NICL scam: Senate panel dissatisfied with FIA’s land evaluation

Standing committee on commerce tells investigators to advertise land to obtain prices.

ISLAMABAD: A Senate panel said on Friday that the Federal Investigation Agency’s (FIA) initial evaluation of misappropriation in the National Insurance Company Limited’s (NICL) land deals was very low.

The Senate Standing Committee on Commerce also directed the FIA to advertise the purchased property to obtain a real picture of corruption.

The FIA apprised the committee on the progress that it had made in investigating the four land deals in which Rs2.5 billion were allegedly misappropriated by former NICL chairperson Ayaz Niazi, who is in the FIA’s custody.

FIA Director-General Waseem Ahmed said that the management had paid over Rs5 billion for these four transactions and according to FIA’s assessment, the prevailing market price was half of what the NICL had paid, presuming a loss of Rs 2.5 billion. “The FIA has so far recovered Rs1.83 billion of the Rs5 billion deals,” he said.

However, committee chairperson Senator Ilyas Ahmed Bilour said that it appeared as if Niazi was clean except for one transaction. “The committee does not trust the evaluators as resourceful people could have approached them. Up to Rs3.5 billion are still recoverable, which can be done through reselling the purchased land,” Bilour said. Senator Haroon Khan, said that the FIA must recover the money and advertise the properties for re-sale.

Ahmed also said that evaluators were overvaluing the property’s price, making it difficult to assess actual embezzlement in the deals. He said that the FIA did not have full faith in the evaluators so it had decided to hire M/s National Engineering Services Pakistan (Nespak) to evaluate the transactions in Lahore and Karachi.

Ferozpur Land Lahore

Ahmed told committee members that NICL bought 803 kanals of land at a price of Rs1.63 billion from the Warraich family and paid the amount without having the property transferred to the NICL, the FIA, he said, had recovered the entire amount and the deal has been canceled.

“Niazi testified to the committee that he had neither bought the Warraich property nor paid any money. He blatantly lied to parliament and I, in my 21-year political career, have not met such a liar,” said Ishaq Dar.

Airport Land Lahore

Ahmed said that the NICL had purchased 20 kanals of land at a rate of Rs530 million per kanal. The total deal amount was Rs1.06 billion. “We got the land evaluated from M/s Ahmad Associates and the evaluator assessed that, against a market price of Rs980 million, the NICL paid Rs1.06 billion – a difference of Rs80 million,” he said. “Though we recovered the differential of Rs80 million, we did not agree with the evaluation and hired M/s Nespak.”

Karachi Land

Ahmed said that the NICL had bought 10 acres of land at Rs90 million per acre and paid Rs900 million. Evaluator M/s Ahmad Associates assessed the total market price of the land at Rs700 million and FIA has recovered the difference of Rs200 million.

He said that the FIA has attached the other 10 acres of Warraich’s land and also confiscated his residence worth Rs50 million. However, the committee disagreed with FIA findings and said the total loss in the deal was Rs700 million. “The maximum per acre price of this land is Rs2 million as it was basically agricultural land but was assessed as commercial land,” said Senator Semeen Siddiqui.

But, Ahmed said the minimum price was Rs40 million per acre and the FIA has issued red warrants for Khalid Anwar and Khwaja Akbar Butt. “If someone thinks we will hush up the matter, we will not,” said Ahmed.

Dubai Deal

Ahmed said that the FIA was facing difficulties in evaluating the land in Dubai as evaluations of foreign firms did not match the purchased price. The NICL bought this land at 2,640 UAE Dirhams per square feet but the committee said the land was purchased at double that rate.

Published in The Express Tribune, January 15^th,  2011.