Wednesday, October 22, 2008

Gen. Musharraf's Economic Policies - 10

Syed Hassan Tanwir Wasti wrote:

Dear Aamir Sahib,

Lets focus only on Corrupt prime ministers.

Dear Sir,

You say lets focus on Corrupt Prime Minister. Any corruption which is done under a Prime Minister i.e. Shaukat Aziz and a Serving Army General who happens to be the President of Pakistan i.e. General Musharraf would also be attributed to both of them because you have already said that Head of the State is responsible for anything bad or good. Would you like to define this Obscene and Naked Show of Corruption and Mismanagement under Musharraf and Sahukat Aziz? Both of these gentlemen wrote off loans of 60 billion rupees between 12 Oct 1999 to 2007, this is on National Assembly Record.

According to press reports, the Supreme Court has taken serious notice of the fact as to how banks wrote off a staggering amount of Rs125 billion as "bad debts" during the 2000-2006 period, against Rs 30 billion written off during 1985-1999. It is reported that larger number of loans have been written off under Circular No 29/2002, issued by the State Bank of Pakistan (SBP), of which major beneficiaries are politicians and industrialists. The criminal culpability of successive governments in this matter has tarnished the image of Pakistan in the eyes of global community as a haven for the corrupt, plunderers and tax evaders. During the self-claimed "transparent era" of Musharraf-Shaukat, the loans write- offs in just seven years (2000-2006) crossed the figure of Rs125 billion, whereas in the much-publicised "corrupt eras" of elected governments (1985-1999) it was just Rs30 billion.

1 - Top guns got Rs 54bn loans written off By Rauf Klasra

ISLAMABAD, Pakistan, 23 October 2007 (The News)

ISLAMABAD: As the present government completes its five-year term in office on November 15, it has been officially disclosed in a secret report that the top guns of Pakistan got Rs 53.499 billion bank loans written off on the basis of a decision taken by the financial team of Gen Pervez Musharraf in October 2002.

This shocking disclosure has been made in a secret report submitted before the Public Accounts Committee (PAC) of the National Assembly which has been requested to take up the issue at requested to take up the issue at the earliest to know the reasons behind such a massive loss to the public exchequer facilitating the privileged of the present government.

As the present government would claim to be the first in the history of Pakistan that has completed five years in office, at the same time it would also be ‘credited’ with writing off such an unprecedented amount of loans within its five years in office to facilitate top guns of the regime.

The report shows that a total of 50,000 persons including politicians, civil and military business concerns and business tycoons of Karachi, Lahore and other areas were the direct beneficiaries of this massive favour.

Two sitting chief ministers of the provinces and their families having big business concerns and stakes are also beneficiaries of these written off loans whose details would be discussed in the committee meeting.

Although in the past, reports of written off loans have been appearing at different forums including the National Assembly, this is the first time that the total written off amount has come to surface.

The chief minister of a province whose family owns sugar mills, also got loans written off under this scheme. The chief minister of another province got loans written off outstanding against his ghee mills. Even some foreign firms and multinational companies and a private bus service operating from Lahore to different cities of Punjab were also extended this facility.

Earlier, soon after elections in October 2002, the then finance minister Shaukat Aziz and his financial team at the State Bank approved a ‘written off loan scheme’ in the same month (October 2002) after certain top politicians of the government put them under pressure to ease financial burden of loans from their business concerns.

In the garb of writing off non-performing loans of small businessmen, these top guns quietly got billions of rupees written off. An official of the PAC confirmed to The News that a report has been received containing the details of loans written off during the last five years.

Copy of the report available with The News shows that soon after the October 2002 elections, General Pervez Musharraf’s financial team decided to launch a scheme to write off loans of the big guns as it set the minimum limit of written off loans at Rs0.5 million. This 0.5 million condition deprived small growers and small businessmen of this scheme and only big guns were the beneficiaries.

The report said that prudent banking practices and prudential regulations issued by the State Bank required securing loans through best guarantees, viable credit approvals, proper documentations and effective monitoring and follow up to avert flow of cases of non-performing loans. On the contrary, cases of non-performing loans were allowed to be accumulated by the banks and the SBP.

Instead of launching an effective campaign for recovery of such loans, the SBP issued an incentive scheme to the banks/DFIs in October 2002 for writing off NPL of the organizations showing “loss” for three years or more. The NPL for the purpose of the scheme were divided into three categories: category A included NPL up to Rs0.5 million, category B included NPLs ranging from Rs0.5 million to Rs2.5 million whereas category C included more than Rs2.5 million. The big political families and top guns exploited the third category of the written off loans to get billions of rupees outstanding against them written off from the banks.

