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January 19, 2021

Broadsheet paid commission on recoveries not made yet

Top Story

January 19, 2021

ISLAMABAD: Around 98 percent of the total amount, paid to Broadsheet, is under the head of recoveries that NAB has neither made yet, nor there is any definite chance of doing so, as in certain cases the accused have been acquitted, and in other cases, the verdicts have not attained finality. The major part of the payment – $20.50 million – was made under the head of “projected recovery” from the Sharif family.

In two other cases – Aftab Ahmed Sherpao, Jamil Ansari (associated with Admiral Mansoorul Haq case), Broadsheet had shared the information, but NAB did not take action. The judge had ordered 20 percent commission for the assets’ recovery firm. While Sherpao was acquitted notwithstanding his account of $3.5 million was traced in Jersey Island, information of Jamil’s bank account containing $5 million was not used to proceed against him at time and he later came out clean after making a “voluntary payment” far lesser than the traced amount in his offshore bank account.

As far as Nawaz Sharif is concerned, since he was among the registered target, NAB was bound under clause 4 of the Assets Recovery Agreement to share 20 percent of the commission from the recovered amount, no matter Broadsheet has any role in tracing the assets or not. “For the removal of any doubt, the share of the assets recovered as set out in the Clause 4 shall also apply to any settlement, reached by NAB and any registered person or entity with or without the involvement of Broadsheet.”

Sir Anthony Evans, the judge engaged by Chartered Institute of Arbitrator in London, ordered NAB to pay $21.6 million under the head of recoveries and the interest levied on them as many recoveries were due from the backdate, was apart from the principle amount. The recoveries that NAB had actualised formed a negligible part of the amount as around half a million dollars had been paid commission under that account. The known recoveries as noted in the verdict on which Broadsheet has been paid 20 percent commission were related to Schon Group and Sultan Lakhani, Fauzi Kasmi and Lt-Gen (retd) Zahid Ali Akbar.

In terms of break-up, Broadsheet’s 20% commission on Schon Group recovery was $48,760, Sultan Lakhani ($25,000), Fauzi Kasmi ($85,600) and Zahid Ali Akbar ($381,600). The cases of Sherpao and Jamil Ansari have been marked as potential recoveries whereas the case of Nawaz Sharif has been identified as of projected recovery. Although the cases against him were instituted after Panama Papers, the judge ruled after hearing the arguments from both sides that Broadsheet would have traced his assets had it been allowed to work, therefore NAB was faulted for not granting the opportunity.

The verdict also issued directions that from which date the mark-up would be paid by NAB to Broadsheet together with the 20% commission. “In respect of this transaction, the claim succeeds in the amount of US$48,766.18 (say US$48,760) with interest to be assessed from 2007/2013 (say 1 January 2013),” verdict directs about Schon Group recovery.

In the case of Sultan Lakhani, the claim is for US$574,929.48 that being 20 percent of the sum, which NAB was entitled to receive under a settlement agreement made with him and various creditor banks dated 9 August 2004.

“The total amount payable to NAB was Rs1.12782 billion and NAB was entitled to a commission of 3 per cent…. In fact, NAB received only Rs7,380,342 (US$125,162.23) and contends that Broadsheet is not entitled to recover more than 20 percent of that amount, which is US$25,032.45. (xiv). Again, there is no evidence of any reason why NAB would have been able to agree, or in fact would have recovered, any greater amount than it did, had Broadsheet continued to be involved under the ARA. (xv) The claim succeeds, therefore, in the amount of US$25,032.45 (say US$25,000) with interest from 1 January 2005,” reads the verdict about settlement with Lakhani.

In the case of Fauzi Kasmi, the parties agreed that NAB received a relevant payment from Fauzi Kasmi in June 2005 and as to its amount, the judgment explains. “There is evidently a difference between them as to the relevant rate of exchange (PKR to US$). Claimants say that the 20% figure is agreed as US$87,197.96, but respondents say US$84,005.91. I have rounded these figures and taken the mean (US$85,600),” it says.

About Zahid Ali Akbar, the agreed (20 percent) figure is US$381,629.73 (say US$381,600) and the agreed date 1 December 2015, according to the verdict.

Regarding potential recovery from Aftab Sherpao, the judge noted that if Broadsheet had continued to be involved, given its established links with the authorities in Jersey, there was a greater chance that NAB would be induced to press its claim for recovery of the asset there. “I FIND AND HOLD that there is a significant chance that NAB would have recovered the amount that was held in the bank account in Jersey, and that it would have done so by 31 December 2004. (f) The net recovery would have been (say) 90 percent of US$3,500,000, equals US$3,150,000. One-third of that figure is US$1,050,000 and Broadsheet’s entitlement under Clause 4 of the ARA (20 percent) therefore would be US$210,000,” he decided. Mark-up on it has been paid from January 1, 2005.

Broadsheet’s information about Jamil Ansari bank account of $5million in Jersey Island was not used by NAB, but later a settlement was brokered under which he made a ‘voluntary payment’ to NAB of Rs48,040,714.30 (US$792,620.27). “No documents or other explanation of the payment had been produced by the respondents. The fact of payment supports claimant’s contention that the funds were corrupt assets. Respondents accept that Broadsheet is entitled to recover damages corresponding to 20 percent of this amount, which is US$158,524.05 (say US$158,500). I conclude that there is a significant though small chance that a recovery of a net figure of US$4,500,000 would have been made during 2004 and that the percentage chance of success was 20 percent (US$900,000). The damages figure therefore is US$180,000,” the judge noted.

Regarding Sharif family, valuation of total assets inside Pakistan and abroad was made around $820 million; however, the judge noted that “the appropriate valuation of the potential recovery from the Sharif family is US$100 million to be realised at some future date. Deducting 5% to take account of likely delay in eventual recovery, the net figure therefore is US$95 million and the claimant’s share at 20 percent is US$19 million.” He further noted that $100 million could also be an attractive settlement figure for both parties, given the respondents’ low estimate of their prospects of successful recovery.