ISLAMABAD: The Lahore High Court informed the Supreme Court on Friday that a reference against former prime minister Benazir Bhutto’s decision to increase secret service funds of the Intelligence Bureau (IB) and then withdraw it, between 1988 and 1990, had been rejected by one of its benches in 1994.

The information was provided by the LHC registrar in an envelope which was opened in the court.

“The registrar of the LHC has submitted a report stating therein that a reference No 11 of 1990 entitled president versus Ms Benazir Bhutto was heard but since it had no force the same was rejected on March 27, 1994,” the Supreme Court said in its order.

A three-judge bench headed by Chief Justice Iftikhar Muhammad Chaudhry had taken notice of a report in an English daily alleging that Rs360m had been withdrawn by the PPP government in 1988-90 to buy loyalty of parliamentarians to offset a no-confidence motion against the government, win elections in Azad Kashmir and remove the government in the then NWFP and install Aftab Sherpao as chief minister.

At the SC hearing on Wednesday, former IB chief Masood Sharif Khan Khattak submitted a nine-page statement in which he claimed that he had appeared before the LHC as a prosecution witness in the secret service fund reference sent by an accountability cell in the Presidency on the orders of then president Ghulam Ishaq Khan. But he said he was not aware of the outcome of the reference.

The cell was set up after the dismissal of the first government of Ms Bhutto on August 5, 1990. It was manned by bureaucrat Roedad Khan either as its head or someone with authority, he added.

Mr Khattak alleged that the reference was based on exactly the same documents and the amount was the same as published by the newspaper.

He said the LHC had heard the case in 1991-92 and he had submitted details about the use of funds which the news report had rediscovered after a lapse of 21 long years in which the country had passed through so much turmoil, tribulation and hard times.

“Since I was a prosecution witness and my statement was something that demolished the case, Benazir Bhutto was not unjustifiably disqualified,” Mr Khattak said, adding that the sole purpose of filing the reference was to disqualify Benazir Bhutto and throw her out of politics.

He said the amount and documents quoted by the newspaper had come under the scrutiny of the high court after which the case was never heard despite the fact that president Ishaq Khan, backed by former army chief Gen (retd) Mirza Aslam Beg, wanted to get Ms Bhutto disqualified and removed from politics forever.

At the last hearing, the Supreme Court had directed its office to approach the LHC registrar to ascertain the veracity of Mr Khattak’s statement.

Meanwhile, another former IB chief, Tariq A. Lodhi, during whose tenure Rs270 million was allegedly withdrawn by the present PPP government to dislodge the Punjab government in 2008-09, submitted a reply but claimed it to be privileged.

The court ordered its office to keep Mr Lodhi’s documents in sealed cover. It asked Attorney General Irfan Qadir to submit a reply on behalf of the incumbent IB director general and attend the next hearing on Feb 26.

Mr Lodhi was not required to attend the proceedings, but he could be called if needed, the court said in its order.