Monday September 20, 2021

Mystery deepens over who authorised payment of $1.5m

January 10, 2021

ISLAMABAD: Mystery deepens over who authorised payment of $1.5million that the National Accountability Bureau (NAB) made to a wrong person while attempting to broker a settlement with Broadsheet LLC in 2008 as the firm went into arbitration after knowing this which resulted in a penalty of $28.7 million.

Audit objection continues to persist and a NAB spokesman feigned ignorance when inquired about the identity of authorising person.

The issue also figured during the arbitration proceedings conducted by Sir Anthony Evans, the judge engaged by Chartered Institute of Arbitrator in London for settling the contention between Broadsheet and NAB. In May 2008, Pakistan negotiated a settlement agreement with Jerry James. Broadsheet which was set up in Isle of Man (IOM) was ordered into liquidation in March 2005 as it owed substantial debts to its various service providers engaged for assets tracing, whereas the NAB had terminated agreement in 2003.

A businessman based in Colorado (US), James was originally part of Broadsheet but wasn’t authorised to negotiate after liquidation. He formed a new company in Colorado with the same name, Broadsheet LLC, and represented it as the successor of the dissolved one which it was not. The fraudulent deal was completed by his entering into a sham settlement agreement on May 20, 2008 for the sum of $1.5 million which purported to settle any and all claims of Broadsheet against NAB. The settlement agreement and James’ affidavit were riddled with false and deceptive statements. For example, he declared himself in the settlement agreement as a shareholder and beneficiary of “Broadsheet LLC under winding-up” and in his affidavit that he was “fully authorised to execute the settlement agreement.” In reality, Broadsheet was a limited liability company that had no shareholders, managers or operating agreement.

Nevertheless, in satisfaction of this sham settlement, Pakistani High Commission in London made payment directly to James (not into the firm’s account) in the amount of $631,626 on May 20, 2008 and the remaining amount of $868,374 through Compass Bank, Colorado on September 29, 2008. This was despite the fact that James had no authority to act on behalf or the only relevant company, Broadsheet (IOM). The NAB hired Ahmer Bilal Soofi advocate for negotiating settlement, but he was kept away from the process. The first cheque was delivered by Abdul Basit Khan, now former ambassador. He was then deputy high commission in Pakistan High Commission, UK.

Soofi wasn’t available for comments, but an official privy to his involvement said he was kept away from the payment matters. When asked the reason, he said it was probably to avoid delay of the payment as the lawyer could raise any objection. Basit declined to discuss the matter terming it an old issue which is hard for him to recollect. Another official, then posted in Pakistan mission there, said the High Commission was only under instruction to make payment as no other detail was shared.

“We were told that somebody named Jerry James would come to receive cheque. We were provided his basic details like passport number and full name. In addition, we were asked to arrange telephonic conversation between him and a Law Ministry official before the payment was done,” he said. Asked with whom his conversation took place, the official replied: “somebody from Law Ministry.”

The arbitration judge was also not clear as to who was the authorising person to approve this payment. “There is no direct evidence of the identities of the person(s) who authorised signature of the settlement agreement on behalf of the respondents (NAB), and as found in the Liability Award “an executive decision was taken within NAB…by senior executives in NAB after it was approved by a high-level committee within the government and was authorised by the President of Pakistan,” noted the judge.

He has also endorsed that Soofi was not involved in the process although he was engaged for the purpose. “The Settlement Agreement was authorised for NAB by an executive decision in which Soofi was not involved. There is no evidence as to who the decision makers were. The (chairman) of NAB at that time was Mr (Naveed) Ahsan,” the judge wrote.

When these facts became known to the legal representative of Broadsheet, an Iranian-born former Oxford University academic Kaveh Moussavi, he took steps to have the dissolution of Broadsheet set aside. A new Liquidator was appointed who authorised these arbitration proceedings against the NAB; the first notice was served on October 23, 2009.