The Rich and Infamous?

Financial scandals regularly occur all over the world, however in Pakistan whenever they occur they hardly ever involve unfamiliar names from financial markets (as is the case in the US, UK and elsewhere) but always our local infamous bunch of the ‘elite and already loaded’.


In recent days much attention has been focussed on a choice new $110 million Lahore housing development project of some 1600 villas under the name of ‘Sukh Chayn Gardens’.

Sukh Chayn Gardens is planned to be a walled and gated community with 24 hour armed security patrols. It is advertised to have its own clubhouse, medical clinic, shopping mall, indoor gymnasium, parks and playgrounds for children, ‘Fresh Water Brook with a Jogging Track’, independent water supply, fibre optic broadband and many other salubrious amenities.

So far it sounds like another fancy suburb for the newly rich and not so famous. But its potential for high scandal lies in the names of its sponsors and how it was financed.

According to a recent newspaper report:

"Sukh Chain Gardens, Lahore, which was inaugurated by Prime Minister Shaukat Aziz and is funded by Chinese. Ejaz Rahim is a partner in one of the biggest housing project in Lahore, while the president of Faysal Bank, Farooq Bengali also holds share in this housing project. Bengali along with Ejaz Rahim, is facing charges of benefiting from a conflict of interest situation by investing personally in a scheme where his bank was the financier. They both invested in a housing project of Habib Rafiq Developers, Alhamra Hills in Islamabad and helped many politicians and businessmen benefit from this scheme, because the project was financed by Faysal Bank. Chaudhary Munir, who is very dear to Chief Minister Punjab because of his special links with the UAE rulers and is in-charge of their investments in Pakistan, is also a partner in Sukh Chain Gardens."

As you perhaps already know Ejaz (or Aijaz) Rahim is facing indictment in the US for making millions of dollars from insider trading

Farooq Bengali is the CEO of Faysal Bank where Rahim was heading the investment bank division until recently. It is widely rumoured among local banking circles that senior bankers at Faysal Bank were engaged in a wide scale front running operation that netted them an untold fortune.

Another major sponsor is Arif Habib, the billionaire stockbroker from Karachi and reputed close associate of Shaukat Aziz.

It is also believed to raise additional finance, plots from the property scheme were handed over to influential people at throwaway rates. The beneficiaries are rumoured to include leading bank CEOs of Pakistan.

But then Sukh Chayn Gardens is just part of a growing scandal…
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Now it has been reported that a three man FBI team has arrived in Pakistan to probe a possible connection between Hafiz Mohammad Zubair Naseem and Ejaz Rahim, involved in the insider trading scam, and some Pakistani brokers, bankers and top policymakers.

Local journalist Syed Saleem Shahzad writes:

"According to sources, a FBI team arrived in Pakistan recently to probe the case and interviewed many top Pakistani bankers. Among those they wanted to talk to sources maintained, were the President of the National Bank of Pakistan, Ali Raza, Zaigham Mehmood Rizvi of House Building Finance Corporation of Pakistan, Farooq Bengali of Faysal Bank, prime ministerial financial advisor Salman Shah, Chief of Pakistan Industrial Credit and Investment Corporation Mohammed Ali Khoja.

The name of Prime Minister Shaukat Aziz, formerly a senior official in Citi Group has also been linked to the probe, it is understood."

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Just to add to all this confusion a leading Karachi banker recently confided that a CEO of a privatised bank purchased a luxury villa in Dubai for $ 2.5 million in cash.

If this is true then it raises two questions:

Normally anything bought with a suitcase full of cash looks extremely suspicious as it circumvents financial documentation. So why did this CEO use cash?

This CEO has only been in charge for two years – so how did this salaried fellow make so much money so fast?
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To add more ‘mirch to the masala’ your Blogger has also been told that a CEO of an overseas bank in Pakistan is possibly facing dismissal because part of the purchase price paid for a takeover of a local bank somehow allegedly managed to find its way back into his private account. An illegal commission perhaps?
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All your Blogger can say is: All glory be to the Bank CEO fraternity of Pakistan!




Link :The Glasshouse: Some Crimes Do Pay Well in Pakistan

financial scams
insider trading
Pakistan