Daily Times

ISLAMABAD: Hearing a suo motu case pertaining to waiving off Rs 54 billion loans during the regime of former president Gen (r) Pervez Musharraf, Chief Justice of Pakistan (CJP) Mian Saqib Nisar on Sunday issued notices to 222 beneficiaries, who had illegally gotten their loans written off.

The CJP while heading a two-member Supreme Court bench made it clear that all the people who got their loans written off illegally on political basis or otherwise would have to return their loans to the national exchequer.

Additional Attorney General told the court that the State Bank of Pakistan (SBP) Governor had submitted the summary of the report of the ‘commission on loans write-off’.

The CJP noted that according to the summary 222 people had gotten their loans written off illegally. He then issued notices to all such people directing them to personally appear before the court on June 8. The chief justice noted that action would also be taken against all those who illegally waived off the loans.

On the last hearing of the case, the chief justice had said that assets of those who would be unable to return the illegally waived off loans would be auctioned.

Former CJP Iftikhar Muhammad Chaudhry had taken suo motu notice of the waived off loans after a press report based on a secret report submitted to the Public Accounts Committee (PAC) of the National Assembly had stated that 50,427 defaulters, including political leaders, civil and military business concerns and business tycoons of Karachi, Lahore and other cities were favoured through the ‘loans write-off scheme’.

It had named former chief ministers of two provinces as beneficiaries of the scheme.

Some foreign firms and multinational companies and a private bus service operating from Lahore to different cities in Punjab were also extended the facility.

Soon after the October 2002 elections, the then finance minister, Shaukat Aziz, and his team at the SBP had allegedly approved the loan write-off scheme after “succumbing to pressure from certain top leaders of the ruling party to ease financial burden on their business concerns”, the press report had stated.

The SBP issued an incentive scheme to the banks and DFIs in October 2002 for waiving the non-performing loans of organisations showing ‘loss’ for three years or more. Three categories were made to deal with the cases: category A included loans up to Rs 500,000, category B from Rs 500,000 to Rs 2.5 million and category C included non-performing loans of more than Rs 2.5 million.

The big business concerns exploited the third category to get billions of rupees outstanding against them written off. On the other hand, the banks and DFIs were asked to recover maximum possible amount to settle loans falling under categories B and C through forced sale of available assets, the report had said.

The purpose of the scheme was stated to clean the balance-sheets of the banks and DFIs. As a result of the scheme, the banks and DFIs settled cases involving an outstanding amount of Rs 80.656 billion.

Published in Daily Times, May 14^th 2018.