REFERENCE / COMPLAINT NO. VIII

Reference dated 13-7-2001 - Irregularities in MES accounts / Bahria Town

July 13, 2001

Lieutenant General Khalid Maqbool
Chairman
National Accountability Bureau
Chief Executive's Office
Islamabad

Dear General Maqbool,

The following facts are brought to the information which have been sent to the Pakistan Peoples Party (PPP) for further investigation and action.

During 1994 Deputy Director FIA Crime Circle Rawalpindi initiated an enquiry against certain officers of MES, on the basis of a source report. During early 1995 The daily "Nation" Islamabad published a story about this scam.

Two contractors by the name of Sakhi Mohammad Khattak and Mohammad Ayub approached the Special Audit of Defence Services by alleging embezzlement in this organization. On the basis of this complaint special audit was carried out of Garrison Engineer ( Army ) East, Garrison Engineer ( Army ) West and Central Stock Rawalpindi. by detecting fraud to the tune of Rs. three billion. The matter was brought to the notice of Chairman, Public Accounts Committee, Rao Mohammad Hashim Khan who took this matter very seriously and asked ministry of Defence to provide its comments.

In the meanwhile Military Intelligence sent a report to COAS by saying that nothing had been done wrong there and it is all being done to defame Pak Army. The then Quarter Master General Lieutenant General Naseer Akhtar sent a similar report to Ministry of Defence and matter went to cold storage after dismissal of PPP government.

During May 1997 on receipt of a complaint from the above-mentioned contractors
Mr. Khattak and Ayub, FIA Rawalpindi registered an FIR and arrested Mr Zaigham Khan, Executive Engineer and his cashier Mukhtar. FIA used the documentary evidence that had been collected. There was a transfer of funds of about four million US $ from Citi Bank Rawalpindi to Citibank Dubai and London made by the above said XEN Zaigham Khan. An amount of three crore of Rupees, belonging to Mukhtar cashier, and lying as a fixed deposit in National Savings Centre Sihala was frozen by FIA. There was a hue and cry in GHQ after these arrests and very senior officers of Pak Army visited the DG FIA. Lieutenant General (Retd) Ch Iftikhar brother of Ch Nisar was the Secretary of Defence. After some time both the accused were released on bail on medical ground under the order of Lahore High Court.

This case was subsequently transferred to Accountability Court No. 3 Rawalpindi and is being heard there. XEN Zaigham Khan and Cashier Mukhtar have not been arrested by the NAB being on bail from Lahore High Court. on medical ground

The audit reports, which are under consideration of the Adhoc Public Accounts Committee, are the same, which were prepared during PPP regime in 1995-96. The Ministry of Defence, even today, is advocating that nothing has happened there.

In this scam following are involved :

Brigadier ( Engr) Jahangir Khan
Colonel (Engr) Mohammad Idrees
Major ( Engr)Ejaz Bangash
XEN Zaigham Khan Mahsood
SDO Abbasi
Cashier Mukhtar

Bahria Town :
Another interesting case of NAB is a Bahria Town scam. Arrest warrants of Riaz Hussain Malik the executive of this set up were issued by NAB. The police raided his house in Rawalpindi Cantt. He managed to escape from the back door and using his contacts like Malik Meraj Khalid ( his sleeping partner in this project) managed to settle the things with NAB without paying a single penny to the national exchequer. He "settled" the things with Farooq Adam the ex Prosecutor General of NAB.


Sincerely,

(Jahangir Bader)
Secretary General