Implicating textile industrialists in the Bank of Punjab scam has raised many eyebrows in textile industry, with majority pondering seriously over not accepting directorship from any public sector entity in the future to avoid disrepute. They said the textile industry representatives have been on the board of directors of Bank of Punjab since its inception.
The bank has been taking the representatives on-board to get more business from the textile industry, they added. However, recent press reports have suggested that leading textile industrialists on the BoD of BoP, during the regime of former Chief Minister Chaudhry Pervaiz Elahi, had borrowed from the bank in contravention of the bank's Act and thus committed a criminal breach of trust.
The textile industry circles stressed the point that the bank's law was very clear before 2009 on borrowing by the directors. According to Bank of Punjab Act 1989, only the person of the director of the bank was barred from taking loan but not his close blood relatives or spouse or undertakings, companies and firms with the only condition that such loans had to be approved by the bank's BoD in the absence of that particular director under the central bank's prudential regulations.
The industry circles said that companies of these directors, including sitting Chairman Aptma Gohar Ejaz, were doing business with the bank before their entry to the BoD of the bank. Also, they added, they were extended to the companies of these directors in their absence from the Board of Directors. However, present Punjab government amended Bank of Punjab Act, 1989 in December 2009 and put a bar on close relatives like spouse and all undertakings, companies and firms of a sitting businessman director from obtaining loans from the bank.
According to the sources, all press reports maligning the textile industry representatives on the Board of Directors of the BoP during Chaudhary's government are mixing amended law with the original one and misconstruing facts. They further said that the critics are also ignoring the fact that doing business with any bank is not a crime, especially when the bank has not taken any unsecured exposure in its business deal with directors. It is interesting to note that the President of BoP has admitted in his recent interviews that the loans extended to former directors are being paid back to the bank as per schedule.