House Building Finance Company - Fraud By Md

 

This MD has only spent the amounts on his own and own consultants

Corporate Governance is about those who govern corporate entities. In our country even MD of government owned companies acquire position fraudulently and there is no one to take action. Stae Bank of Pakistan, SECP are party to fraud and just see the wastage of money of citizens of Pakistan in the hands of fraudulent foreign national MD.

Turnover is the parameter to judge the progress of institution. HBFCL has lost its business as its disbursement/ turnover/ lending has suffered extreme downfall during the current MD tenure. As reported by Ummat on 20.04.2012, before this MD , disbursements were Rs.3.85 billion rupees while when he was made MD in 2009 lending falls to 715 million and then 679 million in 2010.
http://ummat.com.pk/2012/04/20/news.php?p=news-11.gif
http://ummat.com.pk/2012/04/20/page-1.php
The only earnings and recoveries are from the interest arising out of advances made by the company before appointment of this MD. This MD has only spent the amounts on his own and own consultants , advisors appointed in violation of procurement rules of Pakistan.

How House Building Finance Company Limited can perform for the betterment of the country when its Managing Director is fraudulently appointed. MD, Mr. Azhar Abbas Jaffery, was appointed under section 11 of the Banks Nationalization Act, 1974. According to section 11(12)(c) A person who is not citizen of Pakistan shall not be appointed under this section. According to section 11(3)(c) , a person who is disqualified under section 12 after appointment shall, Stand Removed.

You may send NIC of Mr. Azhar Abbas Jaffery, 42301-6474193-1 by sms to “8300” i.e. Election Commission of Pakistanand to Nadra at "7000". You will get that the said persons has surrendered his nationality. If you put the same NIC at NTN verification, at FBR website address
http://regsys.fbr.gov.pk/Registration/onlinesearchTaxpayer.aspx
you will confirm that this NIC belongs to Mr. Jaffri. However, Finance ministry has not declared him as stand removed up till now. Estalsihment Division has not issued such notification. Even State Bank of Pakistan, who granted him, fit and proper certificate has not withdrawn it yet.

So negligent is our State Bank of Pakistan that it gives fit and proper certificate to a foreign national without bothering to even verify its identity card or seeing the original at least, which he had already surrendered before appointment. All the funds of HBFC belongs to the people of Pakistan and MD is just using it to hire consultants.

Lawyer of HBFC from Islamabad to Karachi to represent HBFC in Court. Why HBFC could not find lawyer in Karachi. The answer is that present legal head Ms. Atiqa, remained associate lawyer at Islamabad lawyer's firm at Islamabad. So she hired that lawyer who every time comes from Islamabad gets air ticket and huge travelling allowance, part of which might be shared with those who got him hired. Mr. Jaffri has hired many consultants for salary of millions of rupees. According to news of Ummat, in which cheque numbers are also given, MD has granted bonus to himself.

In hiring the lawyer and other consultants, the public procurement rules have been violated. Mr. Jaffri is wasting the public money for his own purposes. But surprisingly, Public Procurement Authority is silent.

HBFC has been ruined by MD. Business of financial institution like HBFC solely depends on how much it lends. Its lending/ disbursement is quite low as all the money is being spent on paying official and consultants from whom commission is received under the table.
http://www.weeklypulse.org/details.aspx?contentID=2131&storylist=2
The government & court should enter the name of such person in Exit Control List immediately so that it may not run away with the wealth of the people of this country. Further, he should be made to return salary earned by him as he got appointment by fraud that he is citizen of Pakistan, though he had surrendered nationality to get Nationality of Singapore. Business Recorder on 17.04.2012, narrated this news.
http://www.brecorder.com/money-a-banking/198/1177900/
It is strange that government has only restrained from calling meetings. Have not removed MD though he stands removed by law. Further, criminal proceedings and arrest should also be initiated for fraud. But government is just giving him time to embezzle public money more along with his colleagues. If government is serious he should be straightaway removed and arrested. State Bank of Pakistan, Securities & Exchange Commission of Pakistan , Government of Pakistan all are silent. No inquiry is needed. Banks Nationalization Act clearly says that non-Pakistani is not entitled to be appointed. It seems that officers of SBP, SECP, Ministry of Finance & Ministry of Establishment are party to this fraud. It is clear that how much the head of financial institution could pay to officers of State Bank, SECP and Ministers and secretaries to keep silent.

Further FIA should investigate his frauds.

It is criminal act to make a foreign national and keep him head of institution who is spending millions of rupees of public money for his friends and ruining the business of HBFC by decreasing disbursements.

