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Archive for category Corruption in Islamic Countries

Despite $100m investment offer, why was KASB Bank sold for Rs1,000? The Express Tribune, Pakistan

Despite $100m investment offer, why was KASB Bank sold for Rs1,000?

PHOTO:FILE

PHOTO:FILE

ISLAMABAD: Senior officials of the State Bank of Pakistan took harsh action and “misused their authority” in amalgamating KASB Bank into BankIslami for just Rs1,000, reveals an inquiry report of the National Accountability Bureau (NAB).

The report further disclosed that BankIslami was not capable of handling the now-defunct KASB Bank without the central bank’s financial support. Moreover, the central bank’s decision to award KASB Bank’s due-diligence contract to AF Ferguson, a chartered accountancy firm, was an “illegal act”.

“Officers of the SBP and others misused their authority to refuse foreign investment of $100 million in KASB Bank and favoured BankIslami Limited by amalgamating it at a token price of Rs1,000 only,” according to inquiry findings.

The Cybernaut Investment Group of China had offered up to $100 million investment to bridge the capital shortfall faced by KASB Bank, but the SBP rejected the offer.

The assets of the defunct KASB Bank were not valued at market rate, according to the inquiry. At Rs1,000, BankIslami got billions of rupees in assets, it added. Not only that, BankIslami also got Rs5.8 billion as deferred tax that benefitted its balance sheet.

Investigators have now recommended the NAB headquarters to order an investigation. The inquiry report had been submitted in December last year.

NAB spokesman Nawazish Ali Asim did not respond to questions regarding the next step in the case. The SBP spokesman’s response was also awaited, although in the past the central bank has defended its action of amalgamating the bank, saying it had the legal mandate.

On May 7, 2015, the SBP merged KASB Bank into BankIslami after the former could not meet the statutory paid-up capital requirement of Rs10 billion. The now-defunct bank was facing capital shortage since 2009, although it had a sound deposit base, which the NAB inquiry also confirmed.

There was no point in merging KASB with BankIslami, as other remedies were also available with the SBP, according to the inquiry report. It added the amalgamation was a harsh step on part of the SBP, which nullified billions of rupees investments of KASB shareholders.

The NAB inquiry further noted that the Rs20 billion as financial assistance could also have been provided to KASB Bank by appointing administrator and changing the board.

“The SBP has committed offence of misuse of authority as envisaged in Section 9(a) (iv) of NAO Ordinance, and investigation may be authorised against the accused persons,” the NAB investigators recommended to the headquarters.

“A holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices – if he by corrupt dishonest, or illegal means, obtains or seeks to obtain for himself, or for his spouse and/or dependents or any other person, any property, valuable thing, or pecuniary advantage,” reads the relevant section of NAO.

Insider trading

The inquiry report observed that the decision to amalgamate the bank with BankIslami had taken a year before the amalgamation took place. Investigators said that the Al Karam Group, Ismail Industries, owned by Miftah Ismail family, and Ali Hussain, chairman of BankIslami, started increasing their shareholding in BankIslami from April 2014. They investigators said that this is “evident from the CDC record”.

Role of AF Ferguson

The NAB also launched an inquiry against a partner of AF Ferguson and one of its directors in the same case. The chartered accountancy firm had been accused of giving a favourable report.

“The selection of AF Ferguson and signing of tripartite agreement was an illegal act of the SBP,” according to the inquiry.

A minority shareholder of the KASB Bank, Shaheena Wajid Mirzan, had alleged that by paying Rs20.5 million as consultancy fees to AF Ferguson, the SBP got a totally fraudulent valuation report from the chartered accountancy firm. She further alleged that the Rs1,000 valuation wiped out 1.95 billion shares, held by 9,000 shareholders.

Nasir Bukhari, who had 43% stake in the defunct KASB Bank, at the time also highlighted the issue of conflict of interest, saying AF Ferguson was also the auditor of SBP and BankIslami, therefore, its Rs1,000 valuation report could not be considered impartial.

The then KASB president, Bilal Mustafa, gave a statement to NAB that the SBP summoned him and forced to sign a tripartite agreement at 12 midnight with AF Ferguson and SBP for conducting KASB’s due diligence at a hefty fee of Rs20.5 million. He told NAB that the market fee of this task was hardly Rs5 million

Mustafa further told NAB that selection of AF Ferguson at exorbitant fee that too without any tender was “not understandable”.

The inquiry report revealed that the SBP also forced the KASB Board Secretary Hameedullah to change the minutes of a meeting in which directors raised concerns about paying high fee to AF Ferguson.

  

Other players

While citing a statement given by the KASB Director, Muzzafar Bukhari, the NAB report noted that the KASB authorities were in sell-off negotiations with SAMBA Bank, which backed out and the SBP official asked it to stay away from entering into any deal, revealed the report.

SBP reply to NAB

At the inquiry stage, the SBP took the position that “interest of shareholders is not the mandate and responsibility of the SBP and they are only concerned about the interest of the depositors”, revealed the report. The SBP further stated that its actions were in line with powers available to it under the Banking Companies Ordinance.

