Ministry of Commerce (MoC) has reportedly expressed its displeasure over top brass of National Insurance Corporation Limited's (NICL) failure to recover the looted money from the accused through courts and FIA, well informed sources told Business Recorder. The NICL scam was unearthed during the PPP government and millions of rupees were transferred to the accounts of the then Commerce Minister Makhdoom Amin Fahim. The then Board of Directors of the company was also allegedly involved in the entire scam.
According to details, the Supreme Court took a suo motu action on October 12, 2010 and initiated legal proceedings in suo motu case No 18/2010 regarding violation of Public Procurement Regulatory Authority (PPRA) Rules, 2004 in purchase of properties by NICL
Secretary Commerce on behalf of the State and on the directions of the Supreme Court, requested Federal Investigation Agency (FIA) to register five (5) First Information Reports (FIRs) against the then Board of Directors, CEO, Chairman and officers of the NICL who were involved in the alleged violations with following details:
1- Case No 1 The award of contract for paintings and supply of furniture to M/s Casa Bella (FIR No 13/2010 of November 22,2010. ( i) On the directions of Supreme Court, FIA initiated an enquiry to ascertain the real value of furniture and painting works. During its investigation, furniture and paintings were valued/assessed by renowned, architects M/s Nayyar Ali Dada & Associates who in their valuation report dated January 8, 2011 affirmed that the furniture and paintings (art work) quality is of good standard and price paid is reasonable. Therefore, no recovery has been initiated against M/s Casa Bella, Lahore so far; (ii) the accused, Casa Bella, were acquitted by the Court of Special Judge Anti-Corruption & Emigration (Central-l ) Karachi-II on November 22, 2011. The valuations carried out by Nayyar Ali Dada & Associates indicated that the purchase prices of furniture and art work were close to the market prices of similar quality items; (iii) all accused persons including absconder accused were acquitted; and (iv)
the court in its order on December 22, 2011 observed "the prosecution during investigation has collected evidence on record that MIS NICL has incurred no loss in awarding contract to MIS Casa Bella Lahore therefore, the evidence of corruption and criminal breach of trust cannot be sustained and requested the Court not to send the accused persons for trial."
2- Case No 2 Office space in Liberty Towers, DIFC Area, Dubai (FIR No 14/2010 dated 22-11-2010 - NAB Reference No 1 of 2014): in July 2009, NICL purchased 6 units I offices measuring 27,429 sq. fts in Liberty Towers, Dubai International Financial Center (DIFC) Area, Dubai at a cost of Rs 1,649,646,764 ($19,990,000 equivalent to AED 73,463,250) excluding levies of Rs 49,291,429 in July 2009 as per the approval of the then Board of Directors. NICL arranged a valuation of this property through M/s JAJ Consultants, Dubai who valued the property at AED 74,075,000 (Rs 1,741,332,480 equivalent to $20,909,372) on June 30, 2009; (ii) on the direction of Supreme Court, FIA initiated an enquiry and got the property valued from M/s Hamptons International, Dubai who valued it at AED 76,800,000 (Rs 1,692,609,180); (iii) on March 6, 2012, FIA headquarter Islamabad wrote a letter to the then Secretary Commerce, whereby MoC was informed that the Director General FIA has approved their recommendations made by the Director, FIA, Sindh, and directed to send the case to Ministry of Interior for withdrawal under Section 494 of Criminal Procedure Code; (iv) in the context of judicial proceeding against the procurement of six office units in Liberty House, DIFC Area, Dubai, no recovery has been initiated by the FIA; (v) Supreme Court in its final order of November 22, 2013, passed in suo motu case No 18 of 2010 transferred the instant matter to National Accountability Bureau (NAB): and (vi) all the accused persons were acquitted under Section 265-K of Criminal Procedure Code on December 22, 2014 and the case was disposed of by Accountability Court No III Karachi. The NAB has filed criminal acquittal appeal against Order of December 22, 2016 before Sindh High Court, which is pending for arguments.
3- Case No 3 10 Acre Plot situated at Korangi, Deh Phihai, Karachi (FIR No 21/2010, dated 22-11-2010, NAB Reference No 14 of 2014): NICL purchased 10 Acre land situated at Korangi Deh Phiahi, Karachi as per the approval of the then Board of Directors from Khalid Anwar at a cost of Rs 900 million excluding government levies. The sale agreement in this respect was duly executed on August 19, 2009, possession was handed over to NICL, title was duly transferred in the name of NICL vide conveyance deed dated August 21, 2009 and mutation was done on November 20, 2009. Prior to purchase of the said land, Pakistan Banks' Association (PBA) approved valuer namely Consultancy Support Services Limited was commissioned by NICL for carrying out the land pre-purchased valuation which valued this land at Rs 92.5 million per acre (ie Rs 925 million in total) on June II, 2009. Further, in response to a letter of NICL No NICLILD/HO/85 dated June 9, 2009 the Executive District Officer (Revenue), City District Government Karachi in its letter No EDO/REV/1473/2009 mentioned that the cost of per acre of this land as informed by the District Officer (Revenue), City District Government Karachi vide its letter No O/REV/K/R.B/3478/2008 dated July 30, 2008 was Rs 90.50 million per acre (Rs 905 million). However, he subsequently rescinded his own statement alleging it to be or fake document and disowning his signatures thereon.