However, the report has pointed out that for the settlement of B and C category cases the banks/DFIs were required to recover maximum possible amounts on the basis of outstanding amount vis-‡-vis forced sale of available assets. The purpose of the scheme was to clean the balance sheets owned by banks/DFIs to make them ready for privatisation.

As a result of the scheme, the banks/DFIs settled over 50,000 cases involving outstanding amount of RS74.879 billion whereas only Rs11 billion could be recovered. The report claims that the scheme resulted in realization of only 15.15% of the outstanding loans but major portion of the loans was either written off or could not be recovered.

Meanwhile, the Auditor General of Pakistan (AGP) in its report to PAC has opined that this practice resulted in encouraging defaulters with an extraordinary financial burden on the public exchequer.

The report said the shocking written-off loans issue was raised with the Ministry of Finance and SBP management. The matter was also discussed in subsequent meetings in the recent past with the last one held in March 2007.

Meanwhile, an SBP official has argued that the writing off of loans in the banking sector was under a policy guideline issued vide circular 29 and that the losses mentioned by audit did not pertain to the SBP.

But, the AGP in its report has observed that such a huge write off may be looked into which was made possible due to circular No 29 of SBP and recoveries be made from the plunderers of public exchequer.

Talking to The News, Minister of State for Finance Omar Ayub strongly defended the policy of the government to introduce a scheme to help the borrowers settle their non-performing loans (NPLs) with the banks including the National Bank.

He said that these NPLs were settled in the light of circular No 29 issued by the State Bank. Omar said, a total of 50,414 borrowers availed the facility of settling their loans under this scheme which he confirmed was introduced in October 2002 after general elections.

Omar said that these decisions were taken by the boards of these banks that were quite independent and were not under the influence of the government. He said actually these non-performing loans were becoming a burden on the banks itself so the decision was taken to rather settle them after offering them a package.

Omar did not subscribe to the notion that top guns of the government including chief ministers or ministers had got their loans written off under this scheme. He also rejected the impression that these loans were written off as a bribe both to the politicians and big businessmen.

When told that even NBP had written off loans outstanding against some top politicians, Omar replied, “We need to understand that banks were deciding those cases in their own business interests without caring for pressure from any side”.

2 - 47 Army officers strike it rich

ISLAMABAD: As many as 47 officers of the Pakistan army who were allotted big farmhouses in the suburbs of Islamabad by the Capital Development Authority (CDA) at throwaway price for growing “vegetables, orchards and poultry” have quietly sold off their 310 acres of prime farmland at exorbitantly high price. The market prices are in the range of Rs100-200 million per acre depending upon on the location of the farm.

The CDA has submitted the names of these army officers to the Supreme Court of Pakistan along with 499 top guns who own 2500 acres of prime farmland worth Rs75billion.

General Pervez Musharraf and Shaukat Aziz too are among those powerful people who now own these plush farmhouses.

At the time of allotment of these farmhouses, these army officers were shown as the interested parties and individuals keen to grow vegetables, orchards and poultry products, in line with the CDA’s policy, for supply to the residents of the twin cities of Rawalpindi and Islamabad. These farms were allotted to these military officers in the farming schemes in Chak Shahzad, Orchard Scheme Murree Road, etc. But, after getting them allotted at highly subsidized rate, these officers later sold these farms at market rates to earn massive profits.

Earlier, the Supreme Court had directed the CDA authorities to submit a report containing the names of all those who were given land at throwaway prices for growing vegetables. The CDA has now submitted the list of these 499 big and influential people who have converted these big farms into residential palaces. The Authority too is blamed for changing the byelaws to accommodate the high and mighty of Islamabad to give legal cover to the otherwise massive irregularities committed in the name of growing vegetables and orchards.

The names of those army officers who have sold their farmhouses are given below:

