Islamabad: The scam of selling KASB bank to Bank Islami (BI) on a mere Rs1000 echoed in the meeting of the PAC which expressed its strong dismay over the State Bank of Pakistan (SBP) for not only selling the bank on just Rs1000 but also extended loan of Rs15 billion to Bank Islami for a period of one year at the nominal rate of 4.7 percent again its prevailing KIBOR rate of 7.6 percent that resulted into the loss of Rs435 million to national exchequer.
Even the PAC Chairman Syed Khursheed Shah requested chief justice Supreme Court of Pakistan and chairman NAB to take suo motu notice of sale of defunct KASB Bank of such a high profile banking scam. The meeting of Public Accounts Committee (PAC) held on Wednesday chaired by its Chairman Syed Khursheed Shah.
The SBP even failed to respond the grilling questions of the department of Auditor General of Pakistan (AGP) and the PAC for the sale of KASB to Bank Islami just on pennies. The Audit officials of the department of AGP told the committee that SBP placed moratorium on Muslim Commercial Bank (MCB), which was interested to buy the bank and even did not allow the Chinese company, which offered of $100 million to buy the bank but favoured the Bank Islami to buy the bank on just Rs1000.
The PAC also asked Chairman NAB Justice (R) Javed Iqbal to complete the investigation on the defunct KASB bank scam. “There was a high profile case only when there was a politician behind it then the officials with files and pleading the case,” PAC chairman remarked. He remarked when the SBP sold the bank to the favourites without any biffing then what would remain behind. “The Bank was sold on Just Rs1000 and further Rs15 billion loan was given on just minimal interest rate,” he said.
The audit officials told the committee that the NAB in its investigation report stated that it was established that the officials of the SBP misused the authority for selling the bank. Khursheed Shah questioned that who were the owners of the bank and what were reasons to give such a favour to particular company when the country’s biggest bank MCB and Chinese bank was interested to buy it.
Deputy Governor SBP replied that one of the owner of the bank is Ali Hussain, who is Singapore based Pakistan and other partners were from Bahrain, who had major shares besides some local share holder.
The SBP official refuted the impression of selling of Bank on Just Rs1000, saying that this impression is totally wrong as those who purchased it also got the liabilities of Rs65 billion of the bank and there was a 150,000 depositors of the bank and had the bank not sold then depositors’ money would have been lost.
The SBP official said the defunct KASB was a problem bank where equity eroded significantly due to losses and capital adequacy ratio was turned negative. PAC Chairman Syed Khursheed Shah said if SBP wanted to secure the interest of the depositors then the bank be sold through open competition.
PAC member Syed Naveed Qamar remarked that Pakistan Railways, PIA and Steel Mills were also going into negative then whether these would be sold like the defunct KASB bank. “The Sindh High Court already declared that the deal was not transparent,” he said.
While examining another audit para relating to Competition Commission of Pakistan (CCP), the audit officials told the committee that the Competition Commission of Pakistan has not recovered penalties/fines imposed on different companies of Rs26.44 billion.
CCP Chairman Ms Wadiyya Khalil told the committee that this amount was stuck in the courts of law as when the CCP imposed the penalties the companies approached the courts of law. PAC member Syed Naveed Qamar observed that the chief justice was looking after everything then why he did not look towards his own side. “Why the Chief Justice was not looking into that matter that Rs26 billion were stuck up in the cases,” he remarked.
The PAC directed to write a letter to the Attorney General of Pakistan to inform the chief justice on the stuck up amount due to pending cases. Meanwhile, The Public Accounts Committee (PAC) Wednesday directed to forward the written complaint to Establishment Division (ED) against senior Joint Secretary Finance Ministry Zahoor Ahmed for rude manners with the committee members when he failed to respond the quizzing questions.
The PAC meeting was held with the chair of its Chairman Syed Khursheed Shah in which the audit paras related to Ministry of Finance for the year 2016-17 were examined. During the meeting, the senior joint secretary Finance Ministry failed to respond the questions of the committee member with regard to allocation of out of PSDP development budget.
The PAC member took strong exception of the attitude of the joint secretary of the Finance Ministry and PAC chairman while expressing his annoyance said that its seems that the joint secretary did not make difference between the development and non-development budget. “You did not know anything but trying to teach us,” the PAC chairman stated. He directed to write a complaint letter to the Establishment Division against the joint secretary Finance Ministry and also directed to put this complaint into the ACR of the official.
The PAC also directed for provision of the record to the department of Auditor general of Pakistan of distribution of Rs162 billion to the different department without the approval of the Parliament during the tenure of ex-finance minister Ishaq Dar by the Finance Ministry and complete investigations in this regard.
While examining the appropriation accounts of the Finance Ministry, the PAC recommended to the Finance Ministry for devising the procedure for enhancing in the pensions. PAC member Syed Naveed Qamar said there should be a mechanism for the pension.
Secretary Finance Ministry Arif Ahmed Khan said there were around more than 1.5 million employees in that includes more than 600,000 civilian and more than 700,000 military. “There were flaws in our system due to which the data of retiring employees was not available in our records as some of military employees were retired after 18-years of service and some after 20-years,” he said.
Auditor General of Pakistan Javed Jehangir offered to provide the service of his department to the Finance Ministry and said that his department has a mechanism and ready to share it with Finance Ministry.
