NAB Karachi calls NICL board member in Rs2bn fraud case

Pakistan Today

ISLAMABAD: The National Accountability Bureau (NAB) Karachi, which is investigating the case related the to illegal investment of Rs2 billion in Jahangir Siddiqui Investment Ltd (JSIL)-National Insurance Corporation Limited (NICL) during year 2009, has called up former member board of directors of NICL, Javed Syed, for further investigation.
According to official sources, NAB through an Aug 28 letter has asked the former NICL board member to appear before the bureau in the first week of September for further investigation against against Ayaz Khan Niazi, ex-chairman, NICL, management of JSIL and others regarding illegal investment of Rs2 billion in JSIL during 2009.
Referring to the NAB’s reference of July 10, 2018, the letter said, the competent authority has taken the cognizance of subject offence and authorized investigation on allegations of misuse of authority by making irregular investment and disinvestment of Rs2 billion in JS Principal Secure Fund-I during year 2009-10, punishable under National Accountability Bureau Ordinance (NAO) 1999.
According to the letter, the investigation has revealed that NICL board member Javed Syed in the year 2009-10 had played a role in making an investment of Rs2 billion in JSIL, which caused loss of millions of rupees to the national exchequer. Besides, the former member of the board also possesses information and evidence which relates to the said offence.
As per the official source, the Javed Syed was called upon to appear before Combined Investigation Team (CIT) of the bureau on July 16, 2018. However, he had not appeared before the bureau. He was again called to appear in person before CIT Nab Karachi in the first week of the ongoing month.
Earlier, on August 1, 2018 the Sindh High Court had granted bail to former NICL chairperson Ayaz Khan Niazi in a corruption reference worth billions of rupees. NAB wanted to arrest him in a reference filed in Karachi.
Later on August 10, Supreme Court had barred NAB from arresting the Ayaz Khan Niazi in a corruption reference pertaining to purchase of real estate at exorbitant rates. While hearing the case, Chief Justice of Pakistan (CJP) Mian Saqib Nisar remarked that “two inquiries were underway against Niazi”.
It may mention here that NAB had launched an inquiry against JS Investments for defrauding the NICL of Rs 2 billion after SHC allowed the anti-corruption watchdog to investigate the scandal in light of a Supreme Court verdict. Earlier, NAB was ordered to investigate into the scam through a suo motu taken by Supreme Court wherein Auditor General of Pakistan had identified a loss of over Rs 255 million caused to the NICL by JS Investments – the loss amount runs into billions of rupees if the opportunity cost is taken into account. The JS Investments used various tactics to hinder the investigation process though illegal means when NAB started the investigation.
The JS Group company had caused the NICL to invest an amount of Rs2 billion in the JS Principal Secure Fund I in clear violation of the Finance Division’s instructions dated July 2, 2003, wherein the approval provided for the purpose was only for Rs200 million.
The auditor general of Pakistan in its report identified illegal and unjustifiable practices of JS Mutual Funds such as charging excess backend load of 5 per cent, etc, besides violation of instructions issued by the Finance Division.
When NAB launched its inquiry, it was challenged by the JS Investments in the court making FIA, NAB and SECP as respondents, obtaining a restraining order on April 23, 2014.
On February 11, 2015, FIA Inspector Gulsher Mugheri on behalf of FIA, NAB and SECP submitted an incorrect statement before the court stating that nothing could be established against the accused, and thus the competent authority had ordered to close the inquiry.
Meanwhile, an intervener joined the proceedings and revised FIA report was submitted to the court wherein it was identified that JS Investments Directors Ali Raza Siddiqui, Munawar Siddiqui and Najam Ali were involved in causing loss to the NICL. On October 19, 2016, the Sindh High Court ordered that NAB should conduct investigation against NICL for Rs 2 billion investment scam and the petitioner would render necessary cooperation by providing all information to the NAB as and when required.
In September 2017, NAB found substantial evidence of the involvement of JS Investments directors in the NCIL scam and referred the matter to the SHC seeking permission for investigation. NAB informed the court that the JS Investments had refused to provide information to it in violation of court order and that without its active participation a proper investigation could not be completed.
After hearing NAB, intervener, JS Investments and the additional attorney general, the SHC ordered NAB to conduct investigation against the company for defrauding NICL as per the direction of the Supreme Court.
Niazi was arrested earlier in March 2018 on the directives of the top court. The SC, in its 2013 verdict, had held that Niazi was appointed as the head of NICL in violation of rules and directed NAB investigations against several top bureaucrats and politicians of the country.

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