Massive Scandal Hit Bank Of Massive Scandal Hit Bank Of PunjabPunjab

ContentsContents

HistoryHistory Need of The Bank of PunjabNeed of The Bank of Punjab Case StudyCase Study Report of General Manager Report of General Manager

AuditAudit Harris Steel Mill ScamHarris Steel Mill Scam Who Ate How Much in Bank of Who Ate How Much in Bank of

Punjab?Punjab? Effect on ProfitabilityEffect on Profitability Restructurings of BODRestructurings of BOD Questions PortionQuestions Portion

HistoryHistory

Established in 1989Established in 1989 When Banazir Was the Prime When Banazir Was the Prime

MinisterMinister Nawaz shirf Was the Chief Minister Nawaz shirf Was the Chief Minister

of Punjab of Punjab Status of scheduled bank get in Status of scheduled bank get in

19941994 Branches (273)Branches (273) Head OfficeHead Office

10 B, Block E II, Main Boulevard 10 B, Block E II, Main Boulevard Gulberg III LahoreGulberg III Lahore

Need of The Bank of Punjab Need of The Bank of Punjab

Banazir GovernmentBanazir Government When Nawaz Sharif Was the Minister When Nawaz Sharif Was the Minister

of Punjabof Punjab Govt was not realized funds to Punjab Govt was not realized funds to Punjab

(province)(province) Then Punjab Govt make its own BankThen Punjab Govt make its own Bank Criticized byCriticized by

PPPPPP Ch Shujaat Hussain (A member of Nawaz Ch Shujaat Hussain (A member of Nawaz

League)League)

ManagementManagement

Case StudyCase StudyFraud of Billion rupeesFraud of Billion rupees

Loan issued to non existed companiesLoan issued to non existed companiesUse fake identity cardsUse fake identity cardsUsed over-evaluated properties were Used over-evaluated properties were

pledged as collateralpledged as collateral

Report of General Manager Report of General Manager Audit Audit

A Report submitted to the President A Report submitted to the President (Hamesh Khan) of Bank by (Hamesh Khan) of Bank by Muhammad Hanif (GM Audit)Muhammad Hanif (GM Audit)Instead of listening earlier warning bank Instead of listening earlier warning bank

released more moneyreleased more moneyRisk intensive irregularities pointed outRisk intensive irregularities pointed out

November 7, 2006November 7, 2006December 1, 2006December 1, 2006February 23, 2007February 23, 2007

Report of General Manager Audit Report of General Manager Audit Cont…Cont…

Irregularities of Rs. 6 - 9 BillionIrregularities of Rs. 6 - 9 BillionCorporate Branch LahoreCorporate Branch LahoreTufail Road Branch LahoreTufail Road Branch LahoreMain Branch LahoreMain Branch Lahore

Irregularities in Harris Steel Mill and Irregularities in Harris Steel Mill and its Allied Accounts related toits Allied Accounts related toBills DiscountingBills DiscountingLetter of CreditLetter of Credit

Report of General Manager Audit Report of General Manager Audit Cont…Cont…

Agriculture land offer as collateral security, Agriculture land offer as collateral security, but was mentioned as commercial landbut was mentioned as commercial land

No confidential report from previous No confidential report from previous bankers of the parties were calledbankers of the parties were called

GM audit observed that credit bulletin no GM audit observed that credit bulletin no 35 provided open permission to discount 35 provided open permission to discount document under BOP L/Cdocument under BOP L/C

It was violation of SBP’s regulation from It was violation of SBP’s regulation from offering credit facilities to certain limitoffering credit facilities to certain limit

Sheikh Afzal opened 16 companies Sheikh Afzal opened 16 companies accounts and was able to get credit worth accounts and was able to get credit worth billion of Rupeesbillion of Rupees

Harris Steel Mill ScamHarris Steel Mill Scam

It was the Fake CompanyIt was the Fake Company Get loan of 9 billion on Fake Identity Get loan of 9 billion on Fake Identity

Card Card From which 6.10 billion has been From which 6.10 billion has been

recoveredrecovered Owned by Sheikh Afzal Owned by Sheikh Afzal Name by his son HarrisName by his son Harris

130 luxury houses in the big cities of 130 luxury houses in the big cities of PunjabPunjab

Houses worth in billion of rupeesHouses worth in billion of rupees

Who Ate How Much in Bank of Who Ate How Much in Bank of Punjab?Punjab?

Hamesh Khan is back and has Hamesh Khan is back and has started singing in the jailstarted singing in the jail

On September 27, 2007 On September 27, 2007 NAB had filed a reference in an NAB had filed a reference in an

accountability court against 12 peopleaccountability court against 12 peopleIncluding six officials Including six officials Six other accused of Rs 9 billion fraudSix other accused of Rs 9 billion fraud

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/04-hameshkhan-sc-qs-04pakistan/04-hameshkhan-sc-qs-04

Who Ate How Much in Bank of Who Ate How Much in Bank of Punjab? Cont…Punjab? Cont…

Mr. Wasi Zafar (Law Minister in 2007)Mr. Wasi Zafar (Law Minister in 2007)Salman Siddique (Finance Secretary)Salman Siddique (Finance Secretary)State Minister Raees Muneer (With State Minister Raees Muneer (With

reference of Pervez Musharraf) reference of Pervez Musharraf) borrowed Rs120 million from the BOPborrowed Rs120 million from the BOP