However, NAB did not accept its response, saying the KASB Bank faced no liquidity issues and was, in fact, the most liquid bank in Pakistan due to Rs20 billion of Iranian deposits.

Reply contradiction

The SBP’s reply to NAB was contrary to what it wrote in its scheme of amalgamation. “In the case of amalgamation of banking companies, the rights of shareholders are fully protected by the Banking Companies Ordinance 1962 and the Companies Ordinance 1984”, according to the documents.

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Pakistan Corruption Free Or Free For Corruption – Cartoon The Nation

Panama decision will also be a verdict on Corruption in Pakistan

Either Pakistan will be Corruption Free Or Free For Corruption

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The genesis of corruption by Tahir Kamran

The genesis of corruption
Tahir Kamran

 

June 19, 2016 

Is a corruption-free Pakistan possible?

 

 

 

A few days back, an old acquaintance asked me about the future pattern of Punjab politics in the wake of a scam as big as the Panama Leaks. I told him nothing is likely to effect any change in the existing pattern of Punjab politics. Not a single parliamentarian has raised a voice or threatened to depose the current rulers because ‘the first family’ has off-shore companies and the source of capital invested is shrouded in obscurity.
Of course it is corruption. But then isn’t that the way of life in the land of the pure? If it is an art, we have perfected it; if it is a science, we have excelled in it. More worryingly, we have accorded legitimacy to corrupt practices. In fact, we celebrate both corruption and the corrupt.
In the Victorian era, man was defined as a symbol of masculinity, white (read Caucasian) and rational with values derived from the Christian faith. If we try to define Pakistani ‘man’, corruption has to be an essential trait that he is bound to carry in order to qualify as ‘man’. He also has to be yaran da yar, (friend of friends) which means a real ‘man’ shows no respect for any law or regulation when it comes to his friends, cronies or sidekicks.
Thus in our case, violating the law or even constitution for that matter symbolises how powerful someone is. For the poor, corruption may be a means of climbing the social ladder but for the rich and affluent, corruption is the means to express power.
Another acquaintance jestingly said the other day that he has tried to make a payment of a few dollars to get his name included in the list that has emerged out of Panama Leaks. I asked him why he did that, knowing he wasn’t serious. He replied that it was a sign of ‘respectability’; it becomes damn easy to marry off a daughter to a boy from a good family if you can affirm your wealth.
Historians (particularly Edward Gibbon) have inferred from the past that when wealth becomes the principal determinant of the values that society respects, the fall of that society becomes inevitable. The same happened with the Romans and they fell, never to rise again. The generation of wealth and even more so its distribution should be carried out through mutually agreed regulations, which the Romans started flouting with impunity, and hence their fall.
For the poor, corruption may be a means of climbing the social ladder but for the rich and affluent, corruption is the means to express power.
Indeed, it needs no less than a miracle for any nation/civilization to rejuvenate itself. China can be put forth as one rare example. But it too will have to go a long way to match the sole super power, USA.
Another of my friends says, “corruption and Pakistan are like two peas in a pod”. His observation seems sweeping, yet it cannot be easily denied. The first and foremost cause of corruption was embedded in the cataclysmic event of Partition. This is depicted in the relevant chapters from the works of Ilyas Chattha, Urvashi Butalia, Yasmin Khan and Vazira Zamindar. Such events as the partition of India are no less than the upheavals of history bringing about the tectonic shift in the established norms of sociology and culture.
As a consequence of an event of such magnitude, usually a break from the past (though selective) is intended which causes rupture in the centuries-old tradition. The process of evolution which is usually gradual and steady is markedly disrupted. Such disruptions tear the affected people apart from the socio-cultural norms and practices which have hitherto defined their collective ethos. Every one, in such a scenario, is running for life. En masse relocation and genocide, such as were concomitant to partition, gave a big blow to the sensibility that binds people together.
Many living the life of relative deprivation in united India saw Pakistan as a land of opportunities, and came to the newly-founded country for economic gains. In the newly established state of Pakistan, regulatory structures were not in place to check any arbitrary practice aiming to amass wealth or to grab property. Thus the people who could, did all that was possible to secure wealth. Partition catapulted many from rags to riches. These sort of sudden changes contravene the smooth and gradual process of evolution, which people find really hard to come to terms with.
Another cataclysmic event was secession of East Pakistan, which gave a big jolt to the morale of the people. The trust in the future of the country was considerably undermined, a ripe situation in which corruption could proliferate.
Unfortunately Pakistan’s politics, right from the outset, was marred by inconsistent transitions. One political order was substituted by the other, with the two having hardly anything in common. Hence, the transition was abrupt and instantaneous. Political compromises of the oddest kind were made merely for personal gains. Characters like Ghulam Muhammad, Iskander Mirza and Ayub Khan did not allow institutions to germinate and blossom. The will of the people was not sought, in the first place; if and when elections were held, non-political actors wielded more power than the elected ones.
Therefore, institutions remained weak and their fate uncertain. Religious ideology was deployed for self-legitimisation with disastrous consequences. In such a scenario, when state institutions were weakened beyond measure, corruption flourished rampantly.
Such political choices made by the Pakistani elite conjured up a social fabric which was amenable to practices which were corrupt to the core. I do believe that a social movement spearheaded by the intelligentsia can stall that trend. But Pakistan’s history fails to register the existence of any social movement aimed at raising awareness among the people about such an issue of wider significance. So, thus far, there is no hope for a corruption-free Pakistan.

