Tuesday May 17, 2022

NBP to help FIA in Hascol inquiry

January 27, 2022
NBP to help FIA in Hascol inquiry

KARACHI: National Bank of Pakistan (NBP) extended its support to FIA’s inquiry related to Hascol Petroleum Limited (HPL) on the company’s banking arrangements with NBP, a statement said on Wednesday.

“NBP has been and continues to cooperate fully with the FIA on this investigation and make available all relevant records and transactional history, including arranging meetings with its employees who have managed the Hascol relationship with NBP,” the bank said. NBP said its own stance on the Hascol event had been documented in a submission made to the State Bank of Pakistan (SBP) in December 2021 and subsequently provided to the FIA.

The fundamental challenges identified by NBP, stemmed from a material negative re-statement of the company’s financial records with acknowledgement of ‘fraud’ by Hascol management at that time, it continued, adding that credit decisions made by banks were based on a set of audited financials, which were different and as the ‘fraud’ unfolded, two of the company’s auditor’s resigned citing financial irregularities within Hascol.

NBP stated that while all the OMCs (oil marketing companies) incurred losses during the Covid crisis due to a rapid decline in demand, fall in oil prices, and the rupee’s devaluation, Hascol’s issues were exacerbated by its financial fragility on high leverage and over-valued assets.