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Rs18.5b scam: NAB arrests ex-NBP president Ali Raza

Rs18.5b scam: NAB arrests ex-NBP president Ali Raza

ISLAMABAD: The National Accountability Bureau (NAB) arrested former National Bank of Pakistan (NBP) president Ali Raza in a graft case on Friday and after the Sindh High Court (SHC) set aside his and six others’ pre-arrest bails.

The court was hearing the case of a Rs18.5 billion scam in the NBP Bangladesh operations. The NAB prosecutor told the court that Raza, during the time of the scam, was not only the president of the bank but also the chairman of its board of directors, the head of its audit committee and the human resource department chief.

He added that the 2009 audit report of the bank had revealed irregularities and the State Bank of Pakistan too had complained about corruption in the NBP’s affairs.

The prosecutor further told the court that apart from Raza, NBP officials including Imran Butt, Ibrar Beg, Imran Ghani and some Bangledeshi citizens too were involved in the scam.

The court ordered the arrest of Raza and the six others in the case. However, it upheld the pre-arrest bails of two other co-accused Qamar Hussain and Kausar Malik.

According to NAB, the Bangladesh branch of NBP lent $185 million without securing collaterals to dubious companies between 2003 and 2012.

The misappropriation was estimated at around Rs11 billion, which later swelled to Rs18.5 billion. Before January 2014 and even after that, the top management of NBP tried to hush up the matter, as few high officials were directly involved in the scam.

In February 2015, the NA standing committee, headed by Omar Ayub Khan of the PML-N, referred the matter to NAB for further probe. The current chairman of the committee, Qaiser Ahmed Sheikh, also kept the issue alive.

The NAB investigation will be the sixth such probe, as NBP has completed four inquiries while one was conducted by the chartered accountant firm KPMG. In its forensic audit, KPMG found that “61 delinquent employees” were prima facie involved in the scam. Many of them were directly responsible and some were responsible due to their administrative positions.

These people were posted in Bangladesh branches, the regional office in Bahrain and the head office in Karachi.

“The Bangladesh operation appears to have started facing problems from 2007, when branches initially reported non-performing loans/advances, although the initial trigger was seen in 2003,” said the KPMG report.

A total of 19 triggers were sent to the head office from 2003 to 2012 but no action was taken, it added.

Last year, NAB authorised investigations into the conduct of some officers of NBP who were accused of abusing their powers in the processing and sanctioning of credit limits, wilfully avoiding proper valuation of securities offered by borrowers and causing losses of $185 million to the national exchequer. Later, it had filed a reference with the court.