FINANCIAL MANAGEMENT

IIUI

Case Study Report

Employee Old Age Benefit Institution

SUBMITTED TO

Ms Shumaila Bibi

SUBMITTED BY

Hafsa Shahbaz

Sehrish Afzal

Date: 15/1/2015

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Contents ACKNOWLEDGMENT...........................................................................................................................3

DISCLAIMER .......................................................................................................................................3

History ...............................................................................................................................................4

Introduction .......................................................................................................................................4

Benefits by Employees’ Old-Age Benefits Institution .............................................................................4

Employer Responsibility ......................................................................................................................5

Employee Responsibility .....................................................................................................................5

Mission ..............................................................................................................................................5

Objectives ..........................................................................................................................................5

Hierarchy ...........................................................................................................................................6

Introduction of Case Study ..................................................................................................................7

Illegal/unauthorized purchase of vehicles and sanction of car loans.......................................................7

Illegal appointments and award of training program to the highest bidder.............................................8

Illegal investment in Silk Bank and Tameer Micro Finance Bank .............................................................8

Illegal investment in the purchase of shares of M/s Textile....................................................................8

Illegal investment in real estate and many other allegations and issues .................................................9

Illegal collection of flood relief fund namely “KASHKOL” .......................................................................9

Transfer honest officers and staff to hard areas....................................................................................9

Ignorance of NAB about EOBI Complains..............................................................................................9

Actions taken by The Supreme Court ................................................................................................. 10

Conclusion ....................................................................................................................................... 10

Recommendations............................................................................................................................ 10

Rules and Regulations of EOBI ........................................................................................................... 11

Permissible INVESTMENTS:............................................................................................................ 11

Limits of INVESTMENTS: ................................................................................................................ 11

Disbursement not to be made where limits exceed:........................................................................ 12

Power to invest in excess of prescribed limits: ................................................................................ 13

Loans to officers and staff: ............................................................................................................ 13

Realization and reinvestment: ....................................................................................................... 13

Safe custody: ................................................................................................................................ 13

Reference ........................................................................................................................................ 13

ANNEXURE ....................................................................................................................................... 14

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ACKNOWLEDGMENT

This report is joint effort of our Group, MBA-27(A). It was impossible to prepare this report without the collective effort of all group members. It is our duty to record our thankfulness to Ms Shumaila for her kind support and assistant throughout the preparation procedure. All the information is taken by self observation and research with the help of internet.

DISCLAIMER

We confirm that this report is our own work and that all resources used for collecting information which is used in this report have been fully acknowledged.

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History Prior to EOBI Act, in Pakistan, there were so many labor laws. In many labor laws remedial, beneficial and welfare clauses and sections were provided but none from these laws or others provide such coverage of the old-age risk thus it was necessary to make a law that can provide security in the eve of old age when a man becomes handicap to work hard, condition of invalidity and in the case of death of a worker / employee the pension to the widows and orphans. In the European countries such laws were in operation. In view of this need, first time in Pakistan, in 1972, an Ordinance with the title of the Employees' Old-Age Pension Ordinance (Ordinance X of 1972) was promulgated. Under this legislation first time , in Pakistan, the Government indicates its desire to introduce such a social security scheme for the betterment of the employees of private sectors.

Introduction This scheme is operated under the Employees’ Old-Age Benefits Act, 1976 and covers employees

working in industrial, commercial and other organizations. The Employees Old-Age benefits institution (EOBI) facilitates the provision of this benefit by performing the following functions:-

• Identification & Registration of Establishments and Industries.

• Identification & Registration of Insured persons

• Collection of Contributions

• EOB Fund Management

• Provision of Benefits as per Laws

Benefits by Employees’ Old-Age Benefits Institution a) Old Age Pension: It is monthly pension from EOBI calculated through standard formula defined

by Law, subject to minimum monthly limit of Rs. 3600/- (The limit is revised by Government

from time to time). An employee becomes eligible on retirement, subject to other conditions. The following formula is used to calculate pension:-

Average monthly wages x No. of years of Insurable Employment

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b) Invalidity Pension: If an employee sustains invalidity/ disability, he can claim this pension

subject to other conditions.

c) Survivor’s Pension: In case of death of an employee his spouse, children (or parents under

specified circumstances) can claim survivor’s pension subject to specified condition.

d) Old Age Grant: If an employee registered with EOBI is not eligible for “Old Age pension” he can

claim Old Age Grant, subject to fulfillment of certain conditions.

