Dilemma of the Sost Dry Port and NBP Loan

Asif Iqbal  

Pak-China Sost Port Company was set up in 2002 as a joint venture between Pakistan’s Silk Route Dry Port Trust holding 40 per cent shares and China’s Sinotrans Xinjiang Jiuling Transportation & Storage Company holding 60 per cent shares. The Chinese firm had invested cash while the dry port trust offered ‘land’.

Recently a local court issued a notice to auction the hotel building along with 6.15 Kanal land which is the property of Pak-China Sost Port Co. this property was kept as mortgage against a loan financed by NBP.

The story began when National Bank of Pakistan (NBP) issued a sum of Rs. 50 Million to Salim Khan who was then Vice Chairman of Silk Route Dry Port Trust. He is the son of Mir Ghazanfar Ali Khan who is the current Governor Gilgit-baltistan. Mr. Ghazanfar was then Chief Executice of Northern Areas Legislative Council and Chairman of Silk Route Dry Port Trust.

The Rs50 million loan was given to six people — four Chinese nationals and two Pakistanis — against ‘property, stocks and personal guarantees’. The six have been identified as Yuan Juamnmin, chairman of the company’s board Salim Khan (vice-chairman), Chen Mingxing, Raja Shahbaz Khan, Hou Enzu and Ms Wing Ping. The advice to sanction the loan was issued by NBP regional office Gilgit which had accepted Mir Ghazanfar Ali Khan, Chairman of the Silk Route Dry Port Trust, as a guarantor. (DAWN)

 The bank issued loan on a jointly signed application by both (Chinese and Pakistani) partners. The sum of 50 Million was transferred to Silk Route Dry Port Trust’s account in October 2007 according to bank records. Some sources also claim that the loan was granted in 2006. But the Chinese partners later disowned the loan and claimed that they knew about it after the deduction of 1.46 Million as markup of the loan from the company’s bank account. They raised the case with the NBP officials and warned them that the loan is approved on fake and falsified documents and JV isn’t responsible for the payment.

In a letter No. HRM&AG/IDW/SOST/2008/3236 dated: 25.11.2008 by Executive Vice President NBP wrote to Mr. Yuan Jianmin Chairman Pak-China Sost Port Company (Pvt.) Ltd. He wrote

“We share your concern equally regarding the wrongful sanction and disbursement of financing facility which was never applied by M/S Pak-China Sost Port Co. (Pvt.) Ltd. As per preliminary investigation report the name of Pak-China Sost Port Co. (Pvt.) Ltd. Was misused for the said loan illegally. We confirm that the interest of Pak-China Sost Port Co. (Pvt.) Ltd. and Chinese investors is quite safe and protected. NBP has no recourse to the company for recovery of this loan. The money involved in the racket shall be recovered from the beneficiaries who have committed the fraud against the bank.”

In another letter No. HRM&AG/IDW/SOST/2009/876 dated: 25.02.2009, he stated:

“NBP has already conducted and completed a thorough investigation in the matter which revealed that Prince Saleem Khan, Vice Chairman of the company misused his powers and in connivance with NBP Sost branch employees availed the financing facility. NBP has initiated disciplinary proceedings and legal recourse against the delinquents to take them at task.”

But the Chinese were not unaware during the initial loan procedure because when an MoU was signed between SRDPT and Sinotrans in the presence of Federal minister for Kashmir affairs and Northern Areas Major (Retd.) Tahir Iqbal to register a joint venture in February 2007, Economic and commercial Counselor’s office of the embassy of Peoples Republic of China in the Islamic Republic of Pakistan, the following was mentioned in a press release:

“The minister also decided that the loans taken separately by the Chinese Company and the “Silk Route Dry Port Trust” will not be a liability of the joint company and will be the own responsibility of these companies.”

It seems that Mr. Ghazanfar tries to give clean chit to his son Saleem Khan who is the actual beneficiary of the loan by using his political powers. He wants to settle the loan dispute by auctioning the port premises. PMLN granted ticket to Mr. Saleem to contest in by election for GBLA-6 to be held on 28th May.

Right now the Silk Route Dry Port Trust cabinet took stay order against the auction and stay order has been granted by the court. Now it is up to the court to decide in upcoming hearings.

Asif Iqbal is a Lahore based freelance contributor. He can be reached at hunzaiasif@gmail.com