MCB privatisation: NAB close to finishing probe into alleged scam

DG insists there was no pressure to abandon the investigation

ISLAMABAD:

Despite facing hurdles from various quarters, the National Accountability Bureau (NAB) is close to completing probe into alleged wrongdoings in the privatisation of MCB Bank, which will resolve the quarter-century old case.

NAB had done 75% work and could complete the investigation within one week provided the restraining order from a single-member bench of the Lahore High Court (LHC) was vacated, said Zahir Shah, Director General NAB, on Thursday.



The court had stopped NAB from announcing its findings, said the official.

He was giving a briefing about the status of the investigation report to the Senate Standing Committee on Finance and Revenue that had been actively pursuing the case. Senator Saleem Mandviwalla of the Pakistan Peoples Party (PPP) chaired the meeting.

In 1991, Nawaz Sharif’s administration sold 75% stake in MCB to Mian Mansha at a price of Rs2.42 billion. Mansha’s consortium was not the highest bidder, but it eventually matched the price quoted by the highest bidder, said Shah.

“There are advantages and disadvantages of the ongoing inquiry but the advantages outweigh the disadvantages,” he said while responding to a question about the outcome of the probe. He refused to give details.

The MCB privatisation is listed among 150 mega financial scams and NAB reported the case to the Supreme Court in June last year. The court had ordered NAB to complete the investigation by November 2015.

Shah said the SC deadline was missed due to the LHC’s restraining order. Nine sponsors of MCB, including Mian Mansha, had filed petitions before the court.

The DG said the single-member bench of the LHC did not have the mandate to hear the case, as the Supreme Court’s three-member bench had given directives for conducting the inquiry.

Under the NAB law too, he added, a single-member bench could not hear the case.



“The LHC judge has probably remained a lawyer of the Nishat Group (led by Mian Mansha), therefore, he cannot hear the case,” observed Senator Saeed Ghani of the PPP, who was a force behind the revival of the case.

The DG insisted that he was not under pressure to close the case. “Had NAB been under pressure, it would have abandoned the inquiry by citing the LHC restraining order.”

Last hearing of the case was held on January 20 and the LHC adjourned it until February 18 after the federation and Privatisation Commission could not submit replies.

Giving an update about the case, the DG said so far summons had been issued and 12 directors of MCB including then president Hussain Lawai had been called. Recovery of record of the original case is still under way.

According to the July 2015 briefing of NAB, its 2002 inquiry had established that sponsor-directors of MCB had submitted a fake bid bond - a pre-requisite for joining the bidding process.

It added the sponsor-directors also used MCB funds in making payments for the acquisition of shares, which caused substantial losses to the bank in terms of rightful income.

“The initial requirement to deposit a bid bond of Rs100 million was allegedly met by Hussain Lawai in his capacity as Country General Manager of Faysal Islamic Bank of Bahrain,” NAB said.

Furthermore, a loan of Rs838.8 million was arranged by Lawai for the buyers to pay the first installment allegedly in violation of rules and without obtaining sufficient security.



NAB had conducted a preliminary inquiry from 2000 to 2002 but after a meeting in the Ministry of Finance in May 2002, the case was sent to the State Bank of Pakistan.

“The case remained unattended to with the SBP and no action was taken for 10 years,” showed the NAB briefing submitted in the meeting on Thursday.

Published in The Express Tribune, January 29^th,  2016.

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