NAB files reference against 13 persons

National Accountability Bureau (NAB), Karachi has filed reference against 13 persons over the allegations of illegal investment and restructuring of investment amounting to Rs 100 million in First Dawood Investment Bank Ltd (FDIBL) by National Insurance Company Ltd (NICL) during 2008-09.
The reference has been filed on the allegations of illegal investment and restructuring of investment amounting to Rs 100 million in FDIBL by NICL during 2008-09.
The said investment was made by the accused 13 persons in purported violation of policy and with the mala-fide intention of illegally favoring FDIBL by boosting their financial health. The illegal investment caused loss the national exchequer to the tune of Rs 64.057 million.
According to the reference, an inquiry was authorized into the matter of NICL on the direction of Supreme Court of Pakistan. The allegations in inquiry were substantiated and same was converted into an investigation in September 2015 by the competent authority.
The investigation revealed that NICL management on November 2008 made an irregular investment of Rs 100 million as certificate of Investment (CoI) with FDIBL on the offer to return at the rate of 18.5 percent per annum for a period of six months. The said investment was made in violation of Finance Division OM. However, FDIBL failed to return the principal amount of Rs 100 million on date of maturity.
Moreover, in-house committee of NICL recommended investment of Rs 100 million with FDIBL during its 41st meeting held on 19-11-2008. The said recommendation was unlawfully approved by the ex-chairman and CEO NICL without seeking approval of investment committee of the board or board of Directors. The in-house committee was not vested with the power to invest the amount. The FDIBL made an offer for investment on November 20, 2008 but the investment was approved on November 19, 2008.
It was further revealed that FDIBL defaulted in encashment of COI on date of maturity, thereafter offered various options to NICL for settlement viz properties, privately, placed Term Finance Certificates and its own Preference Shares for settlement of COI of Rs 100 million.
Furthermore, the preference shares of FDIBL were accepted at the rate of Rs 10 per share, albeit the same was trading at the rate of Rs 2.76 at time of re-structuring and further fell to Rs 1.10 per share at the time of maturity. The accused persons, member of BOD and aforesaid mentioned committee, unlawfully recommended and approved the restructuring of shares and PPTFCs which was in violation of Finance Division OM. The said conversion of shares provided a serious financial shock of Rs 64.057 million to the national kitty.