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Employer Responsibility 1. Employer is bound to pay 5% of minimum time scale salary declared by government for each employee either permanent or contractual.

2. Responsible to deduct 1% contribution of minimum time scale salary from employees’ salaries and deposit in timely manner.

3. To facilitate EOBI and employees for issuance of EOBI Card.

4. Maintain the contribution statements, monthly and annually and provide the detail to EOBI

department.

5. Responsible to maintain the record and show to EOBI Official on demand.

Employee Responsibility 1. Employee is bound to pay 1% of minimum time scale salary to EOBI as his own share of contribution.

2. To retain the EOBI Card in safe custody.

3. File the EOBI Claim when applicable.

Mission

To transform EOBI into a viable, progressive and self-sustained organization, capable of providing retirement benefits to all citizens in service of Pakistan with active support of employers and employees to promote economic prosperity of all stakeholders.

Vision To be a viable, credible, progressive Institution devoted to provision of Social Security to all persons in service of Pakistan.

Values Transparency Trust Team Work Integrity Professionalism Meritocracy Courtesy Fairness

Objectives

Extend Coverage of “State Pension Scheme” to all persons employed in Pakistan over a reasonable period. Transform the EOB Scheme into a viable and popular “State Pension Scheme” (SPS) for providing

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security of subsistence pension to all employees at most economical cost. Transform EOBI management into most efficient, economical and effective machinery for operating Public Pension Scheme. Promote voluntary registration by employers & employees and payment of contributions by making the Scheme more attractive and least cumbersome. Ensure generation of maximum income from the investment through honest, transparent and professional management. Ensure disbursement of due benefits promptly & gracefully.

Hierarchy

Mr. Muhammed Sualeh Faruqui

Chairman

Mr. Ghulam Muhammed Memon FA/DG (F&A) Additional Charges of HR&GA and Law

Mr. Muhammed Ayub Khan Director General (Audit)

Mr. Shakeel Ahmed Mangnejo Investment Advisor /Director General (Operations South)

Syed Iqbal Haider Zaidi Director General (Operations North)

Syed Akbar Adil Shah Dy. Director General (B&C-I)

Mr. Kaleem Pervez Bhutta Dy. Director General B&C-II

Mr. Muhammed Saleem Dy. Director General (B&C-III)

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Dr. Rehmat Ibad Dy. Director General (Adjud-Authority-I & Secretary BOT)

Mr. Muhammed Sadiq Dy. Director General (IT)

Ms. Asma Amir Dy. Director General (Reconciliation)

Ch. Abdul Latif Director Adjud-Authority-II

Mr. Muammed Ayub Director Adjud-Authority-III

Mr. Meraj Nizamuddin Dy. Director General (Law)

Mr. Nayyar Mehmood Dy. Director General (HR&GA)

Introduction of Case Study

Ex Chairman of EOBI Zafar Gondal is brother of ex Federal Minister of food and agriculture. The

employees of EOBI, throughout the country, are on pen-down strike from 3rd November 2010 against

mass corruption for DEMAND TO REMOVE the chairman GONDAL & CO. AND SAVE EOBI as the

Management is ignoring this critical human problems of old-age pensioners. The main issues for investigation are:

Illegal/unauthorized purchase of vehicles and sanction of car loans

Illegal appointments and award of training program to the highest bidder.

Illegal investment in Silk Bank and Tameer Micro Finance Bank

Illegal investment in the purchase of shares of M/s Textile

Illegal investment in real estate and many other allegations and issues.

Illegal collection of flood relief fund namely "KASHKOL

Transfer honest officers and staff to hard areas.

