SBP denies giving go-ahead for $75m investment

Published: November 25, 2015
The committee decided to summon FBR officials before making any recommendation pertaining to non-declaration of the hotel in wealth statements. PHOTO: SAINT JAMES’S HOTEL WEBSITE

The committee decided to summon FBR officials before making any recommendation pertaining to non-declaration of the hotel in wealth statements. PHOTO: SAINT JAMES’S HOTEL WEBSITE


A lawmaker has raised fears of money laundering after the central bank declared that it had not initiated any process for granting permission to a billionaire for remitting $75 million for the purchase of Saint James’s Hotel in London as the deal has already been sealed.

“The State Bank of Pakistan (SBP) neither gave any permission nor initiated a case for approval of the Economic Coordination Committee (ECC),” Irfan Ali, Director Banking of the SBP, told the Senate Standing Committee on Finance and Revenue on Tuesday.

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In July this year, the Senate committee had directed the SBP to furnish details whether the Nishat Group remitted $75 million for acquisition of the five-star hotel through proper channels. Billionaire Mian Muhammad Mansha had purchased the hotel in 2012 for $75 million.

Ali said the SBP had powers to give permission for investment up to $5 million abroad and initiate the case for approval of the ECC, if the investment is over $5 million.

Making investment abroad without the central bank’s green signal was a serious issue and could raise concerns of money laundering, commented Senator Saeed Ghani of the Pakistan Peoples Party, who is a member of the standing committee.

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Ghani also presented a notice of the Federal Board of Revenue (FBR), which was sent to Mansha. The FBR apparently moved against Mansha after the standing committee took up the issue and it served the notice on August 21.

“This office has credible information that your family has purchased St James’s Hotel and Club, an internationally famous and luxurious five-star hotel with 60 rooms/suites located at 7-8 Park Place, London. This property has reportedly been purchased from Mountain Capital in November 2012 through Savills and Gerard Nolan & Partners for a total price of 60 million British pound equivalent to around Rs9 billion,” reads the notice.

It adds, “tax declarations, including the prescribed wealth statements of your family members, do not reflect this property for the tax year relevant to the date of purchase. This omission reflects that the investment has apparently been made out of income which has not been subjected to tax in Pakistan.”

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The standing committee decided to summon FBR officials in the next meeting before making any recommendation to the government pertaining to non-declaration of the hotel in wealth statements.

MCB Bank sell-off

Presided over by Senator Saleem Mandviwalla, the standing committee also expressed its displeasure over the manner the National Accountability BureaAu (NAB) was handling the case of alleged irregularities in the privatisation of MCB Bank. NAB Rawalpindi Director General Zahir Shah disclosed that he was twice approached by Mansha, who had purchased the bank, but he refused to meet him.

He said this in response to the criticism that NAB was too soft and was not keen to complete investigations into allegations that MCB Bank was bought with the money of its depositors.

In 1991, the Nawaz Sharif government had sold 75% stake in MCB Bank for Rs2.42 billion.

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In the previous meeting of the standing committee, NAB had submitted a paper that said its 2002 inquiry established that sponsor-directors of MCB Bank had submitted a fake bid bond.

It added the sponsor-directors also used MCB funds for making payments for the acquisition of shares, which led to a substantial loss to the bank in terms of rightful income.

However, the NAB DG said the anti-corruption watchdog could not take action on the basis of the 2002 inquiry report. In July, NAB launched a fresh probe, but he did not give a timeframe when the process would be completed.

Published in The Express Tribune, November 25th, 2015.

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Reader Comments (5)

  • Nov 25, 2015 - 9:18AM

    We love to live in the travails of the past. How much time, money, and energy is wasted? Countless! MCB’s privatization is a ‘dead issue.’ Pakistan does not have the internal economic and legal muscle to expropriate what was privatized.
    There is the continual decline in the quality of governance and this is what is depriving citizens of their inviolable right to prosper. It has become a game of ‘smash and grab.’ SalamsRecommend

  • PakPower
    Nov 25, 2015 - 2:00PM

    Masha and ‘noon’ – the same story over again.Recommend

  • Parvez
    Nov 25, 2015 - 4:20PM

    When Zardari can be acquitted of corruption charges…….raising pointless stuff like this that will go nowhere is……pointless.Recommend

  • Usman
    Nov 25, 2015 - 7:47PM

    NAB is a toothless waste of space that is powerless to bring any investigation to conclusion.Recommend

  • Imran Qadri
    Nov 25, 2015 - 9:14PM

    PPP controlled senate standing committee is settling scores and personal vendetta against Nishat group just because they are well known ruling party’s supporter. They just want to distract everyone from corruption of their boss Mr Zardari.

    PPP senators recently moved a resolution in senate which demanded blue passport and other perks and privileges for children and spouse of even former members of parliament for lifetime. Recommend

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