State Bank unveils 50 defaulters

Published: October 21, 2010
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Chief justice says 
defaulters will be put on exit control list

Chief justice says defaulters will be put on exit control list

ISLAMABAD: “Those who had their loans written off have built empires. If they don’t pay back the loans, their names should be put on the exit control list (ECL) and they be put behind bars,” Chief Justice Iftikhar Muhammad Chaudhry said on Wednesday while hearing a suo motu case regarding the Rs54 billion bad loans.

The State Bank’s counsel, Iqbal Haider, produced a list of 50 companies and individuals who had their loans waived before a three-member bench of the Supreme Court.

Barrister MS Baqir apprised the court that Indus Sugar, a company owned by former parliamentarian and chief whip of the PML-Q Nasrullah Dareshak, had Rs820 million in loans written off through eight different banks upon which, the court summoned Dareshak to the court on Wednesday.

“Isn’t the new State Bank governor interested in getting the money back?” Justice Ramday questioned, in response to which Iqbal Haider said that he would convey the court’s concerns.

“Do you still want to defend the written-off loans or do you want to get the money back?” the chief justice asked Haider to which Haider submitted that he was only defending the the State Bank’s circular.

“You have a very effective law available. We are here to assist you in getting the money back, but the State Bank hasn’t come forward,” the chief justice observed.

Dismissing the impact of the court’s orders on the national economy, the chief justice said: “If you are unable to get this money back, we will do it ourselves.”  Senior lawyer Abdul Hafeez Pirzada contended that the current government had written-off loans worth Rs50 billion without any authority, adding that the move was also endorsed by the executive director of the State Bank, Inayet Hussain.

Hussain, who attended the hearing, said that the loans had been waived over the past two years and that it was part of an ongoing scheme.

Haider said that the ratio of written-off the loans in Pakistan is 1.3 per cent, whereas in Britain, it varies between five and seven per cent, adding that State Bank had issued a total of 33 circulars since 1972 to 2007.

The chief justice directed him to appear for the case along with the entire record.

Later, while adjourning the hearing, the chief justice directed the State Bank’s counsel to ask the beneficiaries of the loan write-off to pay the loans back and, if they wished, to defend their positions.

When Iqbal Haider submitted that the State Bank did not have the details of the companies and individuals concerned, the chief justice remarked that if the banks concerned did not share the information, their licences should be canceled and the list containing names of defaulters should be published in newspapers.

The chief justice warned that if they did not pay their loans back, their properties should be confiscated and auctioned and they should be put behind bars in Adiala Jail.

Published in The Express Tribune, October 21st, 2010.

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Reader Comments (10)

  • Aftab Kenneth Wilson
    Oct 21, 2010 - 8:40AM

    Nothing more or nothing less, we want their names with details of their companies for which they got these loans. Let the public know who are these men and women who ate such huge amount.Recommend

  • Syed A. Mateen
    Oct 21, 2010 - 9:11AM

    Each and every person who has taken loan from the bank and has not returned the loan to the respective bank should be put on the exit control list.

    The parliament should pass a bill in which powers to wave-off loans of defaulters should be withdrawn, no matter which office a person is holding.

    Even the President and the Prime Minister should not wave-off loans of defaulters as it was tax payers money and should be recovered from the defaulters by selling defaulters assets through public auction.

    The dream of Quaid-e-Azam Mohammad Ali Jinnah was to make Pakistan a welfare state. Pakistan was never meant for few families to enjoy; neither was it created that an ordinary man and his generation should suffer for decades.

    If the entire money given to defaulters is deposited to the respective banks and the money which people took out from Pakistan and deposited in foreign countries should also be brought back to Pakistan.

    If the entire money eaten up by few hundred families is brought back in the country, Pakistan will be able to refund the loans taken by IMF and World Bank in one go.Recommend

  • khan
    Oct 21, 2010 - 9:53AM

    Saddruddin Gangji and Hasham A.H. Gangji of the West Pakistan Tank Terminal (Pvt) Ltd got a loan of Rs1.9 billion written off by the Allied Bank Limited in 2005;
    Younus Habib, the main character in the Mehran Bank scam, got Rs2.4 billion waived by the Habib Bank Limited in 1997;
    Mohib Textile Mills (Pvt) Ltd of the Saigol family, got a Rs1.1 billion loan written off by the National Bank of Pakistan in 2002;
    Mian Muneer Ahmed of the Firdous Spinning and Weaving Mills Ltd’s Rs780 million loan was written off by the HBL in 2005;
    Bayindir Insaat Turizm Ticaret’s Rs734 million loan was written off by the ABL in 2008;
    Glamour Textile Mills Ltd of Lahore got a loan of Rs533 million written off by the NBP in 2002.