I llegal/unauthorized purchase of vehicles and sanction of car loans

Unauthorized purchase of 93 vehicles and cars by the EOBI Chairman Zafar Iqbal Gondal among

which five were 1800cc cars for his lavish spending from employees’ pension funds. According to rules

of EOBI sanction of car loans to the fresh employees was Illegal still he sanction loans to fresh

employees for purchase of cars.

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I llegal appointments and award of training program to the highest bidder

Recruitment and selection is one of the key processes of any organization.

It refers to the process of attracting and choosing candidates for employment.

Step 1: Identify Vacancy and Evaluate Need

Step 2: Develop Position Description

Step 3: Develop Recruitment Plan

Step 4: Select Search Committee

Step 5: Post Position and Implement Recruitment Plan

Step 6: Review Applicants and Develop Short List

Step 7: Conduct Interview

Step 8: Select And Hire

Although EOBI has followed all steps for recruitment and selection to hire an employee still in 2011-2012, illegal appointments of 238 employees are made by the EOBI Chairman Zafar Iqbal Gondal.

EOBI hire other institutions through biding for their training programs. In the period Zafar Gondal, the

training program was awarded to the highest bidder

Due to non transparency and worst nepotism institution faced irreparable loss .From now onwards the recruitment and selection procedure is performed by NTS.

I llegal investment in Silk Bank and Tameer Micro Finance Bank According to EOBI’s rules, the institution can only invest in a bank which fulfills the following criteria:

Bank must be a commercial bank

Bank should be graded as A+ by State Bank of Pakistan

Gondal did not follow the rules and invested in Tameer Bank for three months which is not a commercial

bank and was graded as negative by State Bank of Pakistan at that time. EOBI did not get any profit from investment and also the amount was not returned to institution after three months.

He also invested in Silk Bank which was a commercial bank but graded as negative by State Bank of

Pakistan.

I llegal investment in the purchase of shares of M/s Textile

After heavy losses in 2007/08 because of investment in stock exchange, government of Pakistan banned

EOBI to invest in shares. But Gondal purchased shares of M/s Textile for Rs20 per share and after few days the share price were Rs 3 to Rs 4 per share and EOBI face heavy losses.

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I llegal investment in real estate and many other allegations and issues

According to rules, limits are given for investment in property. Rule (v) states that institution can invest

10% of the portfolio in one property and 30% in all properties together. But EOBI Chairman Zafar Iqbal

Gondal invested far more than limits provided in rules. He purchased the Crown Plaza, located in F-7

Markaz, Islamabad, on exuberant price measuring 600sq yards, and paid Rs1 billion, almost 100 percent

higher than the market value of the property. The deal was finalized without the approval of EOBI’s

Board of Trustees. According to the FIA investigation team, Qayyum sold Crown Plaza (located in F-7

Islamabad) to EOBI management for Rs1.02 billion, whereas the property was valued at Rs626 million

Payment of Rs16 billion made by the EOBI Chairman Zafar Iqbal Gondal to DHA officials for purchase of

DHA commercial properties along DHA Expressway which included 221 Kanal of land at an unbelievably

exorbitant price.

I llegal collection of flood relief fund namely “KASHKOL”

The EOBI Chairman Zafar Iqbal Gondal generously announced to donate Rs.1 billion to Prime Minister's

Flood Relief Fund from EOBI's poorest Pensioners' Fund. Despite of this fact that EOBI and its Fund is a

Trust Money, which cannot be donated for any purpose. He also established his own Flood Relief Fund

namely "KASHKOL" on parallel to Prime Minister's Flood Relief Fund and collected huge donations from Employees and general public and deposited this huge amount to his private bank account

Transfer honest officers and staff to hard areas Vigilant officers and honest employees who take step and raise their voice against illegal operations of

Chairman Zafar Iqbal Gondal as punishment he either suspend them or transfer them to remote areas without any reason

Ignorance of NAB about EOBI Complains NAB was informed about the massive corruption in EOBI but they did not bother to conduct any inquiry

because powerful groups were involved. First detailed complaint about EOBI corruption was received in

July 2012. Complain revealed deal with DHA, purchase of crown plaza and use of five 1800cc cars by the

EOBI Chairman Zafar Iqbal Gondal and his lavish spending from employees’ pension funds . Upon

receiving the complaint, top officials of NAB assigned a junior officer to investigate but no senior official

follow the complaint and even after nine months, no action was taken which is against the rules of NAB.

