Harris Steel Scam, the biggest fraud in the history of country’s banking sector.

Harris Steel Scam, the biggest fraud in the history of country’s banking sector.<br />The former president of Bank of Punjab, Hamesh Khan, fled the country after committing the fraud while the bank and other authorities probing the matter are under immense pressure to hush up the issue. Interestingly, Hamesh Khan sneaked out of the country when his name was on the Exit Control List (ECL).<br />Well-placed sources disclosed that Hamesh Khan had committed the fraud in connivance with Sheikh Muhammad Afzal, the Chief Executive of Harris Steels Industries and Company.They used fake NICs, fake company documents and bogus collaterals of the barren and useless land situated at the banks of rivers having no market value.<br />The Internal Audit Report of the BoP has revealed that during the presidency of Hamesh Khan, 23 fictitious accounts were opened and later huge finance facilities were sanctioned to these accounts. Ironically all the 23 accounts were opened on fake NICs and with inadequate securities.“The accounts were opened in the name of fictitious persons carrying fake ID cards. The collateral/security which were provided against the financial facility, sanctioned to the 23 accounts, were bogus, extraordinarily high valued or based on fake evaluation of properties,” sources revealed, quoting excerpts of the report of the internal auditor. Later, the State Bank of Pakistan constituted an inspection team, which conducted the inquiry and confirmed that the loans were sanctioned to the Harris Steels on fake evaluation.<br />Sources said that the SBP inspection team had also reported that Harris Steel is the leading beneficiary of these borrowings as the amount of Rs 9 billion was sanctioned to the Harris Steels and associated accounts. Following the report of its inspection team, SBP directed the BoP management ‘to close the accounts and go for provision’. The top bank management then did not pay heed to the SBP instruction by using delaying tactics, sources added. Then the SBP issued letters to the BoP management stating that these huge loans were sanctioned against the law and the rules and regulations.Even before these 23 accounts were opened, Sheikh Muhammad Afzal manipulated to open three accounts in the BoP in the name of Harris Steels, Haider Steels and Prime Steels in 2005. The directors and guarantors in these three accounts were also bogus and each was carrying three ID cards at a time with different names and address.The Bank of Punjab sanctioned Rs 5 billion loans to Harris Steels, Haider Steels and Prime Steels on the fake documents in 2005. Later, Sheikh Afzal and company opened 23 fresh accounts, as the bank was not in a position to sanction more loans after lending them Rs 5 billion. The bank later sanctioned another Rs 4.5 billion loan to these 23 accounts. With management highly favourable, Sheikh Afzal and company managed to get loans worth over Rs 9 billion in just two years from the BOP, which was unprecedented as the banks never sanction such a huge loan to an unknown company in such a short span of time. The accused, soon after the NAB started investigations, approached the Lahore High Court and filed various writ petitions for quashing the investigation started by the bureau.The LHC in response to these petitions passed an order dated June 18, 2008 that no uncalled harassment should be caused to the petitioners. The source said that during the course of investigation, the NAB arrested bank employees involved in the fraud and conducted numerous raids on the properties owned by the Harris Steels. During the raids, the NAB recovered fake CINCs, property documents and stationery of various fictitious companies from the properties owned by Sheikh Afzal and others

Harris Steel Scam, the biggest fraud in the history of country’s banking sector.

Harris Steel Scam, the biggest fraud in the history of country’s banking sector. The former president of Bank of Punjab, Hamesh Khan, fled t...

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