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Sep 06, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

State Bank takes over Bankers Equity

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 write-offs.

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.

ICI Pakistan

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 Saturday.

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 assistance'.

He said the expected inflation rate for the current financial year was 6-7%.

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 regulations.

The direction was issued by Dar in a meeting Saturday with the central bank officials.