Embezzlement of funds: Former KMC director remanded to FIA custody

The then finance director had withdrawn funds illegally from the KMC accounts.

KARACHI: A district and sessions court extended the physical custody remand of a former Karachi Metropolitan Corporation (KMC) director and two officials of Allied Bank Limited (ABL) till June 12 (today) over their alleged involvement in a graft case.

Mohammad Yousuf Malik, a judicial magistrate in district East, extended the remand of the then KMC finance director, Nasir Mehmood Ishaqui, the then branch manager and operations manager of ABL in Hassan Square Branch, Azhar Ali Khawaja and Saeed Ahmed Qazi, after they were produced before the court on Wednesday.

On May 30, the Federal Investigation Agency (FIA) had arrested the suspects on charges of fraud, forgery, criminal breach of trust, embezzlement and misappropriation of KMC funds invested with the ABL.

In the FIR, the FIA stated that the defunct City District Government Karachi (CDGK), now the KMC, has regularly been maintaining accounts with NBP, HBL, UBL and ABL.

A huge amount of the funds and savings was also invested with the Civic Centre and Hassan Square branches of the ABL.  The KMC official, in collusion with the bank officials, had fraudulently withdrawn over Rs1.50 billion without any lawful and legal authorisation from KMC officers.

While examining the bank statements of the accounts, the FIA had found a number of debit and credit entries which were unauthorised and illegal. The bank staff had criminally breached the trust of account holders by illegally encashing KMC's Term Deposit Receipt (TDR) and illegally transferring funds into the accounts of their accomplices.

A case was registered under Sections 409 (criminal breach of trust by public servant or by banker merchant or agent), 420 (cheating and dishonestly inducing delivery of property), 467 (forgery of valuable security, will, etc.), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document), 109 (abetment) and 34 (common intention) of the Pakistan Penal Code, read with Section 5 (2) of the Prevention of Corruption Act-II, 1947 and Section 3/ 4 of the Anti-Money Laundering Act, 2010, on a complaint of the KMC commissioner at the FIA Commercial Bank Circle, Karachi.

Published in The Express Tribune, June 12^th, 2014.