St James’s Hotel: Parliamentary committee seeks details on Mansha’s investment
Also wants NAB to expedite inquiry into MCB privatisation
PHOTO: ST JAMES'S HOTEL WEBSITE
ISLAMABAD:
A parliamentary committee on Wednesday sought details of the $75 million-investment by billionaire Mian Mansha in Saint James’s Hotel, London, besides asking the anti-corruption watchdog to expedite inquiry into alleged irregularities in the privatisation of MCB Bank.
The Senate Standing Committee on Finance directed the State Bank of Pakistan (SBP) to furnish details whether the Nishat Group remitted $75 million for acquisition of the five-star St James’s Hotel through proper channels.
The issue was raised by Senator Talha Mehmood of JUI-F.
Mansha, who is among the top five richest people in the country, acquired the boutique hotel in 2010 at a price ranging between $85 million to $95 million, according to the Forbes Magazine.
The SBP is authorised to give permission to invest up to $5 million abroad, while the Economic Coordination Committee (ECC) of the Cabinet gives approval for making investments above that threshold, said SBP Governor Ashraf Wathra.
Wathra said that he did not have information about whether the group obtained ECC’s approval.
The summary for seeking such an approval is submitted by the SBP through the Ministry of Finance to the ECC.
The MCB deal
Presided over by Senator Saleem Mandviwalla, the standing committee also showed its displeasure over the manner the National Accountability Bureau (NAB) was handling the case of alleged irregularities in the privatisation of
MCB. The committee directed the anti-corruption watchdog to submit status of the inquiry on a monthly basis, asking it to take the case to a logical end at the earliest.
In 1991, Nawaz Sharif’s administration had sold 75% stakes in MCB to Mian Mansha at a price of Rs2.42 billion.
The accountability bureau on Wednesday submitted a brief on the privatisation deal. According to its brief, NAB’s 2002 inquiry established that sponsored directors of the MCB submitted a fake bid bond. The bid bond was a pre-requisite for joining the bidding process. It added that the sponsored directors also used MCB funds in making payments for the acquisition of shares, which resulted in substantial losses to the bank in terms of rightful income.
“The initial requirement to deposit a bid bond of Rs100 million was allegedly arranged by Hussain Lawai in his capacity as Country General Manager of Faysal Islamic Bank of Bahrain,” according to the brief.
Furthermore, a loan of Rs838.8 million was also arranged by Lawai for buyers to pay the first installment allegedly in violation of the rules and without obtaining sufficient securities, it added.
However, NAB Director General (DG) said that the anti-corruption watchdog cannot take action on the basis of the inquiry report of 2002. From July 1, NAB launched a fresh inquiry, the DG said.
He said witnesses and accused persons have also been summoned including Lawai who denied any wrongdoing in the deal.
Senator Saeed Ghani suspected that NAB was only gaining time and was not keen on taking action.
“It has been established from the committee’s proceedings that NAB was biased and extending favours to MCB owners,” said the committee chairman Senator Mandviwalla. The NAB official denied the allegation.
The SBP governor also said that although the previous inquiry established irregularities, record of the case showed that it was difficult to prove any wrongdoing. He said any adverse decision against the MCB privatisation deal would also hurt the government’s privatisation programme.
Published in The Express Tribune, July 30th, 2015.
A parliamentary committee on Wednesday sought details of the $75 million-investment by billionaire Mian Mansha in Saint James’s Hotel, London, besides asking the anti-corruption watchdog to expedite inquiry into alleged irregularities in the privatisation of MCB Bank.
The Senate Standing Committee on Finance directed the State Bank of Pakistan (SBP) to furnish details whether the Nishat Group remitted $75 million for acquisition of the five-star St James’s Hotel through proper channels.
The issue was raised by Senator Talha Mehmood of JUI-F.
Mansha, who is among the top five richest people in the country, acquired the boutique hotel in 2010 at a price ranging between $85 million to $95 million, according to the Forbes Magazine.
The SBP is authorised to give permission to invest up to $5 million abroad, while the Economic Coordination Committee (ECC) of the Cabinet gives approval for making investments above that threshold, said SBP Governor Ashraf Wathra.
Wathra said that he did not have information about whether the group obtained ECC’s approval.
The summary for seeking such an approval is submitted by the SBP through the Ministry of Finance to the ECC.
The MCB deal
Presided over by Senator Saleem Mandviwalla, the standing committee also showed its displeasure over the manner the National Accountability Bureau (NAB) was handling the case of alleged irregularities in the privatisation of
MCB. The committee directed the anti-corruption watchdog to submit status of the inquiry on a monthly basis, asking it to take the case to a logical end at the earliest.
In 1991, Nawaz Sharif’s administration had sold 75% stakes in MCB to Mian Mansha at a price of Rs2.42 billion.
The accountability bureau on Wednesday submitted a brief on the privatisation deal. According to its brief, NAB’s 2002 inquiry established that sponsored directors of the MCB submitted a fake bid bond. The bid bond was a pre-requisite for joining the bidding process. It added that the sponsored directors also used MCB funds in making payments for the acquisition of shares, which resulted in substantial losses to the bank in terms of rightful income.
“The initial requirement to deposit a bid bond of Rs100 million was allegedly arranged by Hussain Lawai in his capacity as Country General Manager of Faysal Islamic Bank of Bahrain,” according to the brief.
Furthermore, a loan of Rs838.8 million was also arranged by Lawai for buyers to pay the first installment allegedly in violation of the rules and without obtaining sufficient securities, it added.
However, NAB Director General (DG) said that the anti-corruption watchdog cannot take action on the basis of the inquiry report of 2002. From July 1, NAB launched a fresh inquiry, the DG said.
He said witnesses and accused persons have also been summoned including Lawai who denied any wrongdoing in the deal.
Senator Saeed Ghani suspected that NAB was only gaining time and was not keen on taking action.
“It has been established from the committee’s proceedings that NAB was biased and extending favours to MCB owners,” said the committee chairman Senator Mandviwalla. The NAB official denied the allegation.
The SBP governor also said that although the previous inquiry established irregularities, record of the case showed that it was difficult to prove any wrongdoing. He said any adverse decision against the MCB privatisation deal would also hurt the government’s privatisation programme.
Published in The Express Tribune, July 30th, 2015.