Mehran bank scandal
Encyclopedia
The Mehran bank scandal also known as Mehrangate, was a major political scandal in the history of Pakistan
between 1990-1994 in which senior politicians and political parties were found to have been bribed by Pakistan Army and intelligence officers, from ISI, to prevent the re-election and to destabilize the government of the Pakistan Peoples Party
(PPP).
Initiated by Pakistan Army
's Chief of Army Staff General Mirza Aslam Beg with the alleged support of President
Ghulam Ishaq Khan
payments of up to 140 million PkR were made by the Inter-Services Intelligence
(ISI) Director-General Lieutenant-General Asad Durrani
and Corps of Engineers
Engineer-in-Chief
Lieutenant-General Javed Nasir
via the owner of Mehran Bank Yunus Habib. Intelligence funds were deposited in Mehran bank in 1992 propping up what was an insolvent bank as a favor for its owner's help in loaning money to the Inter-Services Intelligence in 1990 that was used in the creation of the right wing alliance Islami Jamhoori-Ittehad (IJI) and bankrolling the campaigns of many opponents of the PPP.
The scandal subsequently broke after the new ISI Director-General Lieutenant-General Javed Ashraf Qazi
decided to transfer the intelligence fund back to state owned banks as per official rules. Mehran Bank was unable to return the money due to its poor financial state and collapsed. It was later discovered that large sums had been siphoned off to 39 fictitious parties.
In 1995, Mehran Bank was amalgamated with the National Bank
and in 1996 the NBP had to make full provision for Mehran's liabilities which resulted in a net loss that year to the bank of Rs 1.260 billion.
On April 20, 1994, giving details about the payments made by Mr Habib to generals, politicians and political parties, the then Interior Minister, Naseerullah Babar
, told the National Assembly that the main beneficiary of his largesse was former army chief General Mirza Aslam Beg who received Rs140 million.
Yunus Habib was arrested on April 7, 1994 for misappropriation in the sale proceeds of the Dollar Bearer Certificates. On Dec 14, 1995, Younus Habib was convicted of fraud and embezzlement and given a sentence of 10 years rigorous imprisonment by the Special Court for Offences in Banks in Sindh.
An amount of two billion dollars was also paid to Syed Jaffar of PPP
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
between 1990-1994 in which senior politicians and political parties were found to have been bribed by Pakistan Army and intelligence officers, from ISI, to prevent the re-election and to destabilize the government of the Pakistan Peoples Party
Pakistan Peoples Party
The Pakistan Peoples Party , is a democratic socialist political party in Pakistan affiliated with Socialist International. Pakistan People's Party is the largest political party of Pakistan...
(PPP).
Initiated by Pakistan Army
Pakistan Army
The Pakistan Army is the branch of the Pakistani Armed Forces responsible for land-based military operations. The Pakistan Army came into existence after the Partition of India and the resulting independence of Pakistan in 1947. It is currently headed by General Ashfaq Parvez Kayani. The Pakistan...
's Chief of Army Staff General Mirza Aslam Beg with the alleged support of President
President of Pakistan
The President of Pakistan is the head of state, as well as figurehead, of the Islamic Republic of Pakistan. Recently passed an XVIII Amendment , Pakistan has a parliamentary democratic system of government. According to the Constitution, the President is chosen by the Electoral College to serve a...
Ghulam Ishaq Khan
Ghulam Ishaq Khan
Ghulam Ishaq Khan , abbreviated as GIK, was the seventh President of Pakistan from August 17, 1988 until July 18, 1993 and a career statesman from the start to the end of cold war...
payments of up to 140 million PkR were made by the Inter-Services Intelligence
Inter-Services Intelligence
The Directorate for Inter-Services Intelligence , is Pakistan's premier intelligence agency, responsible for providing critical national security intelligence assessment to the Government of Pakistan...
(ISI) Director-General Lieutenant-General Asad Durrani
Asad Durrani
Lieutenant General Mohammad Asad Durrani , is a retired 3-star rank general in the Pakistan Army and presently an intelligence commentator...
and Corps of Engineers
Pakistan Army Corps of Engineers
The Pakistan Army Corps of Engineers, , is an active military administrative staff corps, and a major science and technology command of the Pakistan Army...
Engineer-in-Chief
Engineer-in-Chief (Pakistan Army)
Engineer-in-Chief or E-in-C, is a Colonel Commandant of the Pakistan Army Corps of Engineers, Frontier Works Organisation and the Military Engineering Services of Pakistan...
Lieutenant-General Javed Nasir
Javed Nasir
Lieutenant General Javed Nasir, HI, was a three-star general of the Pakistan Army who headed the Inter-Services Intelligence from March 1992 till May 1993...
via the owner of Mehran Bank Yunus Habib. Intelligence funds were deposited in Mehran bank in 1992 propping up what was an insolvent bank as a favor for its owner's help in loaning money to the Inter-Services Intelligence in 1990 that was used in the creation of the right wing alliance Islami Jamhoori-Ittehad (IJI) and bankrolling the campaigns of many opponents of the PPP.
The scandal subsequently broke after the new ISI Director-General Lieutenant-General Javed Ashraf Qazi
Javed Ashraf Qazi
Lieutenant General Javed Ashraf Qazi, HI, SBt, is a Pakistani general and politician who is currently a Senator in the Parliament of Pakistan. During his army career, Qazi headed the Inter-Services Intelligence from 1993 to 1995 and Military Intelligence from 1990 to 1991...
decided to transfer the intelligence fund back to state owned banks as per official rules. Mehran Bank was unable to return the money due to its poor financial state and collapsed. It was later discovered that large sums had been siphoned off to 39 fictitious parties.
In 1995, Mehran Bank was amalgamated with the National Bank
National Bank of Pakistan
National Bank of Pakistan is one of the largest commercial bank operating in Pakistan. It has redefined its role and has moved from a public sector organisation into a modern commercial bank...
and in 1996 the NBP had to make full provision for Mehran's liabilities which resulted in a net loss that year to the bank of Rs 1.260 billion.
On April 20, 1994, giving details about the payments made by Mr Habib to generals, politicians and political parties, the then Interior Minister, Naseerullah Babar
Naseerullah Babar
Major-General Naseerullah Khan Babar , SJ, HJ, was a retired 2-star rank general officer in the Pakistan Army, and later career military officer-turned statesman from the leftist democratic soclialist, the Pakistan Peoples Party...
, told the National Assembly that the main beneficiary of his largesse was former army chief General Mirza Aslam Beg who received Rs140 million.
Yunus Habib was arrested on April 7, 1994 for misappropriation in the sale proceeds of the Dollar Bearer Certificates. On Dec 14, 1995, Younus Habib was convicted of fraud and embezzlement and given a sentence of 10 years rigorous imprisonment by the Special Court for Offences in Banks in Sindh.
See also
- Establishment (Pakistan)Establishment (Pakistan)The Establishment is a term used commonly by Pakistani political scientists and also by political scholars and analysts around the world for the powerful military-dominant oligarchy in Pakistan...
- Operation Midnight JackalOperation Midnight JackalOperation Midnight Jackal was a political scandal in Pakistan in 1989 which members of the ISI were exposed in a sting operation as wanting to overthrow the government of Benazir Bhutto. Former ISI operative Brigadier Imtiaz Ahmed Billa is regarded as the mastermind of the plot...
An amount of two billion dollars was also paid to Syed Jaffar of PPP