KASB Bank’s amalgamation with Bank Islami challenged

ISLAMABAD: A petitioner has challenged amalgamation of Khadam Ali Shah Bokhari (KASB) Bank with Bank Islami before the Islamabad High Court (IHC) while praying to the court to declare the deal as illegal.

Justice Aamer Farooq of the IHC heard this matter and made the documents related to the inquiry of the said deal as part of judicial record. The petitioner, Mohammad Khalid Randhawa, a shareholder of KASB Bank has filed the petition against the controversial sale of KASB Bank to Bank Islami for only Rs1,000. The petitioner said in his petition that the controversial sale and dolling out Rs20 billion loan to the later by State Bank of Pakistan is being probed by the National Accountability Bureau (NAB).

The petitioner adopted in the petition that the Transparency International Pakistan (TIP) last year highlighted this matter. The TIP, in its correspondence to NAB in July 2015, asked anti-corruption body to probe allegations of corruption in sale of KASB Bank by the State Bank of Pakistan (SBP) at Rs1,000 to the Bank Islami, rejecting an offer by a Chinese company for investment of $100 million in KASB. Moreover, the SBP then gave loan of Rs20 billion to Bank Islami on concessionary rates, out of which Rs5 billion was given on interest rate of as low as 0.1 percent per annum. 

The petitioner requested the court to take cognisance in this matter. the petitioner claimed in the petition that regional director of NAB wanted to conduct an inquiry against SBP officials and against the SBP governor  as well, but conducting inquiry against such high officials was beyond powers of a regional director. Subsequently, a NAB Executive Board meeting on May 26, 2016, re-authorised the inquiry against SBP’s officers and officials. 

Legal counsel for the petitioner, Hashmat Ali Habib, told the court that the KASB Bank was sold to the Bank Islami on the recommendations of a chartered accountancy firm MS AF Furguson.  Petitioner’s counsel argued that it was an act of cheating and fraud of 1.95 billion shares. Further hearing in this case will be after IHC registrar fixes the matter.