10-13-2010, 12:53 PM
The Supreme Court Tuesday directed commerce ministry to lodge an FIR with Federal Investigation Agency (FIA) against the Chairman of National Insurance Company Ltd (NICL) and its Board of Directors (BoD) for formal investigations into a major land scam.
A three-member bench of the Supreme Court headed by Chief Justice Iftikhar Muhammad Chaudhry was hearing a suo motu case against a billion-rupee scam in NICL which, according to National Accountability Bureau (NAB), has caused a Rs 1.045 billion loss to the national kitty.
The apex court directed the secretary of commerce ministry to lodge a formal complaint against Muhammad Ayaz Niazi, chairman NICL, and its board of directors and inform the court in this respect within one month. It is pertinent to mention that the apex court specially summoned secretary commerce, Zafar Mahmood during the proceedings on Tuesday so that he could be directed to immediately proceed against the persons allegedly involved in the scam.
According to an inquiry report of NAB, which was conducted on the directives of Supreme Court, the NICL - an attached department of the commerce ministry - had struck down a land deal with a private company, M/s Privileges Farms, causing a loss of Rs 1.04 billion to the national kitty.
The NICL had purchased 803 kanals and 19 marlas of land from a bidder who did not meet the basic eligibility criteria as advertised by NICL in the press and mentioned it in tender documents. It said this flagrant deviation from the rules led to the purchase of land at Mouza Toor Warraich off Ferozepur Road, Lahore, at the rate of Rs 2.1 million per kanal against the market rate of Rs 325,000, causing a net loss of Rs 1.04 billion to the national exchequer.
M/s Privileges' Farms sold this remote land to NICL at a very high price and billions of rupees have already been deposited in the company's new bank account, opened in February 2010 in Gulberg, Lahore, for the sole purpose of money transfer by NICL from where it was immediately shifted to personal bank accounts of powerful directors of this private company.
The deal was struck by NICL, when it had bought land from Ms Privileges Farms at Rs 2.1 million per kanal against the market rate of Rs 312,500-437,500, causing a loss of Rs 1.04 billion to the national exchequer/NICL. According to the NAB report submitted to Supreme Court during the course of investigations, it was revealed that 100 percent ownership record of the land offered by M/s Privileges Farms (Pvt) Limited was not verified by NICL from the department concerned.
The Board of Revenue, Punjab, had confirmed that a vast gap existed between the market sale price and the price on which NICL purchased the land. The revenue staff of the area concerned reported that the market price of purchased land is Rs 312,500 to Rs 437,500 per kanal, whereas NICL purchased it at a rate of Rs 2.1 million per kanal, causing a loss of Rs 1.04 billion to the national exchequer.
The NAB report further said that in the absence of basic requirement/eligibility of having 100 percent ownership record, M/s Privileges Farms was unable to qualify for the award of contract even then the management of NICL not only awarded the contract and made the payment but also violated PPR rules and purchased such remote area land on exorbitant rates, causing loss to the national exchequer/NICL, which reflected mis-procurement, corruption and fraudulent practice.
The NICL hired two evaluators, named as M/s Medallions Limited and M/s SA Associates, for valuation of land, but the board of directors of NICL gave approval to the purchase of land even five days before receipt of report from one of the two evaluators. This haste creates suspicions and reflects the manners of the management of NICL.
It alleged the evaluators concerned not only quoted high rates in such remote areas but also manipulated the rates in favour of the interested party, M/s Privileges Farms, thus causing a huge loss to NICL. M/s Privileges Farms, seller of the land to NICL, was registered with SECP.
Directors of M/s Privileges Farms issued 35.5 million shares of Rs 10 each against purchase of land but did not intimate to SECP as per pervious companies ordinance. M/s Privileges Farms was registered in 2006 while the amount received from NICL was deposited in the account, opened on February 4, 2010, in Dubai Islamic Bank, Gulberg, Lahore. Subsequently, the amount was transferred into personal /joint account of Directors of M/s Privileges Farms Limited.
A three-member bench of the Supreme Court headed by Chief Justice Iftikhar Muhammad Chaudhry was hearing a suo motu case against a billion-rupee scam in NICL which, according to National Accountability Bureau (NAB), has caused a Rs 1.045 billion loss to the national kitty.
The apex court directed the secretary of commerce ministry to lodge a formal complaint against Muhammad Ayaz Niazi, chairman NICL, and its board of directors and inform the court in this respect within one month. It is pertinent to mention that the apex court specially summoned secretary commerce, Zafar Mahmood during the proceedings on Tuesday so that he could be directed to immediately proceed against the persons allegedly involved in the scam.
According to an inquiry report of NAB, which was conducted on the directives of Supreme Court, the NICL - an attached department of the commerce ministry - had struck down a land deal with a private company, M/s Privileges Farms, causing a loss of Rs 1.04 billion to the national kitty.
The NICL had purchased 803 kanals and 19 marlas of land from a bidder who did not meet the basic eligibility criteria as advertised by NICL in the press and mentioned it in tender documents. It said this flagrant deviation from the rules led to the purchase of land at Mouza Toor Warraich off Ferozepur Road, Lahore, at the rate of Rs 2.1 million per kanal against the market rate of Rs 325,000, causing a net loss of Rs 1.04 billion to the national exchequer.
M/s Privileges' Farms sold this remote land to NICL at a very high price and billions of rupees have already been deposited in the company's new bank account, opened in February 2010 in Gulberg, Lahore, for the sole purpose of money transfer by NICL from where it was immediately shifted to personal bank accounts of powerful directors of this private company.
The deal was struck by NICL, when it had bought land from Ms Privileges Farms at Rs 2.1 million per kanal against the market rate of Rs 312,500-437,500, causing a loss of Rs 1.04 billion to the national exchequer/NICL. According to the NAB report submitted to Supreme Court during the course of investigations, it was revealed that 100 percent ownership record of the land offered by M/s Privileges Farms (Pvt) Limited was not verified by NICL from the department concerned.
The Board of Revenue, Punjab, had confirmed that a vast gap existed between the market sale price and the price on which NICL purchased the land. The revenue staff of the area concerned reported that the market price of purchased land is Rs 312,500 to Rs 437,500 per kanal, whereas NICL purchased it at a rate of Rs 2.1 million per kanal, causing a loss of Rs 1.04 billion to the national exchequer.
The NAB report further said that in the absence of basic requirement/eligibility of having 100 percent ownership record, M/s Privileges Farms was unable to qualify for the award of contract even then the management of NICL not only awarded the contract and made the payment but also violated PPR rules and purchased such remote area land on exorbitant rates, causing loss to the national exchequer/NICL, which reflected mis-procurement, corruption and fraudulent practice.
The NICL hired two evaluators, named as M/s Medallions Limited and M/s SA Associates, for valuation of land, but the board of directors of NICL gave approval to the purchase of land even five days before receipt of report from one of the two evaluators. This haste creates suspicions and reflects the manners of the management of NICL.
It alleged the evaluators concerned not only quoted high rates in such remote areas but also manipulated the rates in favour of the interested party, M/s Privileges Farms, thus causing a huge loss to NICL. M/s Privileges Farms, seller of the land to NICL, was registered with SECP.
Directors of M/s Privileges Farms issued 35.5 million shares of Rs 10 each against purchase of land but did not intimate to SECP as per pervious companies ordinance. M/s Privileges Farms was registered in 2006 while the amount received from NICL was deposited in the account, opened on February 4, 2010, in Dubai Islamic Bank, Gulberg, Lahore. Subsequently, the amount was transferred into personal /joint account of Directors of M/s Privileges Farms Limited.