Not only Jaffri should be made to return salary and suffer imprisonment, but also Governor SBP, Chairman SECP and Finance Secretary, Secretary Establishment, Director FIA, should be punished for being party to the fraud or at least for gross negligence and not taking action.All the parties to fraud and involved in embezzlement of the public fund should be penalized. We pay the taxes and these corrupt foreign nationals enjoy the public money and ruin our institutions and no one is taking action against them. my_wordsNew Member
RESPONSE OF HBFC
HBFC has submitted its reply in Business Recorder on 25.04.2012, which is quite absurd.
HBFC Response
It[HBFC] wishes to set the record straight for the information of the public…...
"Regarding the appointment of the Managing Director, HBFCL has clarified that the appointment of the MD/CEO of HBFCL is governed by Article 72 of Association of HBFCL which states that 'There shall be a Chief Executive of the Company who shall be appointed by the Board with the prior approval of the Federal Government.

The Chief Executive shall be appointed from amongst persons having knowledge and experience in banking, preferably in the field of finance and economics in accordance with the Fit and Proper criteria as laid down by the State Bank of Pakistan from time to time.'
"From the above it can be seen that the requirements spelt out in the relevant Article of Association do not list Pakistani citizenship as an eligibility criterion.
Our Comment

And what about Banks Nationalisation Act, 1974. Why HBFC has observed silence about Banks Nationalisation Act which in sections 11(12)(c) & 11(3)(c) clearly says that MD shall only be citizen of Pakistan while Non-citizen shall stand removed. Whether the Act of Parliament is superior or the Articles of Association? According to Section 11A, which says “Notwithstanding anything contained in any other law for the time being in force, section 11 of Banks (nationalisation) Act shall apply to (i) NDFC (ii) ICP (iii) National Investment Unit Trust (iv) HBFC (v) SMFC (vi) RDFC (vii) First Women Bank Limited.” Hence Section 11A not only overrides Articles of Association but also the Companies Ordinance, 1984, as it starts with “Notwithstanding anything contained in any other law”
Whether HBFC, as well as its legal heads and legal advisor drawing millions of rupees, is ignorant about this law or they have maliciously concealed it. I have learnt that HBFC has said before Sindh High Court, that Managing director has been appointed under Banks (Nationalisation) Act, 1974, which supersede Articles of Association. They are making contradictory statement here. Further, its Articles of Association also says that Company shall be governed in accordance with concerned provisions of Banks Nationalisation Act. Whether MD and its team is also ignorant of Articles of its company. What a Performance? This is how corrupt people are expected to work.

HBFC threatened Transparency International that it reserves right of legal proceedings. Now should Transparency International file legal action against MD HBFC for its malicious statements against TI and for giving misleading statements contradictory to its statements before the Honourable Sindh High Court.

HBFC Response
Further, the 'Fit and Proper' criteria mentioned in the said Article and as laid down by the State Bank of Pakistan, requires that fitness & propriety of a candidate for the office of the Chief Executive Officer of a Bank or a Development Financial Institution, be assessed on the following broad elements: a) Integrity, Honesty & Reputation; b) Track Record; c) Solvency & Integrity; d) Qualification & Experience; e) Conflict of Interest.
Our Comment

While obtaining fit and proper certificate , fact of surrendering nationality was concealed. Fraudulently & by cheating, pretended to be Pakistani National to bypass the obstruction of section 11(12) of the Banks (Nationlisation) Act, 1974, MD extracted this position. This is the Honesty & Integrity of Mr. Azhar Jaffri. But as Civil Aviation is responsible for fall of plains which are not air worthy similarly State Bank of Pakistan is responsible for giving fit and proper certificate in violation of law and then not withdrawing it not taking action after knowing that such certificate was taken illegally and by fraud. Similarly, SECP was deceived by giving NIC numbers of surrender /invalid NIC but SECP is also not taking action. Nevertheless, responsibility of Secretary & Minster Finance Division does not reduce.
HBFC RESPONSE
"Thus neither the Incorporation Documents of HBFCL nor the governing law and regulations impose any condition to the effect that the Chief Executive Officer of the Company must be a Pakistani national.

OUR COMMENTS
After all MD has admitted that he is foreign national not citizen of Pakistan. Apart from Banks (Nationalisation) Act, which does not allow non-citizen to be MD, one thing more is to be considered. One who is foreign national by origin and one who is foreign national because he surrendered the nationality of Pakistan to get nationality of another country, are not equal. Mr. Azhar Jaffri is one who entered into agreement of loyalty with another country AFTER ENDING such AGREEMENT with state of Pakistan and how he can be made of head of institution of Pakistan which is made to provide shelter to middle class of Pakistan. How billions of rupees can be put to his disposal who is utilising this for its own benefit.
Then he deceived the government , State Bank of Pakistan SECP, this nation and violated Banks Nationalisation Act, 1974.


my_words, Apr 25, 2012#2my_wordsNew Member
HBFC Response
"Regarding the continuance of the MD in office after the expiration of his contract in January 2012, HBFCL has referred to Section 199 (3) of the Companies Ordinance which clearly states that 'The chief executive retiring under section 198 or this section shall continue to perform his functions until his successor is appointed unless non-appointment of his successor is due to any fault on his part or his office is expressly terminated.'
"HBFCL has further clarified that since January 2012 letters have been written to the Ministry of Finance seeking its direction on the extension of the MD's tenure or the appointment of a new MD and till date the decision of the Ministry is awaited.
Comment
Government has already issued circular that those whose contract has been expired and are waiting for renewal of tenure should leave the position immediately and go home. What MD Is waiting for?