Irfan Qadir was given Rs.1 Million by Irfan Qadir was given Rs.1 Million by Shiekh Afzal to get relief from Lahore Shiekh Afzal to get relief from Lahore high Courthigh Court

http://news.dawn.com/wps/wcm/connect/dawn-content-library/http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/04-hameshkhan-sc-qs-04dawn/news/pakistan/04-hameshkhan-sc-qs-04

Who Ate How Much in Bank of Who Ate How Much in Bank of Punjab? Cont…Punjab? Cont…

Sheikh Afzal disclosed that he paidSheikh Afzal disclosed that he paidWaseem Sajjad (Rs. 2 Million)Waseem Sajjad (Rs. 2 Million)Sharifuddin Pirzada (Rs.10 Million)Sharifuddin Pirzada (Rs.10 Million)

When, NAB raided Sheikh Afzal’s office When, NAB raided Sheikh Afzal’s office Dr Babar Awan (Rs. 50 Million)Dr Babar Awan (Rs. 50 Million)Mohsin Naqvi (Rs 3.5 Million) Mohsin Naqvi (Rs 3.5 Million) Malik Qayyum (Rs.10 Million)Malik Qayyum (Rs.10 Million)

http://news.dawn.com/wps/wcm/connect/dawn-content-library/http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/04-hameshkhan-sc-qs-04dawn/news/pakistan/04-hameshkhan-sc-qs-04

Effect on Profitability (In Effect on Profitability (In Billion)Billion)

0

0.5

1

1.5

2

2.5

3

3.5

4

2005 2006 2007 2008

Profits

Loss

Restructurings of BODRestructurings of BOD Mr. A.Z.K. Sherdil ChairmanMr. A.Z.K. Sherdil Chairman Mr. Naeemuddin Khan PresidentMr. Naeemuddin Khan President Mr. Abdul Ghafoor Mirza DirectorMr. Abdul Ghafoor Mirza Director Mr. Farooq Ahmed Awan DirectorMr. Farooq Ahmed Awan Director Mr. Junaid Ashraf Khawaja DirectorMr. Junaid Ashraf Khawaja Director Mr. Rizwan Ullah Khan DirectorMr. Rizwan Ullah Khan Director Mr. Shafqat Mahmood DirectorMr. Shafqat Mahmood Director Mr. Tariq Bajwa DirectorMr. Tariq Bajwa Director Mr. Tariq Mahmood Pasha DirectorMr. Tariq Mahmood Pasha Director Mr. Viqar Ahmed Khan DirectorMr. Viqar Ahmed Khan Director Mr. Raza Saeed Secretary to the Mr. Raza Saeed Secretary to the

BoardBoard

Question No 1Question No 1

Who is the main culprit in Who is the main culprit in the case of Bank of Punjab?the case of Bank of Punjab?

Answer:Answer:

The main culprit of the case was the The main culprit of the case was the Mr. Hamesh Khan (President of the Mr. Hamesh Khan (President of the Bank of Punjab). He was accused of Bank of Punjab). He was accused of abuse of power, sanctioning Rs. 9 abuse of power, sanctioning Rs. 9 Billion in loans to Shiekh Muhammad Billion in loans to Shiekh Muhammad Afzal (CEO of Harris Steel Mill) on Afzal (CEO of Harris Steel Mill) on fake ID card for personal financial fake ID card for personal financial game.game.

Question No 2Question No 2

How did you evaluate the role of audit?How did you evaluate the role of audit?

Answer:Answer:

Internal Auditor played there role very Internal Auditor played there role very well, Mr. Muhammad Hanif (GM Audit) well, Mr. Muhammad Hanif (GM Audit) presented 3 consecutive audit report onpresented 3 consecutive audit report on

November 07, 2006 November 07, 2006 December 01, 2006 December 01, 2006 February 23, 2007February 23, 2007

And pointed out risk intensive And pointed out risk intensive irregularities.irregularities.

Question No 3Question No 3How did you evaluate the role of BOD?How did you evaluate the role of BOD?

Answer:Answer:BOD of BOP appointed by the BOD of BOP appointed by the

previous government of Punjab, previous government of Punjab, headed by Mr. Pervaiz Elahi, headed by Mr. Pervaiz Elahi, embezzled billions from the Bank of embezzled billions from the Bank of Punjab, so its means that the BOD Punjab, so its means that the BOD was also involved in this dirty game.was also involved in this dirty game.

Haris Steel Mill scandal in BOP was Haris Steel Mill scandal in BOP was just the tip of the Ice Berg.just the tip of the Ice Berg.

Question No 4 Question No 4

Give practical suggestion to avoid this Give practical suggestion to avoid this sort of fraud in future?sort of fraud in future?

Answer:Answer:Approval should be on different Approval should be on different

authoritiesauthoritiesProper Documentation Proper Documentation Minimum influence of PoliticsMinimum influence of PoliticsThere should not be conflict of interestThere should not be conflict of interestManagement Should be IndependentManagement Should be Independent

That’s All From Our SideThat’s All From Our Side

Thanks 4 Your Thanks 4 Your ConcenterationConcenteration

Presented ByPresented ByMohammad Shehzad TahirMohammad Shehzad Tahir

Umar FarooqUmar Farooq

Numan KhalidNuman Khalid

Muhammad Imran ShahidMuhammad Imran Shahid

Hasan Ibrar KhanHasan Ibrar Khan

Humaira NaseemHumaira Naseem