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May 24, 2013
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SHC issues restraining order against TIP on JS Bank’s plea

May 24, 2013

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LAHORE: The Sindh High Court has restrained Transparency International Pakistan (TIP) from contributing or circulating any “libellous or false material” against JS Bank Ltd (JSBL) and issued notice to the TIP management in this regard.
The court issued the order on a damages suit of Rs5 billion, filed by the JS Bank against TIP for tarnishing the image of the bank by circulating “false and libellous information”.The plaintiff bank arrayed TIP Executive Director Saad Rashid, TIP Adviser Syed Adil Gilani, its Chairman and Transparency International Secretariat as defendants.
The bank, through its counsel Khalid Jawed Khan, pleaded that it is seriously aggrieved, distressed and prejudiced by the false, misleading, motivated and malicious propaganda campaign launched against it by the TIP, abusing their respective positions as office-bearers in the national press and media.
According to the petition, this is being done under the stewardship of Gilani, who being a business associate/employee of Aqeel Karim Dhedhi, a stockbroker and a self-proclaimed business rival of Jahangir Siddiqui, has unleashed this vicious, malicious and defamatory media campaign against the plaintiff by grossly misusing the umbrella and platform of the TIP.
The bank pointed out that while proclaiming to be the global and national watchdog against corruption, the TIP and TI have completely and miserably failed to reign in their own staff members or representatives in Pakistan from abusing their platform and the ostensible authority and respective positions as the TIP officer-bearers.
They are not only causing serious harm and damage to others but also seriously undermining the name and credibility of the TIP and TI. Indeed serious allegations of personal corruption have been made and widely reported against the TIP advisor Gilani in the national media, yet nothing whatsoever has done by the TIP or TI against him, stated counsel.
The serious allegations and the

