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October 20, 2012

IHC declares appointment of HBFC chairman illegal

 
October 20, 2012

ISLAMABAD: Deciding a petition filed by House Building Finance Corporation (HBFC) workers union, Justice Muhammad Azim Khan Afridi of Islamabad High Court (IHC) on Friday directed the government to investigate as to how a foreign national, Azhar Abbas Jaffery, was appointed as managing director (MD) of the state-owned financial institution.
The IHC judge also declared the appointment of MD HBFC as illegal and directed to recover the salaries and other privileges paid to him during his tenure in the office. The petitioner, HBFC workers union, through the petition sought removal of the MD who was a Singapore national.
The court reserved its judgment on Tuesday that was announced on Friday.Justice Afridi directed the federal government to conduct an inquiry against the officials of Ministry of Finance, State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP) for their negligence in following the criteria while appointing a foreign national as MD HBFC.
The court in its decision observed that under section 11-A of Banks (Nationalisation) Act 1974, only Pakistani national could be appointed as CEO/MD of national financial institutions.
Counsel for the petitioner, Hashmat Habib advocate, told the court that the federal government appointed Mr Jaffery as MD HBFC for a 3-year term in Jan 5, 2009. His term expired on March 2012 and then he himself extended his contract without approval from the board of directors.
Mr Hashmat further argued that under article 90 of HBFC service rules, the MD could not extend the contract of his service on his own and was liable to leave the office after expiry of his contract.
The counsel said that Mr Jaffrey did not appear before the court after receiving court notices and left the country. He also formed a five-member committee to run the HBFC affairs. The petitioner had prayed to the court to declare the extension of MD HBFC illegal and recover the salaries and other privileges from

him.

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