HBFC Response
"HBFCL also condemns the allegation by Transparency International that the appointment of HBFCL Group Head, Legal, Strategy & Marketing and of legal advisor Awan Raza were not proper.

"It has clarified that in the case of the Group Head, the position was not only advertised but PPRA was strictly followed.

Further the Group Head recruited was previously serving in the Competition Commission of Pakistan and was not a partner in M/S Awan & Raza as Transparency International Pakistan has wrongly stated.Comment
Really, but HBFCL website introduces her as “
Aatiqa Lateef
Aatiqa Lateef joined House Building Finance Company Limited in 2010 and is Group Head, Legal, Strategy & Marketing. Aatiqa Lateef….. Her experience in Pakistan includes the Competition Commission of Pakistan and Partnership at the law firm of Awan Raza.
http://www.hbfcl.com/aatiqa_lateef.html

What a fraud and liar is HBFC. Readers rush and see it unless HBFC may change its website.
HBFC Response
In the case of Awan Raza, it is to be noted that they are just one of several law firms which are on the legal advisors panel of HBFCL, which includes amongst others, Hafiz Rehman, Mohsin Tayebaly, Haidermota, Faisal Ghani, Nafis Siddiqui and other relevant legal specialists and firms as needed.

Our Comments
Good attempt to fraud with law and throw away the provisions of law. So now onwards every concerned institution shall keep most of the lawyers, consultants, suppliers, service providers, contractors on its panel. Then they may award contract to whomever they like without fulfilling provisions of Public Procurement Laws. A simple way to deceive the nation and its law, what else can be expected from one who has surrendered nationality of Pakistan. But what to say of Governor State Bank of Pakistan, Chairman SECP, Ministry of Finance, Director FIA, PPRA, why they are keeping this fraudulent mentality in chair. What are they getting in return?

HBFC Response
"Regarding Transparency International Pakistan's false allegations that the HBFCL MD granted himself millions of rupees as bonus (a grossly exaggerated amount), HBFCL has stated that Transparency International Pakistan has not only stated something that is factually incorrect but has also demonstrated its non-transparency and lack of knowledge about the rules governing such matters.

The HBFCL MD is not authorised to grant himself bonuses and all bonuses have to be approved by the board of directors, which includes a nominee director of the Ministry of Finance. The bonus given is thus based on performance and duly approved by concerned authorities.
Our Comment
Yes, this is what everyone is seeing, that Board, MD and Ministry of Finance, probably State Bank of Pakistan also, all are acting in concert to keep fraudulent MD in position, to give him bonuses, a legitimate way to take out the money of the people of Pakistan and share it afterwards.
HBFC Response"The malicious statements issued to the media by unscrupulous vested interests, have also tried to paint a wrong picture of HBFCL's efficiency by stating that loan disbursements have greatly reduced during the tenure of the present managing director.
Our Comment
The news Articles gives comparative figures for last three years to establish that disbursements have fallen down.
It says, “It was further alleged that before the appointment of Mr. Jaffery in the HBFC, the disbursements were Rs.3.85 billion rupees while when he was made MD in 2009, the lending fell to 715 million and then 679 million in 2010.” If HBFC says it is incorrect it should give its own figures matching its annual report. Why HBFC has not given any figures? Because the figures given are true.
HBFC Response
……..
"Further, the success of the management in turning around the organisation is clearly evident from the fact that in financial year 2007 and 2008 HBFCL reported a loss of Rs 959 million and Rs 414 million respectively, whereas in 2009 and under the new management, the loss was reduced to Rs 109 million, followed by a profit of Rs 113 million in financial year 2010 for the first time in several years.

Now for financial year 2011 a profit of over Rs 100 million is expected to be declared," the clarification concludes.-PR
Comment
A layman also knows that financial institution earns profit from lending and only from lending. So all this profit relates to lending which was made prior to current MD and is for 10/20 years. Performance of current MD relates to turnover of the Company which has declined without dispute. HBFC also failed to give any figures for disbursement.

In the presence of above what is being awaited by SBP, SECP, Ministry, FIA? Whether we want everything to be done by Supreme Court of Pakistan only?