UPDATE: The National Accountability Bureau (NAB) did not consider Arif Baigmohamed to be a party in the IIBL case. Mr Baigmohamed never acted as a Director of the IIBL and has not transacted any business with the bank or on its behalf.
ISLAMABAD, June 2: The Supreme Court on Thursday directed the National Accountability Bureau (NAB) to register a corruption reference against the head of the Islamic Investment Bank Ltd (IIBL), and former registrar of the apex court and 12 other people for their involvement in a financial scam of Rs634 million.
The accused were taken into custody within the court premises after the end of their in-camera hearing here on Thursday. Later, Supreme Court Registrar Budha Khan and the Islamabad police handed them over to the NAB.
The detained are: Javed Iqbal Qureshi, IIBL chief operating officer; former registrar Muhammad Amin Farooqi for being privy and party to the embezzlement of government funds; former and present chairmen and directors Muhammad Nadeem Anwar, Bashir Ahmed Khan, Arshad Wadud Khan, Zamiruddin Sabri, Sajid Mumtaz Khan and Arif Baigmohamed; major shareholders Munawar Ali Fecto (also a majority shareholder of 23 per cent in the IIBL), Qaiser Mahmood Fecto, Syed Sanobar Hussain, Haji Saifullah Khan Bangash, Shaukatullah Khan Bangash and Zubairullah Khan Bangash.
“We will proceed in compliance with the SC orders,” Prosecutor-General NAB Irfan Qadir told Dawn. He said the NAB would further investigate to determine the role of each individual involved in the scam. More arrests were likely, he said.
A four-page order of Chief Justice of Pakistan Justice Nazim Hussain Siddiqui said: “I have perused the inquiry report of Justice Iftikhar Muhammad Chaudhry, the facts and circumstances of which constitute offence of corruption defined in Section 9 of NAB Ordinance 2002.”
The court also directed the NAB to keep it abreast of the progress on the case by sending weekly reports.
In his order, the chief justice also censured the working of the Security Exchange Commission of Pakistan (SECP), observing: “Had the commission taken timely notice of the gravity of the situation and acted promptly under Part VIIIA of the Companies Ordinance 1984, relating to non-banking finance companies, the interest of the public could have been safeguarded.”
The court also directed the SECP to take immediate action against the IIBL and noted that the regulatory control of all non-banking finance companies, including the IIBL, was transferred to the commission on Dec 12, 2002. Except for a show-cause notice served on the IIBL on April 23, 2004, regarding appointment of administrator, no meaningful action was initiated, though IIBL affairs called for immediate action in public interest.
The court inquiry was initiated after failing to recover a bank guarantee of Rs493 million, which added up to Rs634 million after mark-up. The amount is to be refunded to the Central Board of Revenue (CBR) after the Supreme Court rejected a contempt of the court case of Fecto Belarus Tractors Limited.
A highly-placed source told Dawn that this was for the first time in the history of Pakistan that the federal government had been asked to deposit a Rs493 million security before the Supreme Court in a case.
Sufficient time was granted to the accused during the inquiry to deposit the amount, but they avoided on one pretext or the other. However, during the preliminary inquiry, the IIBL and Munawar Ali Fecto paid a total of Rs37 million. The balance of Rs596 million remained to be recovered, the order said.
Nadeem Anwar, also a member of the Board of Directors of the Pakistan Telecommunication Company Limited, who started his career as a manager in a foreign bank, has been held responsible by the SC for siphoning off Rs422 million in connivance with Shaukatullah Khan Bangash and Haji Saifullah Khan Bangash.