 

 

Reference

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The Big Story that went unreported from Washington:Red Alert for Corrupt Leaders by Shaheen Sehbai

 

The Big Story that went unreported from Washington:Red Alert for Corrupt Leaders

by Shaheen Sehbai

 

 

 

 

 

 

 

 

 

 

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“EMPTY SLOGANS” – 14th August, 2015 by S Roman Ahsan

“EMPTY SLOGANS” – 14th August, 2015

by

S Roman Ahsan

 

14th August, Independence Day indeed! What do we have beside empty slogans today? Are we really independent?

 

In March this year of 2015, I got a job in an online English Newspaper. I did not give up “Together We Rise!” even then but that is beside the point. Anyhow, I was overqualified for the job but I gave my best, even working overtime. I was required to do news reporting and news-writing.

 

As the days went by, it was surprising to note that like other Urdu cable TV channels, our English newspaper was also very keen on sharing news on Bollywood movies, actors and actresses. I expressed my concern to the manager (who was much younger and inexperienced than me in fact) that I didn’t want to promote all that considering that I had been writing against showing of Bollywood movies in Pakistan. I also conveyed to him that India is attacking our borders since 2013 and you want to promote their cinema. Being a shallow person, he only said it was part of my duty.

 

That exchange of dialogue occurred towards the end of two weeks and the same evening I left the job. So my friends, are we free and independent? No, we are not. We are cultural slaves of our neighbouring Hindu country. Just turn on the TV channels and note how many TV channels are showing Indian content.

 

That reminds me further. Though I am narrating my own experiences but they are reflective of the general state of affairs. In 2008, I joined the newspaper THE NATION in the magazine section. I liked the job itself except the environment of workplace and the ugly politics that was going on.

 

I used to keep thesaurus with me on my desk while writing my stories. I would like to narrate here what happened in the initial few days. Well, the editor who was in-charge of the magazine section was standing near my desk. As I was busy, he stepped forward and said “What is that?” I said “Thesaurus”. He said “Hum tau use nai kartay” (We don’t use it). What a stupid thing to say considering use of Thesaurus is very much aligned with newspaper and magazine work.

 

The editor was a local Christian and though in my school we had a very nice local Christian as our English Teacher whose name was Robinson Qamar Javed, but the experience at THE NATION was totally opposite. He was an unsophisticated and uncouth person who was insecure himself due to the caliber of others. I could write a whole article how he used to play dirty politics. He himself was not a good storyteller and hence liked to attack others.

 

I also did some pro-Islam articles in the magazine then and the editor got further prejudiced. He knew that my writing skills were good and so he stopped editing my stories for fear that would add more glitter to my work (even though he continued editing for other members). Even my coverage of art-exhibitions was better than his.

 

My question is why did the management of THE NATION had to keep a prejudiced Christian as In-charge of magazine section? A newspaper such as THE NATION reflects our cultural and Islamic values, and a person in a key position in such a newspaper should not be a hater of Islam! He is currently still the editor of magazine section there at THE NATION by the way.

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So my friends, I just gave you another example. We have incompetent people in key positions in our organizations and we are afraid of our Islamic values. Then are we really independent? Furthermore, most people who rise (with exceptions) in Pakistan to key positions mostly adhere to unethical ways. With this system in place, can we really except to achieve overall progress?

 

Let me give you more examples. Our Mohammad Ali Jinnah founded Pakistan and he founded the newspaper DAWN as well. After 9/11, DAWN has become a mouthpiece of the imperialists. Day and night it attacks the sanctity of Islam in different ways. One of its senior columnists is Nadeem F. Piracha who is almost an atheist spreading filth through his writings. So are we really independent?

 

THE EXPRESS TRIBUNE is not behind with its shameless practices. The newspaper falls under the INTERNATIONAL NEW YORK TIMES and it is also promoting the imperialistic agenda along with promoting decadence in society. In 2011, the paper published a 6-page cover story on the rights of homosexuals in Pakistan. Trends are not any better now. So are we really independent then?

 

The above gives just a brief picture of the media but the situation is not prettier in other sectors of Pakistan. The corporate sector in Pakistan is closely aligned with international standards and following them. So if a Pakistani Corporate Guru promotes those companies that are funding Israel (either directly or indirectly), then he has not learned ethics. And he does not know the true meaning of independence either!

 

Let us not just raise EMPTY SLOGANS of “Independence”. WE HAVE TO FIGHT THE OVERALL SYSTEM IN PAKISTAN TO ACHIEVE “TRUE INDEPENDENCE”. We cannot put the whole blame on politicians and absolve ourselves. If we consider ourselves above them in talent and general acumen, then we have greater responsibility.

 

THE JOURNEY HAS TO BEGIN TODAY…

 

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p style=”text-align: center;”>WISH YOU ALL PAKISTAN INDEPENDENCE DAY!

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