Accountability may be the main question as the people accused of causing Rs18.5 billion losses in operations of National Bank of Pakistan’s (NBP) Bangladesh branch are being shielded by the bank’s top management.
The NBP is reluctant to charge sheet its former president, Syed Ali Raza, who is among “61 delinquent employees” that the KPMG audit report found responsible for the colossal loss of Rs18.5 billion, reveals a correspondence between the central bank and the NBP.
Raza occupied NBP’s top post for over 11 years - the period when the Bangladesh operations had gone haywire.
The management of NBP has ignored even a letter written by the Off-site Supervision and Enforcement Department of the State Bank of Pakistan (SBP).
In its May 28 letter, the SBP writes, “it has been observed that the name of Syed Ali Raza, former NBP president, is not mentioned in the (NBP progress) report”.
The SBP letter further states Raza was not charge sheeted “despite the fact that in the minutes of the NBP’s 241st Board of Directors meeting, Raza was identified among 44 employees of the head office who were to be issued charge sheets based on forensic reports”.
Sources in NBP said that friendship between former president and the incumbent one, Iqbal Ashraf, is the main reason behind the bank’s decision not to charge sheet Ali Raza. The NBP’s inquiry officer, who is dealing with the Bangladesh scam, was also under pressure to give a clean slate to Raza and half a dozen other accused persons, they added. The supervision department had asked the NBP to confirm within five days that Raza had been charged sheeted.
However, it seems that the NBP does not care even what the country’s top regulator says. “The SBP is in communication with NBP on this issue and the matter is still being discussed”, said Abid Qamar, the spokesman of the central bank, adding that at this point sharing any information in this regard would be premature.
“We ensure that SBP will come forward at a suitable time and share information once a conclusion is arrived at”, he said.
What caused the commotion
In January 2014, The Express Tribune had reported the Bangladesh scam. After that, the NBP hired KPMG for a forensic audit. The KPMG forensic audit report held 61 officials responsible for the loss of Rs18.5 billion in Bangladesh operations including Syed Ali Raza. NBP charge sheeted 57 of the 61 employees accused.
In February this year, the National Assembly Standing Committee on Finance referred the matter to the National Accountability Bureau to catch the culprits and recover the money. However, there is no significant progress on this front as well.
“The matter is still under inquiry,” said a spokesman of the NAB.
In December last year, the Economic Coordination Committee of the Cabinet approved a $65 million equity injection in the NBP Bangladesh operations after the Rs18 billion losses eroded its equity.
On June 30, The Express Tribune contacted the NBP for a version. However, after using delaying tactics for a week, the NBP finally refused on Monday to comment as why it was not initiating action against Ali Raza.
The SBP has also taken up the issue of unlawful payment of five and half month salary and remuneration package to the former president for a period he never served. In its letter, the SBP asked the NBP to either get the approval of the shareholders by convening an extra ordinary general meeting for seeking approval of the payment or get the money recovered from Raza.
NBP did not respond to the question whether it recovered the amount from Raza or not.
In January 2011, the Supreme Court of Pakistan declared the appointment of former president Syed Ali Raza unlawful and unconstitutional.
However, headed by Muneer Kamal, the board of directors in April and December 2014 took the decisions of paying end-service benefits and salary for the remaining five and a half months of the service contract. Not only that, the board also approved payment of interest on delayed salary until March 30, 2015.
Raza received a total of Rs90.6 million, of which Rs39.4 million or 44% is for the period he was not the bank president, showed the NBP documents.
The former president has defended the decision of receiving the payments.
Published in The Express Tribune, July 7th, 2015.
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