ISLAMABAD: The joint investigation team (JIT) report on fake bank accounts has revealed that former president Asif Ali Zardari and his accomplices “grabbed” state-run entities in Sindh through corruption tactics.

According to the report submitted to the Supreme Court, the Omni Group (allegedly owned by Mr Zardari and his close aides) acquired four state-run entities — Thatta Cement Factory, Thatta Sugar Mills, Naudero Sugar Mills and Dadu Sugar Mills — in Sindh at throwaway prices.

Special Assistant to the Prime Minister on Accountability Shahzad Akbar said that first the Sindh government intentionally turned these entities into sick units by suspending funds/subsidies and then closed them down. These entities were later purchased by companies owned by the Omni Group, he added.

According to the JIT report, Thatta Cement was purchased by the Omni Group for Rs135 million and the amount was paid through fake bank accounts. Naudero Sugar Mills was acquired by the group in 2001 for Rs68m. However, according the JIT report, the market value of the entity at that time was Rs142.89m.

Similarly, Thatta Sugar Mills was sold to the Omni Group for Rs127.5m in 2013, while its then market value was said to be Rs716.11m. Dadu Sugar Mills was also a property of the Sindh government and it was acquired by the same group in 2008 at Rs90m against its original price of Rs626.70m.

Minister says first these units were declared sick and then sold to Omni Group at throwaway prices

When contacted, Information Minister Fawad Chaudhry said that the modus operandi of the Omni Group was so novel that they first declared the state-run entities sick and then purchased them at throwaway prices. The group later ate up the subsidies given in the name of revival of sick units, he added.

“The group not only grabbed state entities, it also swallowed the subsidies given to these entities for poor farmers and labourers.”

The information minister said the role of incumbent Sindh Chief Minister Murad Ali Shah (being former provincial finance minister) was quite significant in “shady deals” about sale/purchase and subsidies given to the four state-run entities.

According to the JIT report, the Omni Group after purchasing the four entities also gulped Rs7.19 billion subsidies given by the Sindh government. It said that a subsidy of Rs3.8bn had been given in the name of subsidised loans for the revival of sick industrial units. Of this, Rs3.72bn (97 per cent) went to the Omni Group.

Similarly, a subsidy of Rs2.31bn was given in the name of new captive power plants, of which Rs1.58bn (68pc) was obtained by the group. A sum of Rs3.89bn was released for cane growers and the group got Rs0.84bn (22pc).

Similarly, an amount of Rs1.99bn was released under annual subsidised tractor schemes and Rs1.05bn (51pc) was obtained by the Omni Group.

Fraud financial techniques

According to the JIT, the Omni Group also used techniques of financial frauds and obtained bank loans amounting to Rs53.53bn. “The investigation has clearly indentified the modus operandi of financial fraud coupled with influence over the banks in obtaining astounding loans against ‘inferior collaterals’,” it said.

The report said the group hired a single evaluator to increase the value of its inferior collaterals as the value of Naudero Sugar Mills in 2009 was Rs90m and in the same year it was valued at Rs1.56bn, while in 2006 its value was assessed as Rs4.13bn which was 46 times higher in six years. The group obtained a bank loan of Rs3.5bn by increasing the value of the mill.

Similarly, the actual worth of Tando Allah Yar Sugar Mills was Rs40m in 2011, but it was shown as Rs400m in 2012 and Rs1.1bn in 2017 which is 28 times higher in six years. The Omni Group obtained a bank loan of Rs2.5 billion against this mill.

Two plots — A1-50 HITE Hub and 87/96-C Model Town, Lahore — were taken at Rs198m and Rs193m, respectively, and they were pledged with the banks with their enhanced values of Rs1.8bn and Rs300bn, respectively.

The JIT has recommended sending the case to the National Accountability Bureau and freezing all assets (worth less than Rs53.53bn) of the Omni Group and its directors.

Published in Dawn, December 26th, 2018