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Pakistan's top defaulters

Three lists of loan defaulters, a comparison

Evidently none of the lists of loan defaulters published since August 1993 portrays a complete picture of the bad loans because the details of several well known defaulters were missing and while preparing the lists, commercial banks omitted the details of bank loans that they had agreed to reschedule or restructure. An article by Zohaib Marghoob in the magazine section of dalily Jang, Rawalpindi of December 14, 1997 gave details of political heavy weights belonging to the ruling party whose names were dropped from the defaulters list released by Benazir government.

The fact that the lists made available by the banks are released by the caretaker governments of Moeen Qureshi, Meraj Khalid and Benazir Bhutto were not complete is also evident from the following exemples:

    Abdul Hafeez Pirzada on November 10, 1997 moved before the Supreme Court a constitutional petition on behalf of one Amir-uddin Shah about a loan of Rs 672 million relating to Avari Hotels of Behram D Avari that was restructured by 11 banks and financial institutions in 1990. It was foreign currency loan that was converted into a rupee loan and the repayment was restructured in such a way that the creditors ended up holding non-voting shares in the indebted Avari Hotel. This loan of Rs 672 million in which 11 banks were involved does not appear in any of three lists of bad loans.

    The list of written-off and bad loans released by Moeen Qureshi included the name of Sadruddin Hashwani and Hashwani Hotels, as beneficiary of Rs 120 million loan written-off by ICP. However his name does not appear in any of the subsequent lists.

    The list of Benazir Bhutto does not carry the name of Fauzi Ali Kazim who was sanctioned a Rs one billion loan on a telephone call by Asif Zardari in 1988-90. A case was registered against Asif Zardari, in 1991 for using his influence on Habib Bank to sanction the loan. The list of loan defaulters published by Benazir Bhutto did not carry the name of Fauzi Ali Kazim but it cropped up in the list published by Meraj Khalid, a few months later. Ironically, the loan sanctioned to Fauzi Ali Kazim also appeared as a bad loan in the annual financial accounts of Habib Bank for 1996. Yet Fauzi Ali Kazim is in full ownership of duty free shops built with this loan and in November 1997 when he was arrested in Islamabad, allegedly for possession of alcohal, the lady accompanying him described him as one of the most large-hearted persons she had ever met.

Pakistan's top defaulters:

According to the Moeen Qureshi list of 1993, Fazalsons group was defaulting in the payment of 34 loans amounting to Rs 2,164 million, Hyesons was defaulting in Rs 1,174 million, Habib group in payment of 32 loans worth Rs 850 million, an obscure Naqvi group was in default of Rs 676 million, Tawakkal Rs 479 million, Adamjee Rs 198 million, Dadabhoy Rs 191 million, Hashwani Rs 48.7 million and Fancy Rs 40.6 million.

Major defaulters among the politicians were Chaudharies of Gujrat who were defaulting in payment of six loans worth Rs 109.66 million against Phalia Sugar, Punjab Sugar and Sapco Limited, Ittefaq group Rs 83 million against Ittefaq Foundry, Saifullah's Rs 37.3 million while Zardari group was in default of Rs 7 million.

List of top loan defaulters by Benazir 6.9.1996.

S.No Name Amount Borrowed Default (Rs in Millions)
1 Ittefaq 3,675 2,891
2 Fazalsons 3,475 3,475
3 Tawakkal 1,768 1,464
4 Bela Chemicals 1,259 1,217
5 Abdul Shakoor Kalodia 1,215 1,215
6 Naqvi 1,213 1,060
7 Zahur 1,035 905
8 Ghani 1,023 985
9 Arabian Sea Enterprise 950 913
10 Hyesons 750 725
11 Chaudri Cables 716 684
12 Farooq A Sheikh 632 632
13 Habib 615 615
14 Bawany-Alnoor 601 485
15 Chaudry Shujaat 544 381
16 Dawood 540 325
17 Adamjee 526 494
  Total 20,537 18,466

Top defaulters by Meraj Khalid in January 1997

S.No Name Amount in Default (Rs. in Million)
1 Ittefaq 3,013
2 Tawakkal 2,956
3 Fazalsons 2,800
4 Bela Chemicals 2,339
5 Chaudri Shujaat 1,557
6 Abdul Shakoor Koladia 1,254
7 Fauzi Ali Kazim 1,159
8 Saigol 1,086
9 Naqvi 1,056
10 Zahur 1,028
11 Abdullah Al-Rajaih 1,031
12 Ghani 903
13 Habib 845
14 Adamjee 832
15 Hashwani 640
16 Arabian Sea Enterprise 626
17 Sargodha 581
18 United 501
19 Chakwal 441
20 Dawood 376
21 Bawany-Alnoor 352
22 Fateh 213
23 Packages 166
24 Colony 81
  Total 25,389
Top four defaulters are common in lists published by Benazir and Meraj Khalid adn 24 individuals and families are defaulting in the payments of Rs 26.7 billion to the nationalized commercial banks and financial institutions. Mian Aftab Ahmad of Fazalsons and Habib Bank Gujranwala merit a special place in the history of banking frauds in Pakistan.

Mian Aftab Ahmad, A professional loan defaulter:

Mian Aftab Ahmad was the eldest son of Mian Fazal Ahmad, a Chinioti businessman who set up Central Cotton Mills which became the nucleus of Fazalsons group. By the time he died in mid-1970's his empire inherited by wife Sughra Begum and three sons, Aftab Ahmad, Muniar Ahmad and Gulzar Ahmad, comprised several mills.

Apparently, sometimes after his father's death, Aftab Ahmad found that cheating the banks was far more profitable than earning livelihood industriously. Very soon there was no bank from whom he had not borrowed, by pledging the same collaterals. He got 11 loans worth Rs 1,192 millions from Habib Bank Limited, circle A-1, Karachi only. After the publication of the defaulters list by Moeen Qureshi, Mian Aftab Ahmad managed to dispose off his assets and is living off comfortably in Europe, operating a hotel he has set up with money siphoned from Pakistani banks.

Habib Bank Gujranwala-The bank that gave non-rpayable loans:

Habib Bank Gujranwala was a cow that was milked by every big industrialist worth his name. The branch seems to have a banner sticking out of its window " Applications for non-repayable loans received here " and dished out bad loans amounting to Rs 2,793 millions. The beneficiaries included Karim Group (six loans) worth Rs 339 millions, Dost Mohammad Textile Mills ( Farooq A Sheikh) Rs 261 millions, Bela Chemicals (Basharat Elahi, brother-in-law of President Zia ul Haq) Rs 230 millions, Fazalsons Rs 274.69 millions, an individual Abdullah Rajai Rs 233 million, Valika Rs 103 millions, Habib group Rs 41.48 million, Arag Industries Rs 30.9 million, Hyesons Rs 26.56 millions, Fancy Rs 22 million, Dadabhoy Rs 16.54 millions and Bawany Rs 14.43 millions.

How industrialists living in Karachi had resorted to credit sanctioned by Habib Bank Gujranwala speaks about the professional integrity of the senior executive of Habib Bank. One of senior executive Yunus Habib was later arrested and is currently languishing in jail while another senior executive Safdar Abbas Zaidi was appointed minister by Benazir Bhutto, ostensibly, for not testifying against Asif Zardari, in the case about the loan sanctioned to Fauzi Ali Kazim.

The sick mill therapy

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Who gets the bank lons

Rober Barons of Pakistan