Country’s bigwigs get banks to write off their loans

Privileged among previous, incumbent govts facilitated

ISLAMABAD: An estimated Rs20 billion in loans were waived off by more than 30 banks between 2012 and 2014 to facilitate the privileged among the previous and incumbent governments, causing a massive loss to the public exchequer, The Express Tribune has learnt.

A list comprising bank-wise summary of the written-off loans – available with The Express Tribune – revealed that around 2,000 customers have seemingly used their influence for the banks to forget the large sum of money owed to the financial institutions.

This happened a couple of years after the State Bank of Pakistan (SBP) informed the Supreme Court that the bigwigs of the country had got loans worth Rs403 billion written off on the decisions of the financial teams of various governments between 1997 and 2009. The case is still pending in the apex court.

One of the major beneficiaries of the loans waived off between 2012 and 2014 was Azad Jammu and Kashmir President Sardar Yaqoob Khan. The premier’s Kashmir Polypropylene’s loans worth Rs9.009 million were waived off in 2012, a year after he came to power. His press secretary, Bisharat Mehmood, confirmed the waiver but stressed that there was no political pressure on the bank. “His loans were written off just like any other customer’s, as per the bank policy.”

Abdul Hafeez Pirzada’s Indus Valley got Rs105.7 million waived off. The late PPP MNA Ghulam Mustafa Shah’s Larr Sugar Mills got Rs73 million written off in 2013.

MNA Awais Leghari and MPA Jamal Leghari’s Dera Ghazi Khan Oil got Rs3.67 million waived off in 2012. “No principal write-off loan has been allowed. Only waiver of memo mark-up/other charges were allowed under the negotiated settlement,” said Awais Leghari.



Mandviwala Plastic Industries got Rs14.6 million written off in 2012. PPP Senator Saleem Mandviwala, Azeem Mandviwala, Nadeem Mandviwala, Shireen Mandviwala, Ali Mandviwala and Qalbe Abbas Dharamsey are on the company’s board of directors.

“Banks always write off customers’ loans. It’s not a crime,” said Senator Mandviwala. “My business shut down, which is why our legal position was strong to justify our claim.” Leading construction company Habib Rafiq (Pvt) Limited got Rs26.539 million waived off. Muhammad Habib, Rafiq Ahmed, Khalid Rafiq, Shahid Rafiq and Sajid Rafiq are joint owners of the company. The company’s spokesperson argued that the business was not in a position to clear the outstanding liability. “Therefore, the account was settled through a debt swap arrangement by acquiring the borrowers’ property.”

Bachani Sugar Mills of PPP MNA Abdul Sattar Bachani got Rs22 million written off. “Private banks always waive off loans on merit,” he said. “It’s a fair dealing. No favour was involved.” PPP Senator Farhatullah Babar demanded that the government review its policy of waiving off loans by the central bank. “There should be fresh legislation to improve the banking system in the country. The new banking policy, under fresh legislation, must treat all customers equally.”



Published in The Express Tribune, August 24^th, 2015.