Under NAB’s standard operating procedure (SOP) a complaint has to be e ither disposed of within two

months or upgraded into an inquiry within the same time frame. The bureau could have prevented

corruption of at least Rs 11.334 billion (used by Zafar Gondal to purchase property in beginning of 2013). Second complaint was received in March 2013 but again it could not be upgraded into an inquiry.

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Chairman NAB Qamar Zaman Chaudhry also said we are in state of war. Everyone thinks there is only

one ongoing war that is against terrorism. That is the more visible one; but there is also another ongoing

one, a far more insidious war; the one against corruption.

Actions taken by The Supreme Court

The Supreme Court has took suo moto notice of the EOBI corruption scandal and direct FIA to

investigates. SC ordered the Defense Housing Authority (DHA), Islamabad, to deposit Rs22 billion and

directed six individuals to deposit Rs7,087 million they received from the EOBI for the purchase of

property.

The federal agency has also sought the details of assets and bank accounts of the accused persons as

well as suspected front-men.

The Federal Investigation Agency (FIA) has arrested the former chairman Zafar Iqbal Gondal and director

general finance of the Employees’ Old-Age Benefits Institution (EOBI) in connection with a suspicious

multi-billion-rupee real estate deal.

Conclusion During the tenure of the former chairman of the state-owned EOBI Zafar Iqbal Gondal, accused persons

at high positions purchased 18 properties amounting to Rs34 billion through dubious agreements after obtaining their phone data.

According to documents, Gondal “INVESTED” Rs34, 387,184,400 EOBI funds in real estate in less than

three years of his stay in this position. The institution purchased commercial, residential, industrial,

agricultural and amenity lands for Rs9, 490,265,619 since its inception in 1982 till 2009.

The real estate bought by Gondal from 2010 to April 2013 from the EOBI funds was shown to have the

market value of Rs35, 520,710,009 while the worth of similar properties bought from 1982 to 2009 was

stated to be Rs14, 278,615,889. In just four months, from January to April this year, Zafar Iqbal spent

Rs11.334 billion from the EOBI funds to purchase properties.

Recommendations

Extend coverage of pension scheme to all persons employed in Pakistan over a reasonable period.

The investment should be thoroughly planned and phased over a reasonable period of time.

The computerized systems for maintenance and updating of records should be developed.

EOBI should hire an external auditor to check over the assets and employees bank accounts.

Training program should be conducted by EOBI itself.

Chairman should be hired with transparency and without nepotism.

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Rules and Regulations of EOBI

Permissible INVESTMENTS: The Institution may INVEST any moneys which are not immediately required for expenses under the Act:-

(a) In Government securities;

(b) In Government-guaranteed securities;

(c) In loans to bodies or persons holding Government securities or Government guaranteed securities,

the realizable value of which exceeds the amount of the loan and the accrued interest and other charges

thereon, by not less than twenty per cent and such securities are pledged, hypothecated or assigned to the Institution;

(d) In interest-bearing deposits in guaranteed banks;

(e) In debentures or loan stocks of, or other securities for money issued by, of loans to, any such

authority, corporation or company, or interest-bearing deposits in such non-guaranteed bank as have

paid dividends of not less than ten per cent per annum on their respective ordinary share capital for the

two accounting years, or have paid interest in full on debentures issued or other money obligations

incurred by them and have not defaulted in the repayment or the principal thereof during thirty -six

months immediately preceding the day on which INVESTMENT is made;

(f) In ordinary or preference shares of any such authority or corporation or of such a company listed

with any stock Exchange in Pakistan, as has paid dividends of not less than ten per cent per annum on its

ordinary share capital for three accounting years immediately preceding the year in which

INVESTMENTS is made;

(g) In ordinary or preference shares or debentures or loan stock of, or other securities for money issued by, or loans to, a controlled company;

(h) In immovable property, whether freehold or leasehold; or

(i) With the previous approval of the Federal Government, in such other INVESTMENTS as the Institution may think it fit.

