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Straggering 31 Billion Dollar corruption under Musharaf
23 November 2009
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LPP Press Confarence 23 Nov 2009. Farooq Tariq, spokesperson Labour Party Pakistan.

Labour Party Pakistan is of the firm view that the value of the national wealth plundered during eight years of General Musharaf regime is much higher than what is being estimated and investigated for the 11 years of civilian rule when Benazir Bhutto and Nawaz Sharif were in power. Gen Musharaf must be brought back to Pakistan and made to face the corruption and sedition charges.

According to our estimates, a massive corruption amounting to over 2,576 billion rupees (US $31 Billion) took place during 8 years of Musharaf-Shaukat Aziz. A major part of it—over 1,550 billion rupees—was embezzled through just one wrong economic policy, privatization of national assets.

The total national wealth plundered in some areas included:

Privatization: 1550 billion rupees
Bank of Punjab: 7 billion rupees
Petroleum: 83 billion rupees
Stock Exchange 780 billion rupees
Fiddling in aid for earthquake victims: 120 billion rupees
Sugar scandal (2005): 36 billion rupees
Total: 2576 billion rupees

A sum of 83 Billion Rupees was gobbled by different oil companies with the help of corrupt oil ministry officials and the minister himself by fixing a prices formula that favored oil companies.

The National Accountability Bureau (NAB) has submitted to the Justice Bhagwandas Commission a report on these wrongdoings. As a result of faulty policies, the profits of Shell Pakistan, Caltex and PSO registered an increase of 232 per cent, 281 per cent and 252 per cent respectively between 2001-02 and 2004-05. Likewise, the profits of Attock Refinery, National Refinery, Pak Refinery and Parco jumped by 4331 per cent, 3578 per cent, 1717 per cent and 597 per cent, respectively, between 2001-02 and 2004-05.

Another 7 Billion Rupees were taken away from Bank of Punjab by making fake declarations to enable a fake steel company get the bank loan. The bank of Punjab was functioning under direct orders of Choudry Pervaiz Elahi, the then chief minister of Punjab.
In March 2005 the share market collapsed. Quite suspiciously the KSE-100 share market index had surged from a figure of 6,218 on 31 December 2004 to a startling high of 10,303 on 15 March 2005 . In a short space of two and half months the market had ballooned up by 65%. And then it crashed hitting a low of 6,939 on April 12, 20 The financial explosion caused a loss of Rs780 billion - the losers were small and middle class investors.

The evidences revealed then prime Minister Shaukat Aziz as orchestrating the whole trap with help of their close allies at Karachi Stock Exchange.

Here is a list of leading 13 of the 88 brokers who have been named in the forensic report as having profited from the ’situation’: Atlas Investments, AKD Securities, BMA Securities, Arif Habib, Orix Investment Bank, KASB, Taurus Securities, Abdul Jabbar Khanani, Escort Investments, Jehangir Siddiqui, Akbar Ali Cassim and Sons, Motiwala Securities, Elixir Investments.

The claim that corruption cases involving embezzlement of around Rs1,000 billion were terminated under the NRO is peanuts if one compares it with the corruption carried out under General Musharaf and Shaukat Aziz with full support of Chaudrys of Gujrat, the land grabbers.
After coming to power General Musharaf declared that he would not allow the people to be taken back to the era of “sham democracy” but to a true one. How ironic it is that he himself promulgated the most notorious corruption ordinance in the shape of NRO in a bid to prolong his rule.

In November 1999, Musharaf set up the National Accountability Bureau (NAB) to deal with the cases of corruption. But soon it became apparent that banks and financial institutions had failed to make any appreciable recovery out of the total estimated amount of Rs356 billion payable by defaulteds as on 12 October 1999. (This figure was cited by the Supreme Court in the Zafar Ali Shah case from a report of the Governor, State Bank of Pakistan.)

A record 700 billion Rupees of corruption has taken place during the privatization of financial institutions. When Habib Bank Limited’s (HBL) 51 percent shares were sold out to Agha Khan Fund for Economic Development in December 2004 for only 22 Billion Rupees, its total assets were more than 570 billion Rupees ($8.76 billion). While another larger bank, United Bank Limited (UBL) was sold out only for 13 billion Rupees. The sale of these two banks on throwaway prices is the largest financial scandal in Pakistan history.

The privatization of 26 per cent shares of Pakistan Telecommunication Limited (PTCL) to Dubai based Aitsalat with management rights for only 157 Billion Rupees ($2.59 billion) is another gross violation of the rules set up even by Privatization Commission of Pakistan. The Aitsalat bought PTCL after a 10 days strike against privatization by workers.

Although the protesters were crushed by the military regime in June 2005, the company refused to take over and sought further concessions. At the demand of the private company, an amount of $370 million was reduced from the original price and payment of the rest of the amount was accepted in installments.

Aitsalat announced at the time of privatization in 2005, that none of the 70,000 workers would be fired. However, in 2007, the company kicked out 30,000 workers in the name of so-called voluntary scheme.

Karachi Electrical Supply Corporation (KESC) was sold out for only 16 billion Rupees. It failed to improve any electricity supply. On the contrary, there has been regular load-shedding making most of the political parties to demand re-nationalization of the KESC.

There has been a severe crisis in the agriculture sector due to privatization of fertilizer units. Pak Saudi Fertilizer in Mir Pur Mathelo was handed to Fauji (military) Foundation in 2002 for just 8 billion Rupees. At the time, its annual profit was more than 4 billion Rupees. At Multan, Pak Arab Fertilizer was handed over to Arif Habib Group for only 13 billion Rupees. The price of the land of this factory was over 40 billion Rupees at the time of the sale in 2006. On 15 July 2006, the largest Public sector factory Pak American Fertilizer was handed over for just 16 billion Rupees.
After the privatization of these factories, the price of a pack of fertilizer has gone up from 1300 Rupees to 3700 Rupees. This has put a massive extra burden on the peasants and cost of all agricultural inputs has shot up.

Lahore’s historic Falate’s Hotel was sold out for only 1.21 billion Rupees. It is located in the heart of Lahore spreading over 50 kanals of precious land.

Large-scale corruption is witnessed in almost every deal done by the PC. According to an independent research report, not only quality of the products produced by these privatized companies worsened, their prices also registered massive hike.

The economy is in consistence decline. As a result, the trends of monopolizations have increased and the multinational companies have further monopolized the economy. These all facts negate the very justification of privatization.

We demand the PPP government put an immediate stop to the privatization process, form an independent commission to investigate the corruption involved in the sell-off processes, abolish the Privatization Commission and Privatization Ministry.

The Protection of Economic Reform Ordinance should be withdrawn as it gives constitutional protection to the process of privatization.

The direct negative impact of privatization has been seen on working class. At least 600.000 workers have lost their jobs during the 15 years of privatization from the privatized institutions. Most of privatized factories work on contract system, opening a flood gate of informal sector, a severe exploitation of workers - particularly women workers - where no labour laws are applicable.

We demand a commission to look into the facts and the government must bring the people involved in corruption practices during the Musharaf era. General Musharaf and Shoukat Aziz must be brought back to Pakistan to face the charges. Mr. Salman Shah, the economic adviser of General Musharaf, must be immediately arrested on facilitation and enabling the corrupt people to earn more.

We also demand that all those in NRO list must be given a chance to prove themselves innocent. Justice must be done with all the corrupt politicians, military generals, bureaucrats and businessmen. The NRO list is just the first beginning of opening the lid from the corruption cauldron.


Online 4 February 2010
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