The Supreme Court of Pakistan is all set to hear on Tuesday the land purchase scam of National Insurance Corporation of Limited (NICL), involving billions of rupees.. The suo motu case will be heard by a three-member bench, headed by Chief Justice Iftikhar Muhammad Chaudhary.
Notice has been issued to NICL Chairman Ayaz Niazi regarding violation of Public Procurement Rules, 2004 in land procurement at rates above market value, which caused loss of billions of rupees to the exchequer. On a complaint filed by Transparency International Pakistan, the apex court had directed the National Accountability Bureau (NAB) to investigate the accusations of corruption in the land procurement near Lahore, owned by a former PPP MNA, Habib Ullah Warraich, by NICL. The NAB, in its report confirmed that NICL had caused Rs 1.045 billion loss to national exchequer in procurement of 803 kanals and 19 marlas land near Lahore.
Official documents, available with Business Recorder, confirm that the NICL abused Public Procurement Regulatory Authority (PPRA) Rules. NICL Chairman was reportedly the key man who struck a deal with the landowner with the approval of the Board of Directors, duly represented by Commerce Ministry.
The NAB in its inquiry report, which was completed more than one month ago, made the following startling revelations: (i) 100 percent ownership record of land offered by Privilege Farms Pvt Ltd was not verified by NICL from concerned departments; (ii) Punjab Board of Revenue confirmed that a vast gap existed between the market sale price of land and the price on which NICL purchased the land. The revenue staff of concerned areas reported that the market price of the purchased land was in the range of Rs 3,12,500 to Rs 4,12,500 per kanal, whereas NICL purchased it at exorbitant rate of Rs 21,00,000 per kanal, causing loss of approximately Rs 1.045 billion to national exchequer/NICL; (iii) In the absence of basic requirement/eligibility of having 100 percent ownership record, Privilege Farms was unable to qualify for award of contract; even then the management of NICL not only awarded the contract and made the payment but also violated PPRA Ordinance/Rules, and purchased the land located in a remote area at exorbitant rates causing loss to the national exchequer which reflected misprocurement, corruption and fraudulent practice; (iv) NICL had hired two evaluators registered with Pakistan Banks Association (PBA), named as Medallions Pvt Ltd and S A Associates, for valuation of the land but the Board of Directors of NICL approved to purchase the land five days before receipt of report from one of the two evaluators.
This haste creates suspicion and reflects the mens rea (criminal intent) of the management of NICL; (v) On the panel of PBA, the concerned evaluators not only quoted high rate in a remote area but also manipulated the rates in favour of interested party ie Privilege Farms, thus causing loss to national exchequer; (vi) Privilege Farms, seller of the land to NICL, was registered on May 18, 2006 with SECP. Director of Privilege Farms issued 35.78 million shares of Rs 10 each against purchase of land but did not intimate to SECP as per provisions of Companies Ordinance; (vii) Privilege Farms was registered in 2006 while the amount received from NICL was deposited in an account opened on February 4, 2010 in Dubai Islamic Bank, Gulgerg Branch, Lahore. Subsequently, an amount was transferred two personal joint accounts of Directors of Privilege Farms. (viii) During inquiry, the complainant to Supreme Court of Pakistan was revealed as real brother of the failed bidder Danish Ahmed, owner/ Director of Dream Resort Limited; (ix) During inquiry following price/value of 803 kanal and 19 marla land located at Mouza Toor Warraich, off Ferozepur Road, Tehsil Cantt, District Lahore, this was revealed: valuation table price/schedule rate- Rs 0.1 million per kanal; average sale price -Rs 0.109 million per kanal; market price - Rs 0.312 million per kanal; price paid by Privilege Farms Pvt Ltd- Rs 0.5 million per kanal; price offered by unsuccessful bidder - Rs 0.8 million per kanal and price paid by NICL- Rs 2.1 million per kanal.
Inquiry report concluded that prima facie the management of NICL failed to observe PPRA/government rules in purchase of 803 kanal, 19 marla land from a bidder who did not meet the basic eligibility criteria/requirements as advertised by NICL and mentioned in the tender documents resulting in purchase of the subject land at exorbitant rates. However, Transparency International Pakistan was of the view that loss to national exchequer was Rs 1.45 billion, instead of Rs 1.045 billion, as calculated by NAB officials.
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