Outstanding debts: FIA dredges up loan case against the Sharif family
Despite lapse of 18 years, Ittefaq Group owes Rs2.3 billion to banks: report.
LAHORE:
The Sharif family, including former premier Nawaz Sharif, Punjab Chief Minister Shahbaz Sharif and 13 other relatives have failed to return loans worth over Rs2.3 billion despite a lapse of 18 years, a report prepared by the Federal Investigation Agency (FIA) revealed.
The case brief, available with The Express Tribune, revealed that during the year 1994-95, the Ittefaq Group of Industries (one of the Sharifs’ family businesses) obtained loans from various banks amounting to almost Rs3.1 billion in total. In return, the Ittefaq Group pledged the companies’ mortgaged fixed assets, stocks, raw materials, finished goods, stock charges and personal guarantees by the companies’ directors as collateral. The mortgaged assets (including industrial property), according to sources, are now worth far more than the Rs2.3 billion liabilities.
A breakdown of the loans obtained shows that Rs1.545 billion was obtained from the National Bank of Pakistan (NBP), Rs340 million from United Bank Limited (UBL), Rs239 million from Muslim Commercial Bank (MCB), Rs110 million from First Punjab Modarba, Rs61 million from the Bank of Punjab, Rs58 million from the Agriculture Development Bank of Pakistan, Rs 17 million from Pakistan Industrial Credit and Investment Corporation (PICIC) and Rs8 million from the Investment Corporation of Pakistan.
The outstanding liabilities of the Ittefaq Group of Industries lie at over Rs2.3 billion, including the principal amount, mark-up, and cost of funds.
As per the recovery suits, the names of directors of the Ittefaq Industries include Nawaz Sharif, Shahbaz Sharif, Nusrat Shahbaz. In 1998, the directors of the Ittefaq Group voluntarily offered to surrender the assets of the group to the Lahore High Court (LHC), to settle claims of all the creditor banks. Upon this offer, all the banks unanimously agreed to get a court order and as per legal advice, an application was filed by the banks before the LHC.
While hearing this application, the LHC constituted a Committee on July 8, 1998 to take possession and to protect, preserve and dispose of the assets of the companies belonging to the Ittefaq Group.
Sources familiar with the matter, however, say that one director of the group or another would file a petition every time the court came close to allowing bidding on the assets, thereby delaying the process.
The committee has convened a number of meetings since its constitution, and bids were called through the publication of notices in newspapers .The last and highest bidding was received in 2005, amounting to Rs2.48 billion. The bidding was jointly endorsed and submitted to the committee by all creditor banks, after which the committee further submitted it to the LHC for an order to accept the said bid for an auction of the units. However, the court order has not been issued yet due to various legal complications, the FIA report stated.
Published in The Express Tribune, May 14th, 2012.
The Sharif family, including former premier Nawaz Sharif, Punjab Chief Minister Shahbaz Sharif and 13 other relatives have failed to return loans worth over Rs2.3 billion despite a lapse of 18 years, a report prepared by the Federal Investigation Agency (FIA) revealed.
The case brief, available with The Express Tribune, revealed that during the year 1994-95, the Ittefaq Group of Industries (one of the Sharifs’ family businesses) obtained loans from various banks amounting to almost Rs3.1 billion in total. In return, the Ittefaq Group pledged the companies’ mortgaged fixed assets, stocks, raw materials, finished goods, stock charges and personal guarantees by the companies’ directors as collateral. The mortgaged assets (including industrial property), according to sources, are now worth far more than the Rs2.3 billion liabilities.
A breakdown of the loans obtained shows that Rs1.545 billion was obtained from the National Bank of Pakistan (NBP), Rs340 million from United Bank Limited (UBL), Rs239 million from Muslim Commercial Bank (MCB), Rs110 million from First Punjab Modarba, Rs61 million from the Bank of Punjab, Rs58 million from the Agriculture Development Bank of Pakistan, Rs 17 million from Pakistan Industrial Credit and Investment Corporation (PICIC) and Rs8 million from the Investment Corporation of Pakistan.
The outstanding liabilities of the Ittefaq Group of Industries lie at over Rs2.3 billion, including the principal amount, mark-up, and cost of funds.
As per the recovery suits, the names of directors of the Ittefaq Industries include Nawaz Sharif, Shahbaz Sharif, Nusrat Shahbaz. In 1998, the directors of the Ittefaq Group voluntarily offered to surrender the assets of the group to the Lahore High Court (LHC), to settle claims of all the creditor banks. Upon this offer, all the banks unanimously agreed to get a court order and as per legal advice, an application was filed by the banks before the LHC.
While hearing this application, the LHC constituted a Committee on July 8, 1998 to take possession and to protect, preserve and dispose of the assets of the companies belonging to the Ittefaq Group.
Sources familiar with the matter, however, say that one director of the group or another would file a petition every time the court came close to allowing bidding on the assets, thereby delaying the process.
The committee has convened a number of meetings since its constitution, and bids were called through the publication of notices in newspapers .The last and highest bidding was received in 2005, amounting to Rs2.48 billion. The bidding was jointly endorsed and submitted to the committee by all creditor banks, after which the committee further submitted it to the LHC for an order to accept the said bid for an auction of the units. However, the court order has not been issued yet due to various legal complications, the FIA report stated.
Published in The Express Tribune, May 14th, 2012.