Rs1.43 billion EOBI land deal raises questions
Estimates put the amount paid at 300% of actual price.
ISLAMABAD:
In one of the most controversial deals made by Employees Old-age Benefits Institution (EOBI), 40 kanals of land of mauzia (village) Shejpal in Lahore was purchased at a whopping Rs1.43 billion – a price tag believed to be some 300 per cent higher than the actual worth.
Sources told the Express Investigation Cell (EIC) that EOBI struck the deal with a real estate company known as Asset Management Firm in September 2011. Independent evaluation suggests that the price paid by EOBI is 300 percent higher than actual market rates in the area, while the architect of the deal showed residential land as commercial to justify its steep price.
The primary question coming forward is why EOBI did not seek the approval of its board of trustees (BoT) before signing a deal and releasing such a large amount of cash. Asset Management Firm itself is an unknown name in real estate market of Lahore – and an official of the Lahore Cantonment Board says they have no track record of the firm. A senior official of Lahore Cantonment Baord told EIC on the condition of anonymity that the board had never heard of “Asset Management Firm” before the registration of the Shejpal land deal.
However, EOBI chairman Zafar Gondal defended the deal, claiming that it was approved by the BoT. But a letter of the ministry of human resource development, dated May 28, 2012, addressed to Gondal himself, contradicts the claim. It reads: “The minutes of 169th to 189th meetings of investment committee should not be treated as approved by the BoT of EOBI.”
EOBI manages a huge fund collected from the private and public sector organisations, and its management is required to strictly follow procurement rules to ensure transparency in any deal. BoT approval is mandatory for EOBI to purchase any property from any public sector organisation, while rules strictly bar any purchasing of land/assets/shares from a private firm or company.
Moreover, while EOBI is trying to buy questionable land, its prime properties in Lahore are being occupied by land-grabbers, against whom no action has been taken.
The activities of the current chairman have already been brought to the attention of the president and prime minister by a former board member who was thrown out because of his refusal to be a part of the plunder. Syed Imran Ali Shah, a board member, cited many cases of corruption under Zafar Gondal – who is the brother of Pakistan Peoples Party (PPP) central leader Nazar Gondal – but has been ignored thus far.
EOBI says that it has done nothing wrong. Pointing out that the land has been purchased with due approval of the Investment Committee and Board of Trustees, it says the land was evaluated by M/s Dimen Associates (Pvt) Limited.
It also refutes the claim that the land is not commercial – saying that the Lahore Cantonment Board has certified it as such – and has also rubbished questions being raised over the location of the land. It said that the Lahore Cantonment Board has determined land value of all properties having frontage on ring road to be Rs13.23 million per kanal adding that the property in question is in fact uniquely located at the interchange. Saying that the deal was an excellent purchase, EOBI also stated that it was looking for additional purchases of adjoining properties for higher rates.
Regarding encroachments of its properties, EOBI says it is cognisant of the issue but added that because the law enforcing agencies are slow to respond hence efforts will take time to yield results.
Published in The Express Tribune, June 29th, 2012.
In one of the most controversial deals made by Employees Old-age Benefits Institution (EOBI), 40 kanals of land of mauzia (village) Shejpal in Lahore was purchased at a whopping Rs1.43 billion – a price tag believed to be some 300 per cent higher than the actual worth.
Sources told the Express Investigation Cell (EIC) that EOBI struck the deal with a real estate company known as Asset Management Firm in September 2011. Independent evaluation suggests that the price paid by EOBI is 300 percent higher than actual market rates in the area, while the architect of the deal showed residential land as commercial to justify its steep price.
The primary question coming forward is why EOBI did not seek the approval of its board of trustees (BoT) before signing a deal and releasing such a large amount of cash. Asset Management Firm itself is an unknown name in real estate market of Lahore – and an official of the Lahore Cantonment Board says they have no track record of the firm. A senior official of Lahore Cantonment Baord told EIC on the condition of anonymity that the board had never heard of “Asset Management Firm” before the registration of the Shejpal land deal.
However, EOBI chairman Zafar Gondal defended the deal, claiming that it was approved by the BoT. But a letter of the ministry of human resource development, dated May 28, 2012, addressed to Gondal himself, contradicts the claim. It reads: “The minutes of 169th to 189th meetings of investment committee should not be treated as approved by the BoT of EOBI.”
EOBI manages a huge fund collected from the private and public sector organisations, and its management is required to strictly follow procurement rules to ensure transparency in any deal. BoT approval is mandatory for EOBI to purchase any property from any public sector organisation, while rules strictly bar any purchasing of land/assets/shares from a private firm or company.
Moreover, while EOBI is trying to buy questionable land, its prime properties in Lahore are being occupied by land-grabbers, against whom no action has been taken.
The activities of the current chairman have already been brought to the attention of the president and prime minister by a former board member who was thrown out because of his refusal to be a part of the plunder. Syed Imran Ali Shah, a board member, cited many cases of corruption under Zafar Gondal – who is the brother of Pakistan Peoples Party (PPP) central leader Nazar Gondal – but has been ignored thus far.
EOBI says that it has done nothing wrong. Pointing out that the land has been purchased with due approval of the Investment Committee and Board of Trustees, it says the land was evaluated by M/s Dimen Associates (Pvt) Limited.
It also refutes the claim that the land is not commercial – saying that the Lahore Cantonment Board has certified it as such – and has also rubbished questions being raised over the location of the land. It said that the Lahore Cantonment Board has determined land value of all properties having frontage on ring road to be Rs13.23 million per kanal adding that the property in question is in fact uniquely located at the interchange. Saying that the deal was an excellent purchase, EOBI also stated that it was looking for additional purchases of adjoining properties for higher rates.
Regarding encroachments of its properties, EOBI says it is cognisant of the issue but added that because the law enforcing agencies are slow to respond hence efforts will take time to yield results.
Published in The Express Tribune, June 29th, 2012.