Maj Sajid Hussain sold 2 acres of land to ISI, Mohammad Asim sold his farm to ISI, Sub Muhabat Khan to Mr Rashid etc, Flt Lt Fazal Hussain to Ms Bushra Akram, Major Maqboolur Rehman to Mohammad Ilyas, Maj Islam Khan to Mohammad Zubair Kidwai, Wing Commander Hasham Jamal Dani to Kalimur Rehman and others, Col SM Fazail to Ms Mihala Hussain wife of Tariq Hussain, Majr General Ikhlaq to Ms Ambreen Haroon, Brig Esa Khan to Nisar Ahmed and others, Col Mohammad Aslam Khan to Ms Usman Ahmed Janjua, Brig Khushi Mohammad Ch to Nighat Rehman daughter of Raza-ur Rehman, Major Mahmoodur Rehman to Ms Zohra Nasim, Brig Malik Shahnawaz to Ms Naz Aziz Ahmed, Col Mohammad Riazul Hassan to Ms Shamim Ara and others, Major Mohammad Safeer to Bilal Hussain son of Hassan Din, Lt Col Mohammad Hanif to Ms Shafi un Nisa wife of Mumtaz, Col Moinuddin Khan to Waseem Akthar Kh, Col Mohammad Saleem to Ch Abdul Hameed, Brig Shaukat Ali sold two farms of 2.5 acres each to Mr Shamoon Zakria, Lt General Jamal Said Mian to Ali Ejaz Hussain, Brig Mohammad Afzal Khan to Jahnzeb Khan Orakzai and others, Brig Abdul Qayum to Brig Fazalur Qadir, DG ISI sold two plots to Tanver Ilyas and Ms Tricon Developers, Commd MA Arif Khan to Mehran Gul, Major General Riaz Rabbani to Malik Saleem Raza, Maj General Saad Tariq to Mehraj Ent, Col S Ghaffar Mehdi to Mohammad Younis, Col Abdullah Khan to Saifur Rehman, Major Syed Azmat Ali Bokhari to Mian Abdul Rasheed, Major Anees Ahmed to Ch Khalid Aziz and others, Major M Younis Khan to Mohammad Irshad and others, Lt Col Asghar Khan to Shafaul Haq and others, Sq Ldr MKR Aziz to Raja Mohammad Arshad, Maj General M Rahim Khan to Faqir Syed Muniruddin Bukhari, Lt Col SM Akhtar to Ms Shamim Afridi, Sub Mansabdar to Maj Genreal Ashraf Khan, Lt Col Raja Zahoor Akthar to Tariq Saleem, Lt Col Noor Ellahi to Dr Naseemudin, Cap Dr Ahmed Ali Khan to Qadir Gilani, Sub Mansbadar to Dr Mohammad Ashiq and Brig Khushi Mohammad sold his farm to Irfanul Haq Alvi.

3 - 499 farmhouses are worth Rs75bn!

ISLAMABAD: The existing market price of the farmhouses spread over 2500 acres of land in the suburbs of Islamabad and owned by only 499 individuals is a staggering 75 billion, and each top gun, on average, owns a farmhouse worth Rs150 million.

The Chief Justice of Pakistan Iftikhar Mohammad Chaudhry resumes the hearing of this extraordinary case on Thursday (today), which might finally lead to cancellation of allotment of these farmhouses, as it has now emerged that most of these farms are being used for purposes other than for which they were originally allotted by the CDA.

The CJ has already directed the CDA to conduct a survey of these farmhouses and cancel the allotment of those farms which were violating the terms and conditions of the allotment policy.

The publication of the names of these 499 holy cows in ëThe Newsí and ëJangí on Wednesday, has set the alarm bells ringing and the owners have held an emergency meeting at the residence of a top government authority at Chak Shahzad to evolve a strategy to save themselves from the drastic action by the Supreme Court. They are planning to hire the services of a top lawyer to defend them in the court.

These influential people including civil-military bureaucrats and politicians quite conveniently got these plots allotted by the CDA from time to time at throwaway price in the name of growing ìvegetables, poultry and orchardsî. President Musharraf and Prime Minister Shaukat Aziz also purchased their farmhouses from the original allotees.

The most prominent among these 499 owners are General Pervez Musharraf and Shaukat Aziz who bought these plots in 2003 from their original owners. Justice Javed Iqbal, Wasim Sajad, Saifur Rehman, Naheed Khan, former interior minister Wasim Shahzad, ISI, Hafeez Pirzada, top military and civilian officers are included in the list.

But their allotment is in danger of being cancelled after the CJ directed the CDA to lunch a survey and cancel the allotments of those farms which were being used for the purpose other than for which they were actually allotted.

Meanwhile, several property dealers of Islamabad have confirmed to ëThe Newsí that the current market value of the land owned by 499 privileged individual is Rs75 billion. One property dealer said one acre of land in this area sells for Rs200-250 million. ìThe network of carpeted roads leading to these farmhouses has further hiked the price of these expensive farmsî, the dealer commented.

The SC has been informed that many powerful people have converted these farmhouses into big palaces, mini golf courses, marriage halls, ball rooms, banquet halls, small cinema houses etc. These people have also been enjoying the patronage of the CDA authorities and thus were not touched in the past by the regulations wing of the authority.

Talking to ëThe Newsí, senator Anwer Baig who had already appeared before the SC to give testimony in the case, confirmed that he would continue to pursue the case. Earlier, the SC was told that these farmhouses were actually allotted by CDA in a bid to develop a permanent source of supply of vegetables, poultry and fruits for the people of the twin cities. But, instead, these plots were simply being used for construction of big palaces and recreational facilities. Even ISI also got two big farmhouses allotted in its name for producing poultry and vegetables.

Talking to The News, Chairman CDA Kamran Lashari said the authority was conducting a survey of these farms, as directed by the Supreme Court, and would submit the report to the court of honourable CJ for further action.

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