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Senate Finance Committee lauds NAB performance in modaraba scam probe

Senate Finance Committee lauds NAB performance in modaraba scam probe

ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Wednesday lauded the National Accountability Bureau (NAB) for showing remarkable performance in investigating into the modaraba scam.

The Finance Committee also directed NAB to take all necessary measures to provide relief to the victims and shareholders in modaraba companies.

“Modaraba is one of the prime modes of Islamic financial system and the process of Islamization of the economy started in 1977 in the country,” Director General NAB told the committee about the background of the Modaraba business in the country.

He said that government in the light of recommendations of Council of Islamic Ideology (CII) introduced certain changes in the Banking Companies Ordinance and promulgated the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 to provide a legal framework for Islamic financial system. However, taking benefit of the legal cover a number of companies got involved in the forgery like activities

He further said that around 76 cases of fraud committed in the name of modaraba companies had been registered so far and after thorough investigation it was disclosed that majority of companies were not registered in the name of modaraba companies with the Security and Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP) and other regulators.

He further said that cases against 25 companies were in progress as over Rs 24 billion had been plundered from 30400 account holders by the so called Modaraba Companies in this scam so far.

“NAB has detained big fish and a few accused are ready to return the money to the account holders, however, NAB has recovered over Rs 700 million and confiscated assets worth of Rs 13 billion” he observed.

He said that major portion of money was transacted through banking channels from the abroad and in the light of findings of the investigation properties, plazas and houses owned by the accused companies had been taken into custody.

At this the committee directed the NAB to ensure earliest possible return of the plundered money to the account holders to provide them relief.

To a question raised by Senator Kamil Ali Agha, DG NAB told the committee that 76% assets of Taj Company in Lahore had been returned to origin shareholders and Taj Company was now dealing in business with a changed name. Then the committee also recommended the Shifa Medcos scam to NAB for investigation.

It is pertinent to note here that modaraba companies and modarabas are operating in Pakistan for the last over 30 years as a unique model and there is no example of any similar legal entities in rest of the world.