CEOs and Bankers Under Investigation for Rs 10.4 Billion Fraud
2 months ago
Seven government officials are under fire for committing fraud of Rs 10.4 billion.
Five former senior officials of National Bank of Pakistan (NBP) and two corporate chiefs are under investigation by the National Accountability Bureau (NAB) for the alleged scam.
CEO and Banking Chiefs Involved
Among the accused are Azgard-9 CEO Abid Humayun Shaikh and CFO Abid Amin. The accused also include NBP’s former president, Abid Brohi, and former CFO Qamar Hussain.
In addition, NBP’s former group chief for corporate and investment banking, Nadeem Anwer Ilyas and former Senior VPs Nausherwan Adil and Rafiq Bengali are also among the accused.
A reference filed at an accountability court in Karachi by NAB against these officials states that they were engaged in “debt swap and master restructuring of loans” schemes on fraudulent grounds.
The scheme included the banks buying shares of Agritech Ltd, a subsidiary of Azgard Nine, at a rate that was above its market price.
Azgard-9 was under obligation to repay a sum of around Rs. 40 billion to 63 different financial institutions which included Rs. 3.41 billion to the National Bank of Pakistan.
The seven accused devised a plan to settle the debt of 22 out of 63 financial institutions. The total debt of these institutions amounted to Rs. 10.5 billion including the Rs. 3.41 billion that was supposed to be paid to NBP.
Stocks Purchased at More Than Twice The Price
A NAB investigation showed that the stock was purchased at Rs. 35 per share whereas the price of the stock at that time was Rs. 13.47. This resulted in a loss of Rs. 3.3 billion to the national treasury. Azgard-9 then used this money to settle a large part of the debt.
NAB claims that Nadeem Anwer, group chief of corporate and investment banking at NBP came up with the idea of buying shares at a higher price. The price was then approved by Abid Brohi, Qamar Hussain, Nausherwan Adil and Rafiq Bengali as they had the power to do it being members of NBP’s credit committee.
6 Year Plan
This scheme was developed at NBP in early 2011. A group of banks, including some of Pakistan’s largest banks agreed to participate as NBP assured them that it would buy the shares back from them in the future at Rs. 35.
The current market value of Agritech Ltd’s stock is Rs. 8 per share.
Investigations started in 2016 and have now been concluded after this reference was filed at the accountability court. All the seven accused are listed in the reference as absconders.