ISLAMABAD - Exasperated over the written-off loans on a political basis, Chief Justice Mian Saqib Nisar on Thursday expressed his determination to recover the illegally revoked loans, which may entail the seizure of the beneficiaries’ assets.

The chief justice observed that “it was a message to those who have waived-off the loans illegally that this money will be recovered even if such a step requires the seizure of the shares, units or assets. Every single penny will be collected from them”.

The observed this while heading a three-judge bench which took up the Rs54 billion written-off loans case.

The bench was informed by a representative of the National Bank of Pakistan (NBP) that the loans were written-off on the basis of a circular issued by the State Bank of Pakistan (SBP). He argued that the commission which was formed to look into the matter, chaired by Justice (retd) Syed Jamshed Ali, has declared the matter as “a past and a closed transaction”. 

The chief justice responded that seemingly the report of the commission was interim and not final while no action has been taken on the report and the matter had been pending adjudication since 2007.

The ‘Commission on Written-Off Loans’  in its report had intended to examine all cases in detail individually, hear and examine various stakeholders, the beneficiaries of the write-off, seek further information/clarifications/documents from the banks, invite suggestions from the general public and then to submit the final report.

During the course hearing, the SBP representative informed the bench that it has submitted a reply on the report of the commission. The chief justice responded that he was fixing the cases which were dumped. He observed that some people have waived-off the loans on the political basis.

Additional Attorney General Chaudhry Amir Rehman told the bench that 223 cases of write-off loans were suspicious.

The chief justice observed that in most of the cases, the NBP waived-off the loans including that of Waheed Textile, Ayesha Textile, Avari Hotel. The top judge questioned, “what is the progress of action taken against them”.

Those whose loans were illegally written-off on political basis will be issued notices for recovery, the judge said.

Petitioner Barrister Zafarullah contended that loans of over Rs500 billion were written-off.

He said that former prime minister late Benazir Bhutto, former premier Nawaz Sharif, former prime minister Yusaf Raza Gillani, Chaudhary brothers and other politicians were also included in the list of beneficiaries. 

The chief justice vowed that the illegally written-off loans will be recovered.

The bench directed the SBP to conduct an analysis of the commission report covering those references which could not be opened and reasons due to which the cases were not opened.

The bench further directed the SBP to file a report after analysis within one-week.

According to the observations of commission’s report, the information provided to it in a majority of cases for the period 1971-1992 was incomplete, while in some cases, no record was made available to the commission on the ground that it could not be traced or that it was burnt.

“About the foreign currency loans, the devaluation of the currency has a direct impact on the principal amount which also results in the enhanced amount of interest. During the period 1971-91, massive devaluation of currency was done with the result that despite repayments of huge amounts in addition to the principal, substantial amounts had to be written-off due to the devaluation of the currency,” the commission report had observed.

The commission had observed that there was no effective system of accountability in the banks/financial institutions adding that the commission has noted long and culpable delays in initiating legal action.

“Despite factors unfavourable to the trade and industry prevailing in the country during the 1970s, the preliminary examination of all the cases of the said period shows that the performance of the banking sector was not bad inasmuch as that out of 120 cases submitted to the commission, 36 cases were related to the public sector commercial banks while 80 related to the PICIC/NIB and IDBP. These cases involved seven banks/DFIs in over 21 years and despite lapses in certain aspects, the average per year per bank comes to less than one case.