Massive Scandal Hit Bank Of Punjab

Contents
History Need of The Bank of Punjab Case Study Report of General Manager Audit Harris Steel Mill Scam Who Ate How Much in Bank of Punjab? Effect on Profitability Restructurings of BOD Questions Portion

History

Established in 1989

When Banazir Was the Prime Minister Nawaz shirf Was the Chief Minister of Punjab

Status of scheduled bank get in 1994 Branches (273) Head Office

10 B, Block E II, Main Boulevard Gulberg III Lahore

Need of The Bank of Punjab

Banazir Government When Nawaz Sharif Was the Minister of Punjab Govt was not realized funds to Punjab (province) Then Punjab Govt make its own Bank Criticized by

PPP Ch Shujaat Hussain (A member of Nawaz League)

Management

Case Study

Fraud of Billion rupees

Loan

issued to non existed companies Use fake identity cards Used over-evaluated properties were pledged as collateral

Report of General Manager Audit

A Report submitted to the President (Hamesh Khan) of Bank by Muhammad Hanif (GM Audit)
Instead

of listening earlier warning bank released more money Risk intensive irregularities pointed out
November

7, 2006 December 1, 2006 February 23, 2007

Report of General Manager Audit Cont

Irregularities of Rs. 6 - 9 Billion

Corporate

Branch Lahore Tufail Road Branch Lahore Main Branch Lahore

Irregularities in Harris Steel Mill and its Allied Accounts related to

Bills

Discounting Letter of Credit

Report of General Manager Audit Cont

Agriculture land offer as collateral security, but was mentioned as commercial land No confidential report from previous bankers of the parties were called GM audit observed that credit bulletin no 35 provided open permission to discount document under BOP L/C It was violation of SBPs regulation from offering credit facilities to certain limit Sheikh Afzal opened 16 companies accounts and was able to get credit worth billion of Rupees

Harris Steel Mill Scam

It was the Fake Company Get loan of 9 billion on Fake Identity Card From which 6.10 billion has been recovered Owned by Sheikh Afzal Name by his son Harris
130 luxury houses in the big cities of Punjab Houses worth in billion of rupees

Who Ate How Much in Bank of Punjab?

Hamesh Khan is back and has started singing in the jail On September 27, 2007

NAB

had filed a reference in an accountability court against 12 people

Including

six officials Six other accused of Rs 9 billion fraud

http://news.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/04hameshkhan-sc-qs-04

Who Ate How Much in Bank of Punjab? Cont

Mr. Wasi Zafar (Law Minister in 2007) Salman Siddique (Finance Secretary) State Minister Raees Muneer (With reference of Pervez Musharraf) borrowed Rs120 million from the BOP Irfan Qadir was given Rs.1 Million by Shiekh Afzal to get relief from Lahore high Court

http://news.dawn.com/wps/wcm/connect/dawn-contentlibrary/dawn/news/pakistan/04-hameshkhan-sc-qs-04

Who Ate How Much in Bank of Punjab? Cont

Sheikh Afzal disclosed that he paid

Waseem Sajjad (Rs. 2 Million) Sharifuddin Pirzada (Rs.10 Million)

When,

Dr Babar Awan (Rs. 50 Million) Mohsin Naqvi (Rs 3.5 Million) Malik Qayyum (Rs.10 Million)

NAB raided Sheikh Afzals office

http://news.dawn.com/wps/wcm/connect/dawn-contentlibrary/dawn/news/pakistan/04-hameshkhan-sc-qs-04

Effect on Profitability (In Billion)

4 3.5 3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 Profits Loss

Restructurings of BOD
Mr. A.Z.K. Sherdil Chairman Mr. Naeemuddin Khan President Mr. Abdul Ghafoor Mirza Director Mr. Farooq Ahmed Awan Director Mr. Junaid Ashraf Khawaja Director Mr. Rizwan Ullah Khan Director Mr. Shafqat Mahmood Director Mr. Tariq Bajwa Director Mr. Tariq Mahmood Pasha Director Mr. Viqar Ahmed Khan Director Mr. Raza Saeed Secretary to the Board

Question No 1
Who is the main culprit in the case of Bank of Punjab?
Answer: The main culprit of the case was the Mr. Hamesh Khan (President of the Bank of Punjab). He was accused of abuse of power, sanctioning Rs. 9 Billion in loans to Shiekh Muhammad Afzal (CEO of Harris Steel Mill) on fake ID card for personal financial game.

Question No 2
How did you evaluate the role of audit? Answer: Internal Auditor played there role very well, Mr. Muhammad Hanif (GM Audit) presented 3 consecutive audit report on

November 07, 2006 December 01, 2006 February 23, 2007

And pointed out risk intensive irregularities.

Question No 3
How did you evaluate the role of BOD?

Answer:

BOD of BOP appointed by the previous government of Punjab, headed by Mr. Pervaiz Elahi, embezzled billions from the Bank of Punjab, so its means that the BOD was also involved in this dirty game. Haris Steel Mill scandal in BOP was just the tip of the Ice Berg.

Question No 4
Give practical suggestion to avoid this sort of fraud in future? Answer: Approval should be on different authorities Proper Documentation Minimum influence of Politics There should not be conflict of interest Management Should be Independent

Thats All From Our Side

Thanks 4 Your Concenteration

Presented By
Mohammad Shehzad Tahir Umar Farooq Numan Khalid Muhammad Imran Shahid Hasan Ibrar Khan Humaira Naseem