Limits of INVESTMENTS:

(1) Subject to these rules, the following shall be the limits up to which investments may be made under rule 3, namely:-

(i) For INVESTMENT clauses (a) to (d), no limit.

(ii) For INVESTMENT under clause (e), fifty per cent. of the portfolio.

(iii) For investment under clause (f), fifty per cent. of the portfolio.

(iv) For investment under clause (g),-

(a) In respect of any controlled company, ten percent, of the portfolio; and (b) In respect of all such controlled companies together, thirty percent of the portfolio.

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(v) For investment under clause (h),-

a) In respect of any one property, ten percent of the portfolio; and b) In respect of all properties together thirty per cent of the portfolio.

(vi) For investment under clause (i), two and-a-half percent of the portfolio.

(2) No investment made in any one authority, corporation, company or non-guaranteed bank under

clause (e) and (f) Of rule 3 shall exceed twenty-five percent of its paid-up capital, or twenty-five per cent of its net worth in Pakistan or two and-a-half per cent of the portfolio, whichever is less:

Provided that if there be any investment in partly paid-up shares of an authority, corporation, company or non-guaranteed bank, the limit shall be reduced by the uncalled for liability in respect of such shares.

(3) The aggregate of all investments made under clauses (f), (g) and (h) shall not exceed fifty percent of

the portfolio.

(4) The aggregate of all investments made under clauses (e), (f), (g) and (h) shall not exceed eighty

percent of the portfolio.

Rule 3 of the Investment Rules prescribes the permissible investments that EOBI is authorized to make,

and sub-rule (h) of Rule 3 authorizes EOBI to invest any moneys which are not immediately required for

expenses under the EOB Act in immovable property, whether freehold or leasehold. Further, sub -rule

4(1)(v) of the Investment Rules, which prescribes the threshold to invest in immovable property, states

that EOBI can invest up to (i) ten percent of its portfolio, in respect of any one immovable property, and (ii) thirty percent of its portfolio, in respect of all immovable properties collectively.

Disbursement not to be made where limits exceed:

(1) If at any time the existing investments in any class or aggregate of classes or in any one authority,

corporation, company, non-guaranteed bank on immovable property exceed the limits prescribed by

rule 4, then, except as provided in rule 6, no additional investment by way of actual disbursement of

money or money’s worth shall be made by the Institution at that time in such class or classes, or authority, corporation, company, non-guaranteed bank or immovable property.

(2) In respect of any class or aggregate of classes, or any one authority, corporation, company, non-

guaranteed bank or immovable property, no additional investment shall be made at any time by way of

actual disbursement of money or money’s worth if such additional investment will cause the limits prescribed by rule 4 to be exceeded, except as provided in rule 6.

(3) For the purposes of this rule and rules 3,4 and 6 all existing investments shall be taken at current book value.

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Power to invest in excess of prescribed limits:

The Institution may, with the previous approval of the Federal Government, invest its money, in excess of the limits prescribed by rule 4:

Provided that the aggregate of all investments made under this rule, together with investments made under clause (i) of rule 3, shall not exceed two and a half percent of the portfolio.

Loans to officers and staff:

The Institution may make loans to its officers and members of staff in accordance with the regulations

made in this behalf, but the total amount of such loans outstanding at any time, including any interest

accrued thereon, shall not exceed two percent of the assets of the fund at its book value.

Realization and reinvestment: The Institution may at any time sell or realize any of its investments at such price, and reinvest all or part of the proceeds in such manner as it deems fit.

Safe custody:

The Institution shall ensure that “Proper” and adequate arrangements are made for the safe custody of the documents of title relating to investments.

