Sherry's husband & Rs 100m NBP gift
Mr Nadeem Hussain, husband of Information Minister Sherry Rehman, is a privileged person in the modern day Pakistan. His micro-finance bank, Tameer Finance Bank Limited (TMFB), recently got a Rs100 million loan from National Bank of Pakistan (NBP) despite being declared 'negative' in ratings.
Sources say the National Bank of Pakistan (NBP) President Ali Raza was made to approve the loan for the micro-finance bank, as he feared the high profile PPP minister might turn against him in case he declined.
But the NBP chief says there was no arm-twisting and the loan was sanctioned on merit.
Talking to this scribe, Mr Raza said as NBP did not do
business at micro-level so it decided to extend facilities to the micro-finance bank. He opined that the TMFB had a sound financial base and a reputed telecom company was also investing in it. When asked about the dissenting note of the top executives, he claimed that they had prepared the report keeping in mind a normal bank, but the micro-finance bank earns profits after a long span of investment.
Information Minister Sherry Rehman, when contacted, strongly refuted to having used any kind of political pressure to secure a loan for her husband's bank. "I have no concern, no share holding, nothing to do with the bank. I even don't know if they had applied for the loan or
not. I think some political opponents of mine are trying to propagate this non-issue," she categorically said.
She said she had never contacted Ali Raza, the NBP president, though she knew him well socially. "I have not used my influence in any way in the financial matters of my husband," she added.
Mr Nadeem Hussain, when contacted, said he had secured this facility from National Bank and had repaid it. He denied having used the political clout of her spouse. "Our bank is A-rated. We have secured this facility from two more banks. The financial health of our institution is very good. This is a normal procedure to get such facilities from other banks, nothing wrong with this," said the TMFB president.
While the NBP chief easily hinted that his team responsible for approval of such a critical loaning facility to the other institutions did not have these aspects in mind, the dissenting note by three top executives, obtained by The News was signed by Shahid Anwar Khan, SEVP, Group Chief Credit Management of the bank; Wahajat A. Baqai, SVP, CMG; and Arshad Zia, AVP, CMG.
It reads: "The Tameer Finance Bank Limited (TMFB) started its operations in August 2005. Since the start of its operations, the TMFB is in continuous losses. In 2007,
the loss after tax is increased to Rs228 million compared to loss of Rs50 million in 2006. Because of the losses, the equity of TMFB has subsequently reduced to Rs335 million in 2007 from Rs551 million in financial year 2006.
The loss of Rs44 million in first quarter of 2008 further deteriorated the equity base. The rating of the bank is
another concern. As per JCR VIS the outlook for TMFB is negative. Since NBP presently has no relationship with TMFB and in view of overall weak financials, taking clean exposure of Rs100 million as recommended by FI, Operations Group has been considered as high risk.
The three bank officials did not sign the loan approval document. On the other hand, Credit Approval Memorandum, a confidential document of
the bank, signed by the other three officials, Mohammad Nadeem, SVP, Head of Financial Institutions and Management Division; Dr Asif A. Brohi SEVP Group Chief Operations, and Tariq Abdullah, Relationship
Manager, favouring the loan says: "CEO of the subject bank has requested NBP for local currency line i.e. clean placement. We have visited the office of TMFB located on Share-i-Faysