950808

Al-Hussainy shares scandal

NBP regional chief

admits of procedural

lapses by officials

RECORDER REPORT

LAHORE: National Bank of Pakistan (NBP) regional chief executive Saeed Ahmad Islahi has said that bank officials could only be claimed for some procedural and administrative mistakes in the Al-Hussainy fake shares scandal.

Addressing press conference on Tuesday, at the NBP Regional Headquarters of the bank Saeed Ahmad Islahi said there had been negligence on the part of officers who did not verify the share deeds while pledging the shares against loans worth Rs 12.537 million in May 1992.

The bank had accommodated M/s Al-Hussainy Group through various financing facilities including subsidized loan under SBP Scheme of LMM & working capital facilities by way of cash finance against pledge/hypothecation of stocks as per Prudential Regulations. The family members like Ahmad Dawood, Al-Hussainy and Raza Mobeen (the latter introduced to the bank by the former) and their family project known as Al-Hussainy Vegetable Ghee Mills, Joharabad, were also accorded running finance facilities against pledge of the shares of M/s ICI (Pak) Ltd which is a multi-national company and their shares are taken as blue chips.

"The acceptance of ICI shares has a past history and they were first time accommodated at NBP: Davis Road Branch, Lahore, during the year 1992 when I was posted at Head Office, Karachi, and had nothing to do with the approval of facility to Ahmad Dawood, one of the family members of the above group. Subsequently when these shares showed bullish trend, a good number of pledged shares were got released by the borrower which we understand were redeposited with Fidelity Bank for grant of facility from them", Ahmad Saeed Islahi said.

Since the ghee mill remained non-operatioanl further running finance facility of Rs 10.000 million was allowed to them at NBP Industrial Zone Gulberg Branch, Lahore, as the project was financed by the bank. The shares already deposited with Davis Road Branch/Timber Market Branch, Lahore, were got released and repledged at Industrial Zone Gulberg Branch, Lahore. Before the grant of facility at Industrial Zone Gulberg Branch, Lahore running finance account of Ahmad Dawood was transferred at his request during 1992 to NBP Timber Market Branch, Lahore, from where the shares were subsequently got released by the borrower himself for redepositing the same with Fidelity Bank and then with NBP Industrial Zone Branch, Gulberg, Lahore, Islahi said.

Very recently bank managers took up the matter with M/s ICI (Pak) Ltd asking them to send right shares to NBP bank after declaration of dividend when it surfaced that the said shares were fake. The bank lodged FIRs with the FIA, he said: "It is unfortunate that in certain news-papers the forgery committed by the above group/family has been blown out of the porportion and names of our bank and our senior executives have been maligned. Such bid invites a case of defamation. "This attempt can simply be described as character assassination of the established bankers and elites of the banking industry," he remakred.

The main culprit Ahmad Dawood who is in the custody of the FIA Agency has admitted that he is the sole author of what is termed by the investigators, a fraud of its own kind, Islahi said.

He said the branch managers have failed to follow the standard procedure laid down by the bank and we are sorting it out through internal enquiry for taking disciplinary action against them.