Reference

http://www.thenews.com.pk/Todays-News-2-193615-NAB-protected-EOBI-culprits-for-Rs3438-billion-corruption-documents-reveal

http://www.eobi.gov.pk/

http://paperpkblog.com/news/index.php/11-transactions-declared-illegal-by-fia-in-eobi-scandal/

http://www.pakistanvoices.com/talkshow/sawal-yeh-hai-3rd-december-2010-massive-corruption-in-

eobi/76585/29

http://www.thenews.com.pk/todays-news-13-23828-sc-directs-fia-to-probe-rs40-bn-eobi-scam

http://www.thenews.com.pk/todays-news-2-190903-real-estate-of-billions

http://www.thenews.com.pk/Todays-News-13-24239-Land-sold-to-EOBI-on-established-competitive-rates:-DHA-officials

http://videos.geo.tv/videogallery.aspx?id=13171

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ANNEXURE They further said that DHA had complete title of sold property, rates offered to EOBI were quiet competitive and had

further been increased by about 30%. Development of infrastructure and utility services was almost complete, they said. The DHA officials on the condition of anonymity disclosed to this news agency that on the request of EOBI in September 2011 and January 2012, DHA sold commercial properties along DHA Expressway which included 221 Kanal commercial land in Business Square in the shape of medium and large size plots, which can be utilised for hotel and other high rise projects.

This area is adjacent to Islamabad Highway and carries good future prospects. 100 Kanal commercial land is in Business Corridor, a commercial area astride 6 lane Highway road with adequate parking and allied facilities. This area is also very close to Islamabad Highway, the officials said. Similarly, they said, the rates offered to EOBI were quiet competitive. These rates were established through advertisement (18 plots were sold in open market after advertisement and market price was ascertained) and sale of commercial property

in the same area and little away from Islamabad Highway in the same time frame. Over and above a discount of 5 percent was offered on sale price to EOBI. A sale agreement has been concluded after negotiations with mutual consent between DHA and EOBI regarding sale consideration, issuance of allotment letters, development of infrastructure and utility services of the sold property. Entire land along DHA Expressway has been transferred / mutated in the name of DHA and allotment letters of sold

property has been issued to EOBI as per procedure / authority rule. These allotment letters can be leased / mortgaged. Moreover, the officials observed that development of infrastructure and utility services in Business Square area is complete, whereas development of infrastructure and utility services in Business Corridor is about 90% complete. EOBI was requested to take possession of the sold property in January 2013.

The amount which was received from EOBI has been spent on purchase of land and development of land. During site visit on July 15, 2013, FIA teams acknowledged and documented the development. The officials added that the development may be evaluated by Nespak as suggested by FIA during their interim report to Supreme Court. The land has been transferred /mutated in the name of DHA and allotment letters of residential, commercial plots and Defence Villas were issued as per procedure which can be leased /mortgaged with financial institutions.

Documents obtained by The News reveal shocking facts that that NAB was notified about the massive corruption in EOBI deals in July 2012 with explicit details, but no inquiry was ordered by the top officials of NAB, Rawalpindi, allegedly at the behest of powerful groups involved in the scandal.

The Bureau did not bother to conduct an inquiry into the multi-billion scam even upon receiving a second complaint in March this year, sources said.Sources said it was in the knowledge of NAB higher ups that DHA authorities and other influential groups were involved in this corruption which was later proved through a probe conducted by the Federal Investigation Agency (FIA) on the orders of the apex court. Talking to The News, the spokesman of NAB, Ramazan Sajid, confirmed that the Bureau had received the first detailed complaint about EOBI corruption in July 2012 and a second complaint in March 2013.

He said the bureau started complaint verification, and notices were sent to parties concerned. He was of the view that “such inquiries take time”. However he denied the impression that NAB was sitting on the inquiry under the influence of powerful groups involved in EOBI scandal. But the sources insist that the Bureau could have prevented corruption worth billions had it taken immediate action on the first complaint by one Mohammad Aslam Son of Haji Ghulam Rasool, a resident of Bosal Sakha, Tehsil Malkwal, District

Mandi Bahauddin. In just four months, from January to April this year, Zafar Iqbal, who happens to be the younger brother of former PPP Minister Nazar Gondal, spent Rs11.334b from the EOBI funds to purchase properties. “At least this amount would have been saved had NAB taken action after July 2012,” said an official.

