Now that all the reports against Shaukat Aziz are coming out in the open, i.e. steel mill fraud, aiding zardari’s money laundering, lavish farmhouses and all, lets also discuss his role in writing off the massive loans his maibaaps at that time, the chaudhries, had borrowed from the State Bank.
Rs15 bn loans written off by Shaukat Aziz govt in three years
Wednesday, April 30, 2008
By Rauf Klasra
ISLAMABAD: During the question hour in Senate on Tuesday, the Finance Ministry, in response to a question asked by Prof Khursheed Ahmed, revealed that the Shaukat Aziz government had written off a sum of Rs15 billion that included principal amount of Rs10 billion and Rs5 billion as mark up, outstanding against the top guns in the sectors of industry, trade and agriculture in the last three years (2005-07).
The influential borrowers exploited their links within the Aziz government to get their loans written off and industrial sector was the real beneficiary of this plunder of the taxpayer’s money.
According to details, a total of Rs12 billion outstanding against the industrial and trading sector was written off, while only Rs3 billion in the agriculture sector involving 70,000 farmers. In agriculture sector too, big landlords were the main beneficiaries of this write off.
A total of 70,000 small farmers who took loans under Rs500,000 could get only an amount of Rs 1.7 billion written off in these years.
The most scandalous part of this loan write off is that the principal amount of Rs10 billion was written off, something not permitted in the banking system as it is usually the mark up that is waived and not the actual loan against any defaulter.
The Supreme Court of Pakistan is already seized of a suo moto case when it was reported by The News that a sum of Rs54 billion as loans outstanding against politicians, businessmen, army men and others was written off during the last five years.
The fresh figures of the written off loans might give more reasons to Supreme Court to proceed against those who played ducks and drakes with the taxpayers money.
Former chief ministers of two provinces now both sitting in the National Assembly were among the top beneficiaries of the loan written off since the Musharraf government took over in 1999.
Meanwhile, according to Finance Ministry report tabled in the upper house, industrial and trade sectors were the beneficiaries of national loot.
As many as 628 industrial tycoons got a sum of Rs8.5 billion written off including the principal amount of Rs5.8 billion.
The big businessmen got Rs5.7 billion written off while small traders who had taken loans below Rs0.5 million could benefit to the tune of only Rs4.5 million.
Likewise, in the trading sector a sum of Rs3.3 billion was written off. A total of 12,404 small borrowers below Rs0.5 million got Rs1.1 billion principal amount written off in addition to waving of Rs26million on account of interest.
But, again the big borrowers who got loans of Rs0.5 million and above enjoyed the benefits. A total of 305 big borrowers got about Rs2 billion written off out of which Rs1.8 billion was principal amount.
However, a depressed agriculture sector facing produce crisis, could get very little benefit out of this policy to write off loans and principal amounts. As many as 70,000 farmers could get only Rs1.4 billion written off on account of principal and Rs780 million as mark up.
But, again the big farmers were the main beneficiaries of the write off. The loans of 503 farmers who had got loans of above Rs0.5 million were given the facility to get their Rs800 million loans written off including Rs304 million as principal amount.
Source- The News
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SC takes up Rs 54 billion loan write-off case
Friday, April 04, 2008
ISLAMABAD: A huge financial scam against the Shaukat Aziz-led government reported by The News in October last, about the top guns of Pakistan quietly getting loans of Rs 54 billion written off using their political clout, has now brought officials of the State Bank of Pakistan and the Finance Ministry in the trial box of the Supreme Court of Pakistan.
The SC has started proceeding on a suo moto action and a copy of the suo moto notice has also been sent by the Registrar of the Supreme Court to The News to make its correspondent party to the proceedings to verify the facts before the court.
The date for the hearing of this scandalous case has been fixed for April 10 before the bench being headed by Chief Justice Abdul Hameed Dogar.The News had reported last year that influential people had got Rs 54 billion bank loans written off on the basis of a decision taken by the financial team of Gen Pervez Musharraf in October 2002.
This shocking disclosure was made in a secret report submitted before the Public Accounts Committee (PAC) of the National Assembly by the Auditor General of Pakistan.While the Shaukat Aziz government claims to be the first in the history of Pakistan that completed five years in office, few people have suspected that it would also be ‘credited’ with writing off such an unprecedented amount of loans within its five years in office to facilitate the top guns of the regime.
The AGP report had shown that a total of 50,000 persons, including politicians, civil and military business concerns and business tycoons of Karachi, Lahore and other areas, were the direct beneficiaries of this massive favour.
Two chief ministers of the provinces and their families having big business concerns and stakes are also the beneficiaries of these written off loans.The ex-chief minister of a province, whose family owns sugar mills, also got his loans written off under this scheme. The chief minister of another province got loans written off outstanding against his Ghee mills. Even some foreign firms and multinational companies and a private bus service operating from Lahore to different cities of the Punjab were also extended this facility. Earlier, soon after elections in October 2002, the then finance minister Shaukat Aziz and his financial team at the State Bank approved a ‘written off loan scheme’ in the same month (October 2002) after certain top politicians of the government put them under pressure to ease the financial burden of loans from their business concerns.
Former minister of state for finance Omar Ayub had then strongly defended the policy of the government to introduce a scheme to help the borrowers settle their non-performing loans (NPLs) with the banks, including the National Bank.
He had stated that these NPLs were settled in the light of Circular No 29 issued by the State Bank. Omar said a total of 50,414 borrowers availed of the facility by settling their loans under this scheme, which he confirmed was introduced in October 2002 after the general elections.
Omar said these decisions were taken by the boards of these banks that were quite independent and were not under the influence of the government. He said actually these non-performing loans were becoming a burden on the banks itself, so the decision was taken to rather settle them after offering them a package.