negative media projection of JS Bank by TIP is extremely damaging for the business and its good name and credibility. Besides, it is also causing irreparable damage to the shareholders and customers of the plaintiff. Indeed, it appears that this was precisely what the objective and intention of the TIP advisor and the EC was and they have acted as willing accomplices and facilitated execution of their criminal design.
The counsel said a malicious campaign was launched against JS Bank, based on a highly misleading and defamatory news report published in a section of national press captioned as “Shares prices: State Bank asked to take action against JS Bank”.
The same news report is also posted on the website of TIP. It was reported that TIP has addressed a letter to the acting governor of State Bank of Pakistan and highlighted serious allegations of insider trading against JS Bank and Jahangir Siddiqui Group of Companies (JS Group) and has accused State Bank of Pakistan (SBP) officials of collusion in protecting the plaintiff bank.
Furthermore, the news report stated that the TIP Advisor Gilani has addressed a letter to the acting governor of the SBP to take immediate action against SBP officials accused of protecting the plaintiff bank. The letter also alleged that despite confirmation from the Securities and Exchange Commission of Pakistan (SECP) of illegal insider trading by the JSBL in the shares of Azgard Nine Limited (ANL) resulting in price manipulation of shares, the SBP has taken no action against the accused bank for breaking banking regulations.
He said JS Bank immediately issued clarification to the newspaper and accordingly on May 16, 2013 a newspaper published a clarification stating that the documentary evidence from the SECP confirms that there is nothing against the plaintiff bank in respect to trading in shares of ANL pertaining to the years 2007 and 2008.
However, despite the above clarification by the newspaper, the TIP neither published/posted the said clarification on its website nor removed/withdrew the earlier false and misleading news report posted on its website. This clearly shows the mala fide intention of the TIP executive director and advisor.
The counsel said the allegations made in the letter written by the TIP to SBP and, as reported in the news report on May 14, are completely and demonstrably false, misleading and based on mala fide motives and extraneous considerations.
If the TIP was genuinely concerned about any trading/ transaction by the JS Bank, the proper course would have been to seek the views of the plaintiff first. Had that been done and had minimum inquiry been made, it would have instantly come to light that the SECP had never confirmed the allegations against the plaintiff as falsely stated. Indeed quite the opposite, the SECP had specifically cleared the plaintiff of any wrongdoing in this context. Likewise the plaintiff or any of its associate concerns had never sold any Agritech shares to the National Bank of Pakistan, as falsely stated, the counsel added.
He further submitted that these patently false allegations were mischievously and deliberately made by Syed Gilani using the platform of the TIP to promote his own agenda and that of others on whose payroll/ employment he is serving. The TIP and the TI, by failing to restrain and curtail the mala fide acts of Gilani, are fully responsible for the damages resulting from mischievous acts of Gilani.
He said one of the guiding principles in the statement of ethics of the TIP provides that “We strive to take positions that are based on sound, objective, dispassionate and fully professional analysis and high and sound standards of research”. It is evident that Gilani has acted in gross violation of the declared guiding principle of the TIP.
The counsel argued that Gilani was fully aware of the fact that the plaintiff bank was not accused of any illegal trading in ANL shares for the period which was investigated by SECP or even in the year 2012, as was later falsely alleged by Gilani. This is also evident from another news item based on Gilani’s letter from the platform of TIP and addressed to the then SECP chairman, published in an Urdu daily on April 12, 2013.
He said the fact that the plaintiff bank was not accused of any wrongful trading in ANL shares by the SECP nor was there any adverse finding against it in that regard is also evident from the letter of SECP issued on April 4, 2013 to the plaintiff bank. This SECP letter completely falsifies the contents of Gilani’s letter to the SBP, which was reported in the media.
He said the callous disregard for truth and objective research as well as its own stated objective and statement of ethics is further manifest from yet another false and misleading letter addressed by the TIP ED using his position of Executive Director and published in another newspapers making false allegation against the plaintiff.
The plaintiff bank was completely shocked and surprised at the audacity and fraudulent manner in which the TIP office-bearers were openly and grossly abusing their positions to cause damage to the good name and reputation as well as the business of the plaintiff bank, the counsel added.
It was reported in an Urdu daily on May 16, 2013 that the TIP executive director has addressed a letter to SECP stating that the plaintiff bank has paid a sum of US$4.2m to its own director as advisory fee in respect of illegal sale/ purchase of shares.
The counsel submitted that the plaintiff bank had no concern with that transaction nor ever paid any such sum to any of its directors as falsely alleged. The allegation against the plaintiff bank is absolutely false, misleading and this fact could be easily confirmed from the published audited annual financial statement of the bank which is publicly available.
If the TIP ED and advisor had been acting as honest and public minded dedicated activists against corruption, the plaintiff would not have filed the present suit as the plaintiff bank would appreciate and acknowledge the efforts of any neutral body/ watchdog which was honestly committed to eradication of the vices of corruption and misuse of public power.
However, the true picture of the TIP ED and advisor, particularly the latter, is horrific, mind-boggling and nothing short of an eye-opener, he maintained.
He said irrefutable evidence has emerged that Gilani was on the payroll of Aqeel Karim Dhedhi in his construction project namely Creek Terraces Project and City Vista Project. He has signed an Addendum Agreement on May 5, 2009 (between PDOHA and Creek Developers Pvt Ltd) as witness on behalf of Creek Developers (Pvt) Ltd owned and controlled by Aqeel Karim Dhedhi. Subsequently, Gilani also corresponded with third parties on behalf of Creek Developers (Pvt) Ltd.
The counsel continued that this is a case of manifest and gross abuse of authority conferred by the TIP on its ED and advisor. Gilani could not act as such while being in the employment of an interested stockbroker of the city. This is an obvious case of conflict of interest.
He said Gilani has a chequered history of wrongdoings resulting in allegations of fraud while he was working as a government employee in Karachi Development Authority and award of construction contract for the FTC building. And FIA had initiated an inquiry against him. Later on, he also worked as consultant with different business houses. It was further alleged that he used his position and authority as an officer-bearer of the TIP to get himself involved in award of various government contracts.
He said a new item published titled “Transparency International’s head in Pakistan abetting corruption”. The article alleged gross corruption and blackmail against Gilani with particular reference to major national scam relating to the National Insurance Company Ltd. (NICL scam) involving billions of rupees of which Supreme Court was also pleased to take notice.
The article reported that Aqeel Karim Dhedhi was also using his influence to stop and block the investigation in attempt to save absconding board member, who was his relative. It stated that the TIP chairman volunteered to present a fact-finding report to the Supreme Court establishing the innocence of the NICL officials. In return, the NICL would award contracts solely to private parties cleared by TI. Likewise, articles were circulated in the media that the son of Gilani resigned from the Board of PNSC whose initial appointment was given as example of nepotism and bad governance.
The counsel said Gilani is personally deeply involved in blackmail, extortion and corruption and working to promote the agenda and interests of a controversial stockbroker, despite full knowledge of these facts/ allegations. The TIP chairman and TI are equally responsible for the misconduct and misuse of position by Gilani.
The damaging consequences of the false and defamatory news reports by the TIP also had negative impact on the plaintiff and its customers who were also seriously concerned with the ongoing media campaign. This has also adversely affected the business and operations of the plaintiff bank. The damaging consequences continue to unfold till date thereby adding to the losses and serious harm caused to the plaintiff. The plaintiff is still preoccupied in their efforts to minimise the devastating consequences of the defamatory actions/ misreporting by the TIP’s office-bearers.
The counsel said printing of the false, misleading and defamatory material by the TIP has also resulted in significantly lowering the goodwill and standing of the plaintiff in the market/ business circles as well as in the eye of public at large. This also resulted in sullying the good name and exceptionally high rating/standing of the plaintiff in the relevant business circles.
He said the plaintiff has been subjected to a highly misleading, malicious, damaging and defamatory smear campaign and has suffered serious losses and prejudice due to this campaign, orchestrated by the TIP in the media.
The plaintiff bank prayed to the court to declare the allegations made by the TIP false, misleading and defamatory and restrain it from publishing or circulating any such material.
It was further prayed that direction might be issued for award of a sum of Rs5 billion by way of damages/ compensation to the plaintiff against the defendants jointly and severally. The plaintiff also asked the court to restrain the TIP office-bearers from functioning. The court will resume hearing on May 28 but has issued the interim injunction to restrain Adil Gilani and TIP from making these accusations.

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