A Senate panel decided again on Tuesday to call representatives of three international banks, which the government had hired to float $500 million worth of Eurobonds about two years ago, as the State Bank of Pakistan (SBP) disassociated itself from the pending issue.The Senate Standing Committee on Finance and Revenue has been trying to determine whether the money invested by foreigners in the dollar-denominated bonds had actually flown from Pakistan.“We have decided to call representatives of three international banks in the next meeting,” said Senator Saleem Mandviwalla, Chairman of the Standing Committee on Finance after an in-camera meeting, which discussed the role of financial advisers in the bond issue.The meeting lasted hardly 10 minutes as Finance Secretary Shahid Mahmood had not all the requisite information.Committee members were of the view that their questions pertained to the financial advisers so it would be better if they appeared before it, said a member after the meeting.In September 2015, the government issued Eurobonds valuing $500 million with 10-year maturity in the international market at an interest rate of 8.25%. It offered 6.12% above the US Treasury rate for the bond.Its decision to go ahead with the issue despite unfavourable circumstances fuelled speculation that some dignitaries had capitalised on the opportunity.The government hired Citibank, Deutsche Bank and Standard Chartered Bank for the bond float. These banks are also providing foreign commercial loans to the finance ministry to meet its growing balance of payments requirement.The then finance secretary had told the committee that three Pakistani banks including Bank Alfalah and United Bank Limited also invested in the Eurobonds. Offshore branches of these banks invested in the bonds and the money did not go from Pakistan, he said. Roughly 14% of the $500 million was invested by the Pakistani banks.In February last year, the standing committee decided to summon representatives of the foreign banks to seek answers to these questions. However, former SBP governor Ashraf Wathra requested the committee not to summon the representatives.Newly appointed SBP Governor Tariq Bajwa told the committee that the bond issue was related to the finance ministry and the central bank had no role in it, said a committee member.The standing committee decided to drop its probe into alleged wrongdoing in the right share issue of The Bank of Punjab (BoP) after the regulators gave a clean chit.Both the Securities and Exchange Commission of Pakistan (SECP) and the SBP said rules were fully observed while issuing 70% right shares at Rs12 per share. The BoP issued the shares after the SBP asked it to meet the statutory paid-up capital requirement.The standing committee had taken up the matter on a complaint filed by the bank’s minority shareholder Ali Nadeem. The right share issue at Rs12 per share was aimed at benefiting the underwriters which were suddenly increased from two to six parties, claimed Nadeem before the standing committee in its previous meeting.The general public and institutional investors subscribed to only 0.26% of the right shares, which allowed the underwriters to pick all the remaining shares, said Anayat Hussain, SBP Executive Director.He revealed that after the right share issue, the share of underwriters stood at 17.47% in the total issued shares. Next Capital and Arif Habib Limited were the underwriters of the right issue, said Akif Saeed, SECP Commissioner.The SBP executive director said 17.47% was a significant shareholding and both the underwriters would have to approach the central bank for permission to hold these shares.“It will be a judgmental call of the SBP whether to allow these underwriters to hold these shares,” he said, adding there was a precedent in the past where shareholders were asked to offload their holdings.Published in The Express Tribune, August 9, 2017.Like Business on Facebook , follow @TribuneBiz on Twitter to stay informed and join in the conversation.