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Sources said the complaint received in July 2012 mentioned payment of Rs16b by Zafar Gondal to DHA for purchase of 321.3 kanals of land at an unbelievably exorbitant price. The complainant also brought into the notice of NAB other shady deal between EOBI and an individual named Abdul

Qayyum for the purchase of Crown Plaza, located in F-7 Markaz, Islamabad, on exuberant price. The document presented before the Supreme Court has now revealed that on May 18, 2012, EOBI chairman Gondal purchased the Crown Plaza, measuring 600sq yds, and paid Rs1 billion, almost 100 percent higher than the market value of the property. The deal was finalized without the approval of EOBI’s Board of Trustees.

The complainant also mentioned use of five 1800cc cars by Gondal and his lavish spending from employees’ pension funds. Upon receiving Aslam’s letter, the top official of NAB, Rawalpindi, assigned a junior officer Shoaib Sheikh to verify the complaint. But surprisingly, the senior officials did not follow up on the case and for nine months no further action was taken on the issue involving corruption worth billions. Under NAB’s standard operating procedure (SOP) a complaint has to be either disposed of within two months or upgraded

into an inquiry within the same time frame. Sources said NAB kept sitting on the complaint until another complaint was received by the Bureau in March this year. Again it could not be upgraded into an inquiry despite initiation of verification process under inquiry officer Iqbal Naveed. Sources said the NAB’s inaction for last one year over mega scam could at best be described as extreme inefficiency on the

part of NAB, Rawalpindi, and at worst, it is with connivance of corrupt elements. During his tenure, Zafar allegedly struck at least two dozen shady deals. He allegedly connived with other EOBI officials in over-evaluating properties of select individuals and parties, and purchased them for the EOBI on exorbitant rates. According to documents, Gondal “invested” Rs34,387,184,400 EOBI funds in real estate in less than three years of his stay in this position.

The Supreme Court, which has taken a suo moto notice of the EOBI corruption scandal, has ordered the Defence Housing Authority (DHA), Islamabad, to deposit Rs22 billion and directed six individuals to deposit Rs7,087 million they received from the EOBI for the purchase of property.

In its comprehensive report into the dubious purchase of properties by the EOBI, wh ich is available with The News, the FIA noted that Col (retd) Tariq Mahmood, ex-director, DHA, produced to its investigation team a copy of an agreement signed

by the DHA Islamabad, Bahria Town Ltd (BTL) and Habib Rafiq Ltd (HRL) on June 2, 2009. The report, which became the basis of the unprecedented court orders on Wednesday and Friday, said that on perusal of the agreement by the FIA team, it appeared that according to its various clauses (4.12, 5.4 5.7 etc.), the DHA had surrendered all rights of dealing with, marketing, promoting and selling of the land (321 kanal) in question, which is now a part of the sale agreement executed between the EOBI and DHA.

Similarly, it said, according to clauses 8.5, 8.52 (a, d) of this agreement, the commercial area will go to the BTL. In order to verify the existence of this agreement, the DHA officers, HRL management, and Malik Riaz Hussain, who was one of the signatories of the agreement on the behalf of BTL, were examined by the FIA team. The report said that all the three parties had stated that subsequent to the 2009 agreement, it was mutually allowed to the DHA to sell the land in question to the EOBI. This aspectinquiry. The purchase of property has been made without approval

of the EOBI Board of Trustees (BoT) as pointed out in the audit findings. During inquiry, the report said, various persons voluntarily appeared before the FIA and claimed the title/ownership of the property, which has been purchased by EOBI from DHA, is still not clear for which the revenue authorities and Capital Development Authority (CDA) have been asked to confirm the reality. The report noted that the EOBI invested Rs15.473b in purchase of 321 kanal commercial land from DHA Islamabad

through an agreement in January 2013. The entire amount has been paid by EOBI to DHA in lieu of allotment letters of the plots but nothing is in physical possession of EOBI, as this land has not been fully developed so far. According to the report, the property was evaluated by M/s Diamen Associate by EOBI. The employees of the evaluator, when confronted during inquiry, disclosed that the land was actually evaluated by one Shujja, a representative of an Islamabad-based company, who had no relevant qualification or experience of evaluation of property involving such heavy amount as he had always been working in a pharmaceutical firm and it was his first experience, it said.