Prior to the registration of an FIR, the complainant namely the Ministry of Commerce, got an independent valuation done on the orders of the National Assembly Standing Committee on Commerce by a State Bank approved valuer namely M/s Eastern Surveyor, who valued the land at Rs 975 million on April 3, 2010. After registration of an FIR, FIA and NICL got a valuation of the land in question done by another State Bank of Pakistan approved valuer namely M/s Ahmed Associates who valued the land at Rs 925 million on December 6, 2010. Later, FIA/NICL got yet another valuation done of the same land by the same valuer at Rs 700 million as at August 2009 on January 5, 2011. Finally, on March 03, 2011 FIA and NICL got another valuation of the land done by National Engineering Services Pakistan (Private) Limited (NESPAK) which valued the land at Rs 412.61 million as on July 2009.
NICL in its written documents claimed that Khalid Anwar, the seller of the plot/land, then volunteered to conditionally deposit the differential amount of Rs 490 million. The entire amount of Rs 490 million, recovery based on NESPAK valuation, has already been received from the said seller and credited to NICL' s bank accounts. Thus no amount is outstanding in this case. Integrity Pact was signed before purchasing the above property under the PPRA rules. Its application however is subject to a decision of the trial court.
The Supreme Court vide final Order of November 22, 2013, passed in suo motu case No 18 of 2010, the instant matter was transferred to National Accountability Bureau (NAB). The matter was pending before Accountability Court No III at Karachi, which was fixed for hearing on November 25, 2016 for examination / cross-examination of last prosecution witness namely Siraj Panhwar, Inspector/Investigation Officer, FIA, Corporate Crime Circle, Karachi and was adjourned until December 19, 2016 without any proceedings due to absence of main accused Ayyaz Khan Niazi.
4- Case No 4: 803 Kanal 19 Marala, Moza Toor Warraich, Lahore (FIR No 24/2010 dated 12-10-2010, NAB Reference No 4 of 2014): In March 2010 as per the approval of the then Board of Directors, NICL purchased 803 Kanals of land from M/s Privilege Farms (Private) Limited situated at Mouza Toor Waraich, Tehsil Cantt., District Lahore to launch a housing society for its employees. The pre-requisite for bidding was that only those owners of land could participate in bidding who were owners of hundred percent of required land and certain areas were specified where land was required. Five different companies, including M/s Privilege Farms (Private) Limited, participated in the said bidding. The rates and locations offered by the rest of the four companies were apparently favourable for NICL but despite that all the said four companies were technically knocked out and disqualified and the bid of M/s Privilege Farms (Private) Limited was accepted. This is said to be despite the fact that the said M/s Privilege Farms (Private) Limited was not the owner of 803 Kanals of land which was a pre-requisite to participate in the said bidding. The land measuring 699 Kanals was owned by the family members of accused Habibullah Warraich whereas 104 Kanals of land was purchased from Khizar Hayat's family through accused Akram Warraich being the general attorney. The said land was sold to NICL at Rs 2,100,000 per kanal; whereas the said company had purchased 104 Kanals of land which was adjoining to the said 699 Kanals of land of Habibullah Warraich family at a very low rate of Rs 200,000 per Kanal in the same year (2010). The entire amount of Rs 1,686,300,000 was paid to M/s Privilege Farms Private Limited without registering the sale deed, mutation and possession in favour of NICL.
The legal counsel for the petitioner Habibullah Waraich contended that the petitioner has no concern whatsoever with the affairs of M/s Privilege Farms (Private) Limited; he has been implicated in this case for the reason that his real son, co-accused Mohsin Waraich, was managing director of the Privilege Farms (Private) Limited and that no portion of the sale proceed of the land sold to NICL was credited into the account of the petitioner. However, an amount of Rs 447,854,462 was transferred into a joint account of the petitioner and Mohsin Waraich, wherefrom, the petitioner withdrew an amount of Rs 197,262,500. However, both the standing counsel, under instructions from the investigating officer, stated that except this transaction, there was no other evidence against the petitioner.
Privilege Farms (Private) Limited offered to return entire amount of sale proceeds to NICL after cancellation of the deal, which was accepted by NICL. The entire payment of Rs 1,686,300,000 was recovered. The Supreme Court in its order of December 22, 2013, passed in suo motu case No 18 of 2010 transferred the instant matter to NAB. In this case all the accused persons were acquitted under section 265-K of Criminal Procedure Code on January 19, 2015 and the case was disposed of by Accountability Court No II Lahore. NAB has filed Criminal Acquittal Appeal against this acquittal before the Lahore High Court, which is pending.
