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Mehrangate Scam
A Black spot in Pakistan History

5/4/2014
L11422
Naveed Shoukat

National University of Modern

Languages
Mehrangate Scam Naveed Shoukat

Mehrangate scandal

Mehran bank was founded in 1991 as a public limited company. It was listed on KSE and

LSE. Its paid up capital was 300 million .there were six branches of Mehran bank all over the

Pakistan which were located in Karachi, Lahore, Mirpur-khas, Peshawar, Quetta and

Rawalpindi as per its annual report of 2004.its assets were consisted of 2.9 billion and its

stock market capitalization was 500 million.mr Younis Habib was the founder of Mehran

bank and working as chief operational officer. He was already convicted of 148.5 million

DBC fraud. From the beginning of its foundation there were doubts about it as per an article

licence of Mehran bank was issued as a result of a threat to governor Imtiaz Alam Hanfi at

that time by jam Sadiq Ali who was considered a mafia don .a few month later son of state

bank governor Imtiaz Alam Hanfi was kidnapped and shortly after that Mehran bank was

issued license and it started its working from 22nd of January 1992.

Scene started when chief of army staff general Mirza Aslam Baig were paid a loan of 140

million by ISI director-general lieutenant-general Asad Durrani and engineer-in-chief

lieutenant-general Javed Nasir through the owner of Mehran bank, Younis Habib. ISI

deposited funds to unite opponent of PPP and weak the Bhutto government

The scam came to sight when new ISI director-general lieutenant-general Javed Ashraf Qazi

decided to transfer ISI funds back to state owned banks as per official rules as a result

Mehran bank could not return back the money because of its poor financial position.

Investigation began and the coo of bank found accused for all this matter. After investigation

found that about 5 billion of amount was transferred to 39 fake and unknown accounts.

The case was initiated by then interior minister Asghar khan on 20 April in national

assembly. As per a list given by him following people found to be beneficiaries of this

scandal

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Mehrangate Scam Naveed Shoukat

1. Jam Sadiq Ali ( Rs. 70 million through Habib bank and Rs. 150 million through

Mehran bank)

2. MQM’s Altaf Hussain ( Rs. 20 million)

3. Yusuf Memon for Ejazul Haq and Javed Hashmi (Rs. 50 million)

4. Nawaz Sharif (Rs. 6 million)

5. Chief minister Sindh Muzaffar Hussain shah through his secretary (Rs. 13 million);

6. Afaq Ahmad’s MQM Haqiqi (rs5 million)

7. Former sports minister Ajmal khan (rs1.4 million

8. Jam Mashooq Ali (Rs. 3.5 million)

9. Liaqat Jatoi (rs1 million)

10. Dost Mohammad Faizi (rs1 million)

11. Jam Haider (rs2 million).

In an interview to geo Mr. Yusuf said that he was not asked to made payment to MQM leader

Altaf Hussain

On 7 April 1994 Mr. Younis Habib was arrested on the complain of state bank of Pakistan for

committing fraud of DBC (dollar bearer certificate) amounting rs.36.7 and not to deposit the

receiving from its sale within 72 hours.

On 14 December 1995 Younis Habib found guilty for misuse of public funds and violating

banking rule and imprisoned for 10 years.

On Feb. 29 1996 petition filed against chief of army staff Mirza Aslam Baig by Asghar khan .

In this petition Asghar khan said all politician will be punished for receiving money from ISI

to destabilize the government

In 1995, State Bank of Pakistan made merger of Mehran Bank with National Bank of

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Mehrangate Scam Naveed Shoukat

Pakistan (NBP). . In 1996 the NBP had to make full provision for Mehran's liabilities which

resulted in a net loss to NBP that year of Rs 1.26 billion. A petition was filed in objection

to the amalgamation of Mehran Bank by some of the share holders. High Court admitted

the petition against this amalgamation.

As a whole It was a realy big failure of corporate governance and regulatory authorities in

the history of Pakistan.

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 Mehrangate Scam Naveed Shoukat

References

i. Shaheen Sehbai (March 11, 2012) printed edition

ii. Ghazali, Abdus Sattar. "Islamic Pakistan: Illusions & Reality"
iii. M. H. Askari, "Aftermath of the MBL scam" - Dawn (1994)
iv. "NAB recovers Rs1.6bn in Mehran Bank case: Younis Habib’ s property sold"
DAWN.
v. Zaidi, Mujtaba Haider.( May 16, 2013) "Apathy towards Asghar Khan Case" The
Frontier Post Daily English Newspaper. http://pakistanthinktank.org/apathy-towards-
asghar-khan-case
vi. Dawn.com (8 March 2012). "Central character of Mehran Bank scandal resurfaces".
Dawn.com.
vii. Ghazali, Abdus Sattar. "Islamic Pakistan: Illusions & Reality".
viii. M. H. Askari,( 27 April,.1994) Aftermath of the MBL scam - Dawn
ix. DAWN. (02 Feb. 2009)"Nab Recovers Rs. 1.6 billion In Mehran Bank Case: Younus
Habib’s Property Sold" Dawn.com
x. Zaidi, Mujtaba Haider.( 16 May, 2013) "Apathy towards Asghar Khan Case" The
Frontier Post Daily English Newspaper.http://pakistanthinktank.org/apathy-towards-
asghar-khan-case
xi. Dawn News (8 March 2012). "Central character of Mehran Bank scandal
resurfaces". Dawn.com.
xii. Geo News (8 March, 2012) http://www.geo.tv/geodetail.aspx?id=38890
xiii. Sabir Shah, (01 March, 2012) "Print Edition"
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=12853&Cat=13#
xiv. Dawn News,(07 Mar, 2012) "Central character of Mehran Bank scandal resurfaces"
dawn.com
xv. Ahmad, A. (,17 June,1994). "Mehrangate: confusion worse confounded". Frontier
Post.
xvi. Rashid, A. (28 Apri, 1994,). "Private patronage. Review".
xvii. The Nation. (3 May, 1994,). "Who should investigate Mehran Bank Scam?"
xviii. The Nation (21 April, 1994,)."Mehran Bank’s fallout".
xix. (9 December,1996,).Mehran Bank report reveals massive irregularities. Financial
Post.
xx. Rafique, M. (1996, July 2012). "MBL scam: Habib offers government to repay
money". Frontier post
xxi. Haqqani, H. (8 May,1994). "Mehrangate: Shaking up the political order". The
Nation.
xxii. Gauhar, A. (December ,1996,). "Mehran Bank report- a judicial parody". The Nation.
xxiii. The Pakistan Times. (19 June 1994,)."The Mehran Bank probe".
xxiv. Business Recorder. (11December, 1996,)."Mehran bank scam".
xxv. Rafique, M. (1996, July 20)."MBL scam: Habib offers government to repay money".
Frontier Post.
xxvi. The Pakistan Times(19 February, 1995)."Amalgamation of MBL with NBP approve"
xxvii. Iqbal S. (23 February, 1995). "SBP announces Mehran bank’s merger with NBP".
Financia Post
xxviii. (23 June 1995)"SHC admits petition against MBL amalgamation". Financial Post.
xxix. Dawn (22 |April, 1994) "The Mehrangate Scandal".
xxx. The Nation(21 April, 1994) "Mehran Bank’s fallout.

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