ISLAMABAD: Mian Nawaz Sharif surrendered his family’s industrial units — the Ittefaq Foundries, Brothers Steel, Ittefaq Brothers and Ilyas Enterprises — on June 30, 1998, to nine financial institutions against outstanding loans of Rs3 billion. But the banks did not get a single penny as through a tactical move some shareholder of the Ittefaq Group challenged the sale of these units and the court held the sale of these units and the stay order is still effective.
Then Prime Minister Mian Nawaz Sharif in an emotional speech on national television, announced surrendering the assets of the Ittefaq Group to the Lahore High Court to monitor the sale of these units to settle the loans. The Sharif family was highly appreciated on this move but in real terms the loan of Rs3 billion against them remains outstanding despite the passage of 15 years.
Sources in a financial institution, which owed the loan, disclosed that the Sharif family is now insisting on agreeing on the actual amount of the loan instead of interest on it that has accumulated over the last 15 years.
While the value of the assets is more than the double of what it was in June 1998, they argued if they accept Sharif family’s offer they have to pay more than the actual amount back to the Sharif family.
The banks and Sharifs entered into an agreement for handing and taking over of the assets but one of the directors took the plea that he is also one of the owners of these units and the sale of three units is a violation of Section 284 of the Companies Ordinance. The challenger was Mian Meraj Din, a shareholder in the Ittefaq Group and Nawaz Sharif’s uncle. On his petition, the court held the auction.
The then opposition had alleged that the move by Mian Meraj Din was preplanned but the Sharif family denied this allegation
The consortium of financial institutions including National Bank of Pakistan, Habib Bank Ltd, Muslim Commercial Bank, United Bank Ltd, Zarai Taraqiati Bank of Pakistan, Picic Bank, First Punjab Modaraba and Corporate Law Authority filed a petition in the Lahore High Court for winding up of three units of the Ittefaq Group in order to recover about Rs3 billion loans. These petitioners sought an order for the recovery of their loan through auction of assets of the group as they had failed to fulfill their financial commitments.
In July 1998, for the determination of the liabilities towards the Sharifs, the LHC constituted a six-member committee, headed by a senior NBP official, to evolve a strategy to take over the assets. The mandate of the committee was to take possession of the units of the Ittefaq Group, to protect and preserve their assets and to auction them through court procedure. A bid of Rs2.48billion was received to this committee which was about half a billion rupees less than the actual loan. The bid was submitted to the court in 2005. However, the final court order for auction has not been yet issued following the petition filed by Mian Meraj Din.
The directors who owed Rs1.5billion loan to National Bank of Pakistan, Rs717million HBL, Rs340million UBL, Rs239million MCB, Ist Punjab Modaraba Rs110million, Bank of Punjab Rs61million, ADBP Rs58million, PICIC Rs17million and ICP Rs8million. The group directors include Mian Tariq Shafi, Mian Javed Shafi, Mian Abbas Shafi, Mian Riaz Miraj, Mian Shahbaz Sharif, Mian Yousuf Aziz and Mian Nawaz Sharif. Likewise, the directors of Brothers Steels included Mian Yousuf Aziz, Mian Yahya Siraj, Mrs Nusrat Shahbaz, Mian Naseem Tariq, Mian Memoona Idris, and Hussain Barkat. The directors of Ittefaq Brothers were Mian SHahbaz Sharif, Mian Mohamamd Idris and Mian Pervaiz Shafi.
PML N Spokesperson Ahsan Iqbal clarifies that the Sharif brothers were never declared defaulters and the matter is pending in the LHC and they have demanded a early hearing and settlement of this case. He dispelled the impression that the Sharif brothers are behind the delaying tactics. He said today the value of the assets is almost double the amount of the loan and after the settlement banks have to pay the additional amount.