State Bank takes over
The State Bank on Tuesday removed the board of directors and the
management of Bankers Equity Ltd. and appointed a senior former BEL executive Majeeduddin
Khan as its new chief executive. He has also been vested with powers of the board of
directors till further orders. The action taken under section 41 A and 41B of Banking
Companies Ordinance on "embezzlement of funds" and a host of irregularities of
BEL is effective from Aug 31, 1999.
SBP Governor Dr Muhammad Yaqub told a hurriedly-called press conference
that chairman Rauf B. Kadri, chief executive Inamul-Haq and a senior executive Ashfaq
Yousuf Tola had been taken under custody by FIA.
"Tomorrow we will move Sindh High Court under section 83 of
Banking Companies Ordinance," Dr Yaqub told newsmen. He said the high court would be
moved for criminal proceedings against Rauf B. Kadri and Inamul-Haq for concealment of
facts and misreporting to the State Bank.
He gave a detailed account of what he called "highly sophisticated
white-collar crimes" committed by the BEL management that resulted in its take-over.
He said SBP investigations had established that BEL management was
guilty of concealment of information and falsification of balance sheet. The
investigations also established rescheduling of Rs 3.6 billion worth of loans "with
questionable standards to show inflated income."
He said the investigations also revealed cases of misreporting of data
to State Bank and disbursement of loans without proper securities coupled with improper
He said BEL management was also found involved in improper use of Rs
381 million worth of instalments of LMM loans repaid by the BEL borrowers that should have
been paid back to the State Bank.
The mid-term results of ICI Pakistan Limited released by the Board on
Aug 10, showed pretax loss at Rs 2,465 million on sales valued at Rs 5,718 million for the
first six months (Jan-June) of the current year.
On the eve of the June 3, announcement of the right issue at 60 per
cent, the company had forecast expected sales figure at Rs 15,265 million and before tax
loss at Rs 5,613 million for all of the year 1999.
Auction schedule of TBs changed
The State Bank of Pakistan (SBP) has changed the schedule of auctions
of government of Pakistan market treasury bills (MTBs) and open market operations (OMOs)
of the SBP effective from September 8 1999 and September 2, 1999 respectively.
According to SBP circular to banks, NBFIs and members of stock
exchanges here Tuesday changes in the auction of MTBs would be effective from September 8,
1999. The MTBs auction will be conducted on alternative Wednesdays.
The settlement will take place on following Thursdays. In case
Wednesday happens to be a holiday, auction will be held on preceding working day. In case,
Thursday happened to be a holiday settlement will take place on the following working day.
Pak Kuwait Investment Co
The prudent asset allocation strategy and market timing has allowed Pak
Kuwait Investment Company (Pvt) Ltd. (PKIC) to earn substantial returns on its equity
portfolio during the past eight years, realising capital gains of Rs 1.9 billion and Rs
800 million as dividend income during this period, despite continuing downturn in the
economy, which was severely exacerbated by the economic crisis after Pakistan conducted
nuclear test on May 28, 1998.
As a result the profit for the year ended December 31,1998, was at Rs
766 million which was marginally lower from Rs 806 million recorded during the last year.
The freezing of foreign currency deposits seriously affected PKIC business, causing a
major downsizing of company's balance sheet.
Union Bank sold
The controlling shares of the Union Bank Ltd have been transferred to
Gulf investors by the Saigol Group, says a press release.
It says that the new Board members nominated by Gulf Group were
selected on Saturday at a board meeting of the bank in Lahore. The State Bank allowed this
acquisition earlier in the week.
The new members on the Board of Directors are: Moin Afzal, Muneer
Kamal, Qazi Mazhar-ul-Haq, Dr Salman Shah, Tariq Allahwala and Rafat Rizvi. Muneer Kamal
will be the new chief executive officer of the bank.
Union Bank was established in 1991 by Naseem Saigol Group.
Port Qasim Authority
The Port Qasim Authority (PQA) has achieved gross operating surplus of
Rs 1149.3 million and net cash surplus of Rs 856.01 million during 1998-99.
The operational surplus was achieved through improved market share,
efficient asset management and economy in expenditure particularly in tug hiring, use of
vehicles, POL and payment on account of overtime, the PQA chairman, Nazar Mohammed Shaikh
told the board of the Authority.
Rescheduled foreign debt repayable from 2004: Dar
Pakistan's rescheduled official and nonofficial foreign debt of $3.3
billion will come due for repayment from the year 2004, finance minister Ishaq Dar said on
Addressing a press conference he said that the rescheduled debt was to
be repaid in 18-20 years. He said the repayment of non-official debt will start from 2004
while that of official loan from 2010.
To a question, Dar claimed that the 'IMF was happy with the economic
recovery and policies of Pakistan otherwise it would not have released its financial
He said the expected inflation rate for the current financial year was
Finance minister Ishaq Dar has directed the State Bank to take
immediate action against banks involved in any kind of violation of its rules and
The direction was issued by Dar in a meeting Saturday with the central