The report said it was interesting to note that EOBI got assessed 93 properties purchased by it from M/s Diamen Associates and paid an amount of Rs44m for this job.

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The purchase has not been found in accordance with the Public Procurement Regulatory Authority (PPRA) rules as neither any advertisement was given nor bids were invited, hence, transparency was seriously compromised in this shady deal, the report said.

It said that in terms of Clause 3.1 of the agreement dated 18.01.2012 the DHA was bound to give possession of the land to EOBI after receipt of the payment of the total consideration. However, the possession has not been delivered to EOBI so far. According to the agreement, the report said, DHA was supposed to complete the development work within three months of the signing of agreement dated 18.01.2012. However, the same has still not been completed.

About the purchase of another property on March 5 this year in Phase-1, Sector-F, DHA, Rawalpindi by the EOBI for Rs6.825b, the FIA report said it was also done without the approval of the BoT. This included 23 commercial plots of eight marla each, 12 residential plots of 2 kanal each, 162 defence villas of three bedrooms and 29 defence villas of 5 bedrooms, the report said.

It said M/s Nespak (National Engineering Services Pakistan) has been requested for evaluation of this property as per market value. Similarly, CDA and Islamabad Capital Administration revenue authorities have been approached for determination of the title/ownership of the property. Meanwhile, a close relative of former Prime Minister Raja Pervez Ashraf received over Rs92 million in two dubious land deals with the Employees Old-Age Benefits Institution (EOBI), the price of which was fixed 25 times higher than the

prevailing market price, the Federal Investigation Agency (FIA) said in a report submitted to the Supreme Court. It said that as per information gathered during inquiry, Mohammad Sanaul Haq, seller of the land, who happens to be the brother of Raja Azeem, son-in-law of former prime minister, is a worker of Pakistan People’s Party (PPP) and was given its ticket for contesting election in NA-60. Ironically, the report said, in one transaction the seller himself mentioned the price of the land @ Rs12,00,000 per marla

(approximately) whereas the deal was finally struck @ Rs15,50,000 per marla. It said that as per EOBI document the property comprising 1 kanal and 19 marla located at Talagang Road, Odharwal in rural area, Chakwal district was purchased against consideration of Rs6,04,50,000 whereas according to registered deed, the price was shown as Rs1,17,00,000.

As per the valuation table of the Board of Revenue Punjab, the price of the commercial land in this village has been fixed as Rs60,000 per marla, the report said. It said that the title of the property is not clear and the litigation is still pending in the civ il court.The report noticed that the property was purchased from Sanaul Haq, but cheques were issued by EOBI in the name of one Azhar Hussain on behalf of the owner.

It said that another plot measuring 8 kanal located at Mouza Kallar Kahar, District Chakwal, was purchased by EOBI for Rs32m (Rs200,000 per marla). As per the sale deed, the property was bought from one Maqsoodul Hassan, the brother of Sanaul Haq, without the BoT approval and despite objection from two members of the purchase committee for investment in small towns. The report said that the land is a joint property whose price is mentioned as Rs5,280,000 in the sale deed as against

Rs32m.It said that according to the valuation table of the revenue department the commercial property in th e same village has been determined @ Rs30,000 per marla. The report said that the according to the statement of the area patwari, the possession of the land is still with the seller party. It is evident from the facts, the report said, that through these fraudulent deals a huge loss was caused to the government

exchequer and wrongful gain was given to the seller on political consideration. However, the concerned officers of the EOBI and seller are yet to be examined.