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 Mcdonald’s 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,
Karachi’s 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 can’t 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 Lakhani’s 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. "It’s 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 Pakistan’s 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 country’s 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 Puri’s 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 Puri’s 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 country’s
most corrupt bureaucrats.