    Hmm…all upright urban middle-class business types so far. Oddly I noticed only one ‘feudal‘ on the list so far: one Nasrullah Dareshak who had “Rs820 million in loans written off through eight different banks”. If memory serves me right Dareshak was Ch. Pervez Ellahi’s key sidekick and chosen operative for south Punjab. God bless those hard working Chaudhries from Gujrat without whom Punjab would have collapsed by now. Maybe I meant Punjab Bank…Recommend

  • Shahrukh Salman
    Oct 21, 2010 - 10:12AM

    Its sad to see how the rich and greedy have been milking our country dry, and how the banks have become so co-operative with them. A commoner is harassed to the extent of contemplating suicide for a paltry sums of Rs. 100,000/- by these banks (my own example quoted) whereby these very same banks let the greedy get away with so much money. I’m encouraged by the way our justice system is tackling these thieves and I hope that the banks involved are heavily fined and punished as well. I hope that these scoundrels are dealt with all the way to the end.Recommend

  • khan
    Oct 21, 2010 - 10:33AM

    According to today’s daily (Y)AWN:
    “Saddruddin Gangji and Hasham A.H. Gangji of the West Pakistan Tank Terminal (Pvt) Ltd got a loan of Rs1.9 billion written off by the Allied Bank Limited in 2005;
    Younus Habib, the main character in the Mehran Bank scam, got Rs2.4 billion waived by the Habib Bank Limited in 1997;
    Mohib Textile Mills (Pvt) Ltd of the Saigol family, got a Rs1.1 billion loan written off by the National Bank of Pakistan in 2002;
    Mian Muneer Ahmed of the Firdous Spinning and Weaving Mills Ltd’s Rs780 million loan was written off by the HBL in 2005;
    Bayindir Insaat Turizm Ticaret’s Rs734 million loan was written off by the ABL in 2008;
    Glamour Textile Mills Ltd of Lahore got a loan of Rs533 million written off by the NBP in 2002.”

    Hmm…all upright urban middle-class business types so far. Oddly I noticed only one ‘feudal‘ on the list so far: one Nasrullah Dareshak who had “Rs820 million in loans written off through eight different banks”. If memory serves me right Dareshak was Ch. Pervez Ellahi’s key sidekick and chosen operative for south Punjab. God bless those hard working Chaudhries from Gujrat without whom Punjab would have collapsed by now. Maybe I meant Punjab Bank…Recommend

  • PK
    Oct 21, 2010 - 12:28PM

    The Supreme Court has gone mad. Loan write offs by banks is standard practice all over the world. Does the chief justice not realize that many businesses fail. Other than the cases of politically sanctioned loans and writeoffs, businesses take loans in order to facilitate their expansion. When a business fails the owners lose all their equity that they have piled into that business. Isn’t that enough punishment, that they lose all their investment. Unfortunately the mob justice mentality that now exists in the Supreme Court wants that all defaulters should lose all their possessions in order to pay off their loans. This is un islamic, in fact not even in the secular west do such practices exist. In all developed economies, if a business fails, the banks at a maximum can take over the business and get the proceeds from its sale. If the proceeeds from the sale of the business are less than the loan amount, the banks will take a write off. If you penalize your entrepreneurs with such draconian laws, who will take risks in this country with their capital. Unfortunately the Supreme Court chooses to go after the wrong target. Instead of targeting the corrupt politicians, bureacrats, army officers etc. it is far easier to go after a soft target, unfortunately the wrong target. The only viable sector in this economy are the private business and agriculture sector. The vultures sitting in various government positions are left untouched. It’s corruption that is eating this country alive, not the private sector. The private sector generates all the taxes and revenues collected by the government. Railways, PIA, Wapda and all other public sector organizations lose billions every year. What about the total anarchy being spread in our society due to a completely corrupt judiciary which releases all criminals. There is a less than one percent conviction rate, rapists, murderers and dacoits all know that even if they are caught they will easily get out by bribing the judge. Why doesn’t the Supreme Court go after these judges.Recommend

  • Umar Farooq
    Oct 21, 2010 - 12:34PM

    Such nonsense to compare the corrupt Pakistani loan write offs by comparing it to Britain by saying that between five and seven per cent are written off. While loans in UK are written off, they are done after great due diligence and often after the lender has filed for bankruptcy. They aren’t written off every time there is a change in political administration like in Pakistan.

    Even after huge loan write offs in Pakistan, the guilty continue to lead lavish lives. Somebody should put a stop to this NOW! Recommend

  • ABDUL NASIR SAGGU
    Oct 21, 2010 - 12:42PM

    State Bank of Pakistan is in-effective like other organs of state/institutions. State Bank always failed to take proper regulatory action on appropriate time on important issues.Banks in Pakistan always played a negative role in order to achieve their commercial goals. Who is responsible ? Definitely State Bank, who is a regulator and controller of Banks Recommend

  • Amanat ali
    Oct 21, 2010 - 1:31PM

    The list should be published so we see who are these peoples destroying the economy. So sad and astonishing that SBP have no information of persons and companies who write-off loans. SC should take strict action. Till now the performance of SC is not good because no case has yet been final and accused be punished. Not so hopeful that these loans could be get back.Recommend

  • amjad
    Oct 21, 2010 - 9:20PM

    If it takes judiciary to expose the defaulters, so be it. For Pakistan to move forward it is important that the looters be brought to shame, their ill-gotten wealth cofiscated and if these culprits are politicians they need to be banished from power. Start from the one who has stolen the most and go down, to be fair, include politicians, generals, judges, mullahs and industrialists. No one should be excluded. It is about time this country join civilized world. No excuses please!!!!!!!Recommend

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