5- Case No 5: 20 Kanal2 Marla Airport Road Lahore (FIR No 29/2010 dated 13-11-2010, NAB Reference No 5 of 2014): NICL purchased 20 Kanal 2 Marla plot of land in July 2009 as per the approval of the then Board of Directors from Mohsin Habib Warraich situated at airport road, Lahore. NICL paid Rs 1,065,300,000 to the seller (Mohsin Habib Warraich) as price of land. Sale deeds were executed in July 2009 in favour of NICL and the land was duly mutated / transferred. NICL arranged valuation of this land from M/s Tristar International who valued it at Rs 1,326,000,000 in June 29, 2009. Another valuation arranged by NICL from M/s Madallion Services resulted in valuation of this land at Rs 61,500,000 per Kanal (totaling Rs 1,236,150,000) on June 16, 2009.
On a subsequent valuation arranged for and conducted on the instructions of Ministry of Commerce, Islamabad in March 2010 the valuer M/s S. A. Associates determined the value of the land at Rs 1,266,300,000. During the course of investigation, FIA arranged valuation of the property through M/s Ahmed Associates in December 2010, who valued the property at Rs 984,900,000 as in July 2009 on December 20, 2010. Mohsin Habib Waraich conditionally deposited the differential amount of Rs 80,400,000.
Subsequently, FIA arranged another valuation of the property through NESPAK, who assessed the value at Rs 562,500,000 with a differential recoverable amount of Rs 502,800,000. According to NICL management, facilitated by FIA Lahore, Mohsin Habib Warraich sent a letter to NICL on March 26, 2011 offering to settle the differential amount as per valuation carried out by NESPAK. The property was purchased for Rs 1.0653 billion by NICL and was valued by NESPAK at Rs 562.5 million. Out of the differential amount of Rs 502.8 million, NICL had already received Rs 80.4 million based on a previous valuation report leaving a balance of Rs 422.4 million which was to be recovered under the above proposed plan.
NICL preferred an upfront payment of entire amount through liquidation of properties seized by FIA which was conveyed to FIA through NICL's letter of March 27, 2012. However, the accused made a conditional offer spread well out in the future till 2016 on a biannual instalment basis with the first payment due on April 1, 2012. Most important condition for acceptance was that Warraich would mortgage 803 Kanal property in favour of NICL as a guarantee against cheque/payment default.
On April 4, 2012 Chaudhry Akram Warraich, as attorney for Mohsin Warraich, filed an application in the court of Special Judge Lahore and offered settlement of differential amount based on NESPAK valuation. It was facilitated by FIA Lahore and currently accepted by NICL; the court approved it through an order on the same day. The representative of NICL / Zonal Head, Lahore was handed over ten post-dated cheques regarding payment/clearance of differential amount.
Akram Warraich meanwhile filed a civil suit praying he has no connection with the case and the post-dated cheques he had given to NICL in the court should be returned. Mohsin Warraich has also filed a civil suit challenging the NESPAK valuation report and that recovery against this property should not be carried out. Both cases were dismissed.
On April 2, 2012 the cheque (Rs 42 Million) given to NICL as first instalment under the proposed payment plan in the form of an order of the Court of the Special Judge Lahore, was dishonoured due to lack of funds. Subsequently all cheques were dishonoured, consequently a Criminal Case (FIRs) were registered against Chaudhry Muhammad Akram Warraich.
Commerce Ministry has been informed that this deal was facilitated by the then FIA Lahore because NICL had no direct contact with the accused in the case. NICL had serious reservations about the offer but accepted it because a court order supported it and security was offered through mortgage of properties. The properties had not been mutated in Warraich's name and had other issues therefore Akram Warraich did not fulfill this condition. NICL had to go to the court again for review/modification of the April 4, 2011 order of the Court of Special Judge (Central), Lahore. The matter was still in the court. The entire amount of Rs 422 million is still to be recovered as a result of this deal.
The only recovery against this property was through a Pay Order of Dubai Islamic Bank of December 31, 2010 for Rs 80,400,000/-, balance of Rs 422.4 million is yet to be recoverable.
The matter was pending before Accountability Court No II at Lahore, which was fixed for hearing on November 26, 2016 for examination / cross-examination of prosecution witnesses. The case was adjourned on the request of NAB without any proceedings until December 13, 2016.
The sources said, NICL has given a presentation to the Commerce Ministry on all the cases pending in the courts and hiring made by the former top bass of the company. The Ministry was furious on the NICL management for not properly pursuing the cases and shifting the responsibility to the FIA. Prime Minister's Office was also actively taking up the issue of recovery with the Commerce Ministry but indifference on the part of NICL management in pursuing the case has put the Ministry in an embarrassing position at the highest level.
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