ISLAMABAD - The Supreme Court on Tuesday gave last chance to 222 companies, involved in getting huge loans waived off, to either pay 75 percent of the principal amount from the written-off loan or face trial in banking courts along with attachment of properties and assets.

The court also directed the 222 companies, loan defaulters, to submit their response on next date of hearing scheduled for today.

Earlier in May, the top court had issued notices to 222 individuals who got their loans written off to the tune of Rs54 billion from different banks through their companies.

The proposal was given by Chief Justice Mian Saqib Nisar, heading a three-judge bench, during the hearing of suo moto case regarding Rs54 billion written-off loans.

Hinting that the recovered amount could be utilized to pay the country’s debt, the chief justice remarked every citizen was in debt of more than Rs0.1 million due to the international loans. He further observed that each penny will be recovered.

The chief justice said those who got loans waived off had two options adding that the first option was to pay back the 75 percent of the principal amount and get his case disposed of while the second option was to face the trial in banking court.

The chief justice also made it clear that those want to contest in banking court will not only have to pay the principal amount but they will also have to pay the mark-up as of current evaluation.

He further observed that the properties of those inclined to contest in banking court will also be attached till the final determination.

He further observed that the cases of those loan defaulters, who were not appearing in the instant proceedings, will be decided ex-parte.

Barrister Zafarullah Khan, who is the applicant in the case, contended before the top court that the companies borrowed money without any mortgage or guarantee adding that PML-Q chief Chaudhry Shujaat borrowed money on personal relations.

Khan requested the bench to refer the matters to banking court after examining each case by itself.

He further stated that Chaudhrys, Saifullahs, Jatois, Legharis, Tawakals, Saigols, Jams, Generals and other big fishes got their loans written off.

The chief justice observed that it was public money and settlements between banks and parties were made by politicians and lawyers at that time.

It is pertinent to mention here that 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 write-off, seek further information/clarifications/documents from the banks, invite suggestions from the general public and then to submit the final report.

According to the Commission’s report, the information provided to it in majority of cases for the period 1971-1992 is 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 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 currency,” the Commission report had observed.

The Commission had observed that there is 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 1970s, the preliminary examination of all the cases of the said period shows that the performance of the banking sector was not bad in as much as that out of 120 cases submitted to the Commission, 36 cases related to the public sector commercial banks while 80 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. During this period, against total amount advanced of Rs2108.789 million, the amount paid by the borrowers or recovered was Rs2975.850 million and the amount written-off was Rs2145.190 million.”

“As far as the period 1992-2009 is concerned, the information supplied to this Commission so far shows total amount advanced as Rs52,541 million, amount repaid as Rs34, 317 million and total principal amount written off as Rs24,564 million while the interest/other charges written off as Rs61,747 million.”

Khan’s application further claimed that the staggering amount of Rs125 billion was waived off as ‘bad debts’ during the tenure of ex-Governor SBP Dr Ishrat Hussain and former finance minister Dr Shaukat Tareen.

It further claimed that Rs125 billion were written off during the tenure of General (r) Pervez Musharraf and former prime minister Shaukat Aziz from 2000 to 2006.

“According to reports, large numbers of loans were written off under the Circular No.29/2002, issued by the State Bank Of Pakistan of major beneficiaries had been politicians and industrialists. This Circular No 29 /2002 was for only one year from 2002 till 2003, but this waiving of loans continued till 2007 even when new ex-Governor of SBP Shamshad Akhter superseded the previous governor of SBP,” the application stated.

The names of PML-Q Ch Shujaat Hussain and former chief minister Punjab Pervez Elahi were found in the list of 1000 influential businesses, the application stated.

The application further stated that some army men who got their Rs18 billion written off from the government owned banks while Chaudhry’s family got its Rs1.20 billion loans written off from three banks including National Bank of Pakistan, United Bank Limited.

“These facts as stated were taken out from the record of National Assembly Library. But their names did not appear in the notices issued by this Court,” the application stated.

 

Pay 75pc loan amount or face trial, SC asks defaulters