"Loans were extended by a set of individuals, and monitoring was done by others. It would be quite difficult to arrive at clear-cut conclusion and definitive evidence of individuals' interaction in a court of law," sources quoted Finance Ministry as saying in a report to be discussed by the Cabinet on Wednesday.
The said that different heads of IDBP wrote off loans of Rs 7.772 billion from 1989 to 2004, of which, Rs 5.862 billion was waived from 2000 to 2004 during General Pervez Musharraf's tenure as President and Chief Executive.
Sources said that Rs 1.089 billion was written off in 2000-01, followed by Rs 292.858 million in 2001-02, Rs 1.245 billion in 2002-03, Rs 258.155 million in 2003-04 and Rs 2.976 billion in 2004-05. However, total financial loss had accumulated to Rs 27.46 billion up to June 2006.
Sources said that the Cabinet, while considering Finance Division's summary on "corporatisation and restructuring of IDBP' in its meeting of July 12, 2003, decided that details of persons/agencies responsible for the bank's financial problems along with complete losses sustained by the bank should be placed before the Cabinet.
Sources said that a summary was submitted to Cabinet Division on August 17, 2004 soliciting approval for IDBP (re-organisation and conversion) Bill 2004 together with the State bank's investigation report about losses of IDBP.
The Cabinet Division advised that in view of importance of proposed legislation, two summaries - one relating to the proposed legislation and the other to the SBP report - might be submitted separately, sources added.
Accordingly, a summary for the Cabinet on October 6, 2004 was submitted for approval of the IDBP (re-organisation and conversion) Bill 2004.
The Cabinet in its meeting on October 13, 2004 approved the bill, which was cleared by the Standing Committee of the National Assembly on 2nd August 2005 and referred to the House for passage.
Sources further said that as for the report on the IDBP losses and the persons involved, State Bank of Pakistan, being the regulator of the banking sector, was requested to investigate.
The sources said the government has only forwarded five cases to the National Accountability Bureau (NAB) which includes Plaza Enterprises Limited, whose case is pending before the Sindh High Court.
Hayat Vinyle Limited had offered a plea bargain with the bank after which the bank wrote of Rs 22.279 million loan. As regards Ital Pak Marble Limited, the bank said that its losses could not be determined now and would be finalised after recovery Rs 42.366 million as per the MoU.
Regarding the case of Ital Pak Marble and Pakistan Multicoating Limited, the bank said that due to facilitation provided by NAB, addendum to the MoU was prepared by Mandviwala and Zafar Legal Consultants regarding further payment of Rs 1.128 billion to be received by the bank after incorporating developments that have taken place since the original MoU was signed.
In this regard, after unanimously arriving at consensus amongst the bank and Sultan Lakhani, settlement agreement was signed in the office of NAB Sindh at Karachi on August 9, 2004.
About Delta Type Limited, the bank said that offer made by the borrowers at NAB was not acceptable to the bank being on lower side. As such the case was returned by the NAB. The bank is continuing legal action against the company and its director and guarantors, sources added.