Property sale won’t compensate BoP loss

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2012-07-26T00:57:38+05:00 Salman Abduhu

LAHORE – Properties sale will not compensate the loss in any mean, as the Bank of Punjab will earn just up to Rs1.534 billion from the sale of around 112 properties handed over by the defualters to pay off the loss of around Rs9 billion in Haris Steel fraud incurred to the bank about four years back in 2008.The bank has already sold out 29 properties worth Rs430 million while the process of 83 properties will be completed within the next six months, BoP officials said on Wednesday. They said that the bank is expecting to earn more than Rs1.104 billion from these properties, mostly commercial and located in DHA or cantonment area of provincial capital of Lahore. On the condition, that their names will not be mentioned, they told The Nation, that the bank has fixed the reserve price for each property which amounts to Rs1,104,593,424. But, they said, that the bank will earn more than this amount by at least 5 per cent, as this is minimum rate of the property.They said that the salvage committee constituted by the orders of Supreme Court of Pakistan on May 14, 2010, offered some immovable properties for sale, which have been surrendered by the accused persons in M/s Haris Steel Case in favour of the Bank of Punjab by entering into a plea bargain (voluntary return arrangement) with the NAB chairman. The arrangement was subsequently accepted by the Accountability Court vide orders dated 11-2-2010 and 13-2-2010.They said, on the order of the Supreme Court, Haris Steel Mills Chief Executive Sheikh Munir had deposited Rs500 million out of Rs9 billion Bank of Punjab loan case so far. They said that the BoP had granted Rs9 billion loan to the Haris Steel Mills, Lahore, without fulfilling legal requirements. Eventually, the Steel Mills defaulted the loan. Hence, the bank will be able to recover around Rs2 billion out of a total lost amount of Rs9 billion, the bank officials said.The BoP then filed a petition against the Haris Steel Mills. The court also asked the Bank to confiscate the property of Sheikh Afzal, the owner of Haris Steel. The court had also directed Sheikh Munir, brother of Sheikh Afzal, to deposit Rs500 million in BoP, besides surrendering property worth the same amount as a token of goodwill for resolving the case outside the court. The official sources said that the main accused involved in the Haris Steel scam Mr Haris, the son of Sheikh Afzal, alone owned about 130 luxury houses in the big cities of the Punjab, mostly in the posh areas of Lahore. The net worth of these houses is worth billion of rupees, according to the NAB findings. But he did not handed over these important plazas and luxury apartments.Responding to a question, the bank officials said that there is no risk in yellow cab financing as defaulted vehicles are being seized immediately through trackers. They said that the bank is charging the markup but not from the customers, rather the government is paying interest, which has been fixed on normal standard. They said that the BoP, which is the financer of the provincial governments 'Self Employment Scheme, has launched the project, keeping in mind that nowhere in the world leasing has ever been failed. The financing of taxis in Punjab is absolutely viable and the bank has watched its interest fully, claimed the officials, who are supervising the taxi scheme project financing.They said that there is no risk of any default, as the defaulter cannot run because his vehicle is identified through tracking system and is brought into the bank custody due to non-payment. They said the provincial government is providing cars on interest-free basis with down-payment of 20 percent. When asked that the vehicles will cost around Rs12 billion and who is bearing the expanses other than Rs4.5 billion, they said that the bank is bearing 80 percent of the financing and the customer is paying 20 percent.They said that more banks have shown interest to provide finance to expand this scheme further, as they have seen the success of the present scheme of interest-free provision of taxis to the public. Responding to a question, they said the scheme draws no parallel to the yellow cab scheme launched by the Nawaz Sharif-led government in 1992-93. 

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