ISLAMABAD: Rs1 billion land scam before SC

[Lahore_Real_Estate]

By Rauf Klasra
A billion-rupee scam in the Commerce Ministry of Makhdoom Amin Fahim has quietly landed in the Supreme Court. NAB has now confirmed in its secret inquiry report before Chief Justice Iftikhar Muhammad Chaudhry that a dirty land deal had caused a Rs1.04billion loss to the nation.

The CJ had now been told in writing that the National Insurance Company Limited (NICL) of the Ministry of Commerce had struck a dirty land deal with a private company M/s Privileges, which caused a loss of Rs1.04 billion to the national exchequer.

The Supreme Court has been told in the NAB inquiry report (copy available with The News) that the NICL had purchased 803 kanals 19 marlas of land from a bidder (said to be the son of a former minister in the Musharraf regime) who did not meet the basic eligibility criteria/requirements as advertised by NICL and mentioned in the tender documents.

It said this huge deviation from the rules led to purchase of land at Mouza Toor Warraich off Ferozepur Road, District Lahore, at the rate of Rs2.1 million per kanal against the market rate of Rs325,000, thus causing a net loss of Rs1.04 billion to the national exchequer.

The SC has been told that M/s Privileges’ farms sold this remote land to NICL at very high price and billions of rupees have already been paid to the company in its new bank account, opened in February 2010 in Gulberg, Lahore, for the exclusive purpose of money transfer by NICL from where it was immediately shifted to personal bank accounts of powerful directors of this private company.

The inquiry report, containing explosive material, has been submitted before the chief justice of Pakistan after he had ordered NAB to conduct an inquiry into this deal which was struck with the scions of some powerful politicians, belonging to both ruling and opposition parties in Centre and Lahore.

One official inside source said three offspring of three top politicians—two former and one sitting ruler at Islamabad—were part of this gang which had allegedly robbed the nation of its Rs1.04 billion.

The NAB inquiry report said dirty deal was struck by NICL, when it had bought land from M\s Privileges at Rs2.1 million per kanal against market rate of Rs312,500-437,500, thus causing a loss of Rs1.04 billion to the national exchequer/NICL.

The report said 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, 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 Rs312,500 to RS437,500 per kanal, whereas NICL purchased at exorbitant rate of Rs2.1million per kanal, thus causing a loss of RS1.04 billion to national exchequer/NIC.

It said, in absence of basic requirement/eligibility of having 100 percent ownership record, Ms 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.

NICL hired two evaluators registered with Pakistan Banking association named as M/s Medallions Limited and M/s SA Associates for valuation of land, but the Board of Directors of NICL approved to purchase the 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 said on the PBA panel, 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 Privilege Farms thus causing loss to NICL.

M/s Privileges, seller of the land to NICL, was registered with SECP. Directors of M/s Privileges issued 35.5 million shares of Rs10 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 Feb 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.

Talking to The News, Federal Commerce Minister Makhdoom Amin Fahim said he would not make any comments on the contents of the NAB inquiry report, submitted before the SC as now the matter was in the court. Federal Minister Fahim, who is now facing some serious questions about his role in the whole dirty deal, however, hoped that the SC would have a fair trial of the case and everyone would be given the chance to give his side of the story before the court.

The minister said that if there would be any wrongdoing in the land deal, it would also surface before the court, and if there was nothing wrong in it, then it would also become public. When asked about the role played in the deal by M/s Privileges, which is said to be owned by a son of a former minister of Musharraf regime, MAF replied that he did not know about it. This correspondent also made a call to the Federal Secretary, Ministry of Commerce, Zafar Mahmood, but he was also not available. A text message was also sent to his mobile, but no response was received till filing of this report.