NAB in tight corner as businessmen refuse to pay dues
|By Kamran Khan|
Two important business families of the provincial metropolis who had earlier agreed to pay about Rs1.8 billion to the National Accountability Bureau (NAB) and various banks - an offer that won them an immunity against allegations of financial impropriety and release of their key directors from prisons - have reneged on their promises.
The defiant businessmen, senior NAB officials concede, currently constitute the single most important challenge to their drive against white-collar crime in the country.
Senior NAB officials have confirmed that Sultanally Lakhani and his three brothers, who partly run and operate the Lackson Group of Companies, and the Mcdonalds food restaurants in Pakistan, after two initial payments of Rs100 million each, have stopped further payments for an agreed amount of Rs1.5 billion.
The NAB had alleged that the Lakhani brothers created phoney companies through worthless directors and raised massive loans from various banks and financial institution.
Similarly, Irfan Iqbal Puri, Karachis leading supplier of petroleum products from the Gulf countries, has refused to match the agreed amount of Rs300 million after an initial payment of Rs230 million to the NAB. Puri, the NAB had alleged, compromised the quality and quantity of petroleum products in supplies to the Pakistan State Oil and caused huge financial loss to the national exchequer.
Sultanally Lakhani, who was jailed for about nine months, and Irfan Puri, who had spent almost an equal amount of time in the NAB and jail custody, have since left the country and have taken up residence in the United States and the United Kingdom. Their attorneys have challenged the signed deals with the NAB claiming that the deals were signed under duress. Circles close to both the persons said that if the "businessmen are harassed in this country you can not stop negative impacts".
"We are initiating fresh probe and action against the Lakhanis and Irfan Puri," said a senior NAB official. "The NAB will make sure that they stand by their agreements. We cant allow people to hoodwink the NAB."
A present official of the NAB said that in the past the Bureau had brought historical achievements and brought back large amount of looted money. A big and highly reputed entrepreneur, who knows much about Lakhanis case, while talking to The News categorically said that it was sheer injustice to those businessman who were law-abiding and doing their business honestly and making some achievements by working hard day and night.
He said that a businessman obtained loans of billions of rupees, invested it in his business by some other name, earned a lot of profit, multiplied his wealth, brought new products in the market but declined to return the loan, and when he was caught he was given ten years more to pay back the loan in instalments.
What are the laws of this country that when this person again defaulted no one is making it point that till the time he was caught, how much he had expanded his business and how many products he had introduced using these loans, he said.
He said that it would not be surprising that he would again be given the facility of repayment in instalments for further many years and these episodes would go on. When asked about remedy, he said that it would be fair that the amount due on such defaulters be secured by confiscating their business units of equivalent value plus interest and selling these in the market. He added that it was injustice with other businessmen and the country to give any concession to such habitual defaulters who were continuously expanding their business and bringing new products in the market and not paying back heavy loans by bringing up the plea that they were in loss in the company for which the loan was taken. "Its a fraud with the nation," he said.
On the other hand, various legal experts are wondering if the NAB had foolproof cases against the accused businessmen, why did the NAB top brass left big legal holes in their deals with the businessmen who somehow managed that the NAB make no official mention of the specific charges against them and the entire evidence collected in the course of investigation be "dismembered".
Sultan Lakhani and his brother Amin Lakhani, who is also Honorary Consul-General of Singapore, were arrested on May 8, 2000 by the NAB wing of the ISI. Amin was released after a few days, but Sultan spent another nine months in various NAB detention centres and Adyala prison before his lawyer and the present Attorney-General of Pakistan, Makhdoom Ali Khan, reached an agreement with the then NAB chairman.
NAB officials privately concede that in case of Sultanally Lakhani and other key directors of the Lackson Group of Companies, the then NAB leadership had not applied the legally tenable practise of plea bargain and instead had decided to supervise a memorandum of understanding (MOU) between the Lakhani brothers and various financial institutions. They further said they were looking that how such a deal had been made. Was there a helping hand or was it done innocently?
Sliding down from its initial demand of Rs7 billion, the NAB agreed with Makhdom Ali Khan advocate of the Lakhani brothers that they pay an amount of Rs1.5 billion to the lenders in 10 years.
The NAB agreed that in the MOU that the Lakhani brothers would not accept any guilt in the document and instead the MOU would reflect them as buyers of assets of nine companies in exchange for the payment of liabilities. The NAB had found, in its investigation, that all these companies were actually front for the Lakhani brothers, who consistently denied the charge. Furthermore, the NAB agreed to withdraw its reference against Sultan Lakhani and various co-accused, including the senior executives of the Industrial Development Bank of Pakistan who had extended the loans without proper securities and background checks.
The NAB investigators were also asked to stop probe against nine other companies of the same group. The investigators were also told to return the collected evidence to the respective financial institutions.
The accused persons who benefited from the NAB deal included Sultan Ali Lakhani, Iqbal Ali Lakhani, Zulfiqar Ali Lakhani, Amin Muhammad Lakhani, Sahibzada Naushad Ahmed, M Muneer Adenwalla, Hassan Ali Merchant, Tasleemuddin Batlay, Aziz Ebrahim (Lakson Group), Anjum Naveed (General Manager M/s Project Development Services), Muhammad Sirajul Hassan (former chief officer at Industrial Development Bank of Pakistans regional office in Karachi), Khalid Mehmood Nagra, Syed Mehboob Hussain (office in-charge of the IDBP) and Rehan A Siddiqi (Manager Documentation Department of IDBP, Karachi.
NAB officials said that after much pressing the Lakhani brothers had only paid Rs200 million and were now clearly avoiding the payment of remaining Rs1.3 billion. Irfan Iqbal Puri, who used to be a key middleman between the countrys top buyers of petroleum products and the Middle Eastern suppliers, made the single largest payment of Rs235 million to the NAB following his three-month-long interrogation by the NAB investigators, who apparently confronted him with the evidence allegedly showing kickbacks and commissions received from the Middle Eastern suppliers, who allegedly compromised quality and quantity of petroleum products sold to Pakistan.
At the time of his release Puri, NAB officials said, pledged to pay a total sum of Rs300 million, but subsequently he refused to make the final instalment of Rs65 million and instead confronted the NAB with a lawsuit claiming the return of Rs235 million that he had already paid to the NAB.
In Puris case the NAB downplayed its agreement with him to an extent that no official announcement was made about the plea bargain deal. At the same time, the NAB withheld its evidence and findings against Puri from any public and legal scrutiny, a measure that has now become the strongest argument in the Puris case against the NAB.
NAB officials said that the plea bargain deals are meant to recover the looted money in exchange for some grace to the accused persons who get the benefit of not going through the public trial and exposure of their misdeeds in public.
But the process is attracting some criticism, as it allows the senior NAB officials to exercise their discretion in settling the amount for the plea bargain.
In Irfan Puri, Usman farooqi and Admiral Mansurul Haq cases the money recovered by the NAB may match their ill-gotten wealth, but in some cases some key suspects won their freedom at a cheap cost. For instance Huzoor Buksh Khalwar, a former Karachi Metropolitan director, who was arrested after a NAB investigation found that he had allegedly amassed wealth to the tune of hundreds of millions of rupees, was set free after a brief (according to the NAB standards) three months confinement and a nominal payment of Rs16 million. Khalwar was one of the beneficiaries of a Rs600 million octroi fraud unearthed in the KMC in 1998.
NAB officials privately acknowledged that the plea bargain deal with Khalwar could not be counted as one the best deals the NAB has struck with the countrys most corrupt bureaucrats.