PESHAWAR - KP Chief Minister Pervez Khattak has put his weight behind provincial Finance Minister Muzaffar Said after he was accused by the Bank of Khyber of using its funds and resources for political objectives and gatherings, and pressuring bank’s management for illegal recruitments.

Calling the Jamaat-e-Islami (JI)-affiliated minister an honest and fair person, and terming the bank advertisement ‘improper and excess of limits’, the CM ordered an inquiry into the matter.

Earlier on Saturday, the Bank of Khyber (BoK) formally issued a charge-sheet against the provincial minister, alleging that he has been involved in elevation of officers to senior positions due to affiliation with a certain political party.

The bank in a quarter-page advertisement, appearing on the front pages of most of the newspapers, also accused Muzaffar Said of making interference in the affairs of the board of directors (BoDs) of the BoK.

The accused minister has denied the allegations. Muzaffar said he did not use bank for personal or political benefits. “If the appointments were not made on merit, an inquiry should be launched against me to prove me guilty,” he added.

Terming the allegations baseless, JI KP Ameer Mushtaq Ahmad Khan said that it was a conspiracy to stop introduction of Islamic banking system in the BoK for which they would go to any length.

The bank in its ad, titled “Finance Minister KPK Unaware of Corporate Governance Rules: Upset over Management Refusal to Entertain his Various Demands”, further alleged that the minister had also been involved in arranging functions and gatherings at the bank’s cost, by using the bank resources for his political aims. Also, he hired people through backdoors in connivance with his favourites in the bank, it further alleged.

Apart from the finance minister, his private secretary Mr Khalil-ur-Rehman directly interferes in the bank affairs by pressuring the management with illegal recruitments through backdoors, postings and transfers, the advertisement added. By using his position as private secretary to the finance minister, he has been profiting from inductions in Class IV appointments, it added.

Continuing the volley of allegations, the ad further revealed that it is a pity that the finance minister, who had remained in office for the last one and a half-year, neither has understanding of how a financial institution functions nor he knows much about the corporate governance structure of a bank.

It said that corporate bank rules require banks to be governed by a board of directors (BoDs). The government having majority of shares (70 percent of the total) has a right to appoint the board chairman, the managing director, and three nominee directors. The additional chief secretary is the chairman and secretary finance is one of the directors.

The BoK is therefore not under the supervision of the finance ministry of the KP and rules prohibit any interference by the government since the government’s interests are being looked after by its directors on the bank’s board. This fact has also been pointed out by the State Bank of Pakistan, it explained.

The recent activities of the KP finance minister to malign the bank are due to his resentment over the management’s refusal to induct his political nominees in the bank in violation of the merit and procedure as well as opening of branches, it maintained.

It said that the finance minister had made certain false allegations against the BoK to malign and pressurise the management. The BoK investigated the matter in-depth and it was found that the minister in convince with certain elements within the bank initiated a smear campaign against the bank.

The advertisement further disclosed that in the past the BoK had been used as midwife for political hiring and other benefits. The data revealed that previous governments used the bank for political gains by employing people and extending loans to the dear ones as well as financing their political activities through the bank.

In the past the bank was just surviving. The PTI government ushered in change, appointed a permanent MD, and fully empowered the BoDs. This made various vested interests very unhappy. The employees, who are not delivering or inducted on political references are now at risk of dismissal, it informed.

Taking cognizing of this malignment, the board has authorised the management to take all necessary actions against employees and political figures. In this connection, defamation suits are also being considered for initiation. Moreover, the provincial government has formally initiated an inquiry against its staff regarding leakage of confidential information.

A senior officer told The Nation that service of at least five office-bearers of the Officers Association of the BoK has been terminated for ‘leaking confidential information’. He said the president, vice president, general secretary and two other officials of the association have been removed from their posts with the approval of the BoDs.

The bank clarified that alleged privatisation of the BoK is not under consideration, adding that this issue pertains solely to the working of the bank and there is no involvement and interest of the PTI government, the chief minister, the chief secretary, or any of the PTI ministers, it made it clear.

The allegations that the bank management has recently hired 450 employees is factually incorrect, it said, adding that BoDs approved 180 vacancies against which 133 employees were hired in 2015 by strictly following the hiring parameters, while of the total 233, only three have been hired so far in 2016. Majority of these appointments are at entry level and the hiring was made mostly for expansion of braches.

About the Voluntarily Separation Scheme (VSS), it said that it is a voluntary scheme which allows employees to voluntarily opt to retire from service in a dignified manner. It is clarified that VSS is offered under no compulsion, coercion and undue influence. It is also clarified that VSS is not linked with privatisation in any manner.

Eligibility for availing VSS scheme is 50 years of age above with minimum 5 years of continued services. In all grades only 132 employees are eligible for VSS and total financial impact if all employees opt for the scheme would be Rs476 million not Rs2 billion, it is materially incorrect and false.

Adviser to PM Ameer Muqam demanded Chief Minister Pervez Khattak to resign along with his cabinet after appearing of the BoK advertisement of corruption by the provincial finance minister.

Khattak was reported as saying that the BoK advertisement was not only condemnable but also an immoral and illegal act. He said that the resources of the bank are being used for character assassination of the finance minister.

The chief minister expressed satisfaction that under the leadership of Muzaffar Said, finance department was progressing towards the rights of the province, effectiveness of institutes and achievement of targets.

Muzaffar Said is from Jammat-e-Islami which is in coalition with Pakistan Tehreek-e-Insaf (PTI) in KP. Elected as MPA from PK-94 (Lower Dir-I), he was given the charge of finance ministry after JI’s central Ameer Sirajul Haq became senator in October 2014.

Muzaffar also remained a nazim of (Islami Jamiat Tulba) IJT, a student organisation of the JI. He did his masters in Pakistan Studies from the University of Peshawar and LLB from the University of Karachi.