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Hiring of HBFC chief declared illegal

October 19, 2012

ISLAMABAD, Oct 19: Justice Mohammad Azim Khan Afridi of Islamabad High Court (IHC) on Friday declared the appointment of the managing director House Building Finance Corporation (HBFC) as illegal and directed that salaries and other privileges paid to him during his term in office be recovered.

The court had on Tuesday reserved judgment on the petition of HBFC workmen union seeking removal of their managing director Azhar Abbas Jaffery, who is a Singapore national.

The court also directed the relevant authorities to investigate the matter as to how a foreign national was appointed as head of the state-run loan provider.

Justice Afridi directed the federal government to conduct an inquiry against those officials of the ministry of finance, State Bank and the Securities and Exchange Commission of Pakistan whose negligence had resulted in the appointment of an ineligible person as the chief of the HBFC.

The judge observed that under section 11-A of Banks (Nationalisation) Act 1974, only a Pakistani national could be appointed as CEO/MD of national financial institutions.

Hashmat Habib, the petitioner’s counsel, told the court that according to the National Database and Registration Authority (NAdra) record, Mr Jaffery had surrendered his Pakistani nationality in 2006 to become a Singapore national. He said Mr Jaffery’s travel documents also showed him as a foreigner.

He said Mr Jaffery was appointed as the HBFC chief by the federal government on January 5, 2009, for a three-year term. The counsel said two months after the expiry of his term in January this year Mr Jaffery extended his contract on his own and did not bother to seek approval from the board of directors or the competent authority.

He pointed out that under article 90 of the HBFC service rules, the MD could not extend the contract of his service on his own and should quit the post soon after the expiry of his contract. He alleged that Mr Jaffery was running the affairs of the corporation as his personal office.

Advocate Habib said after receiving the court notice, Mr Jaffery went abroad and constituted a five-member committee to run the HBFC in his absence.

Standing counsel for the federation Shabbir Abbasi, representing the ministry of finance, told the court that Mr Jaffery resumed the charge of MD HBFC without waiting for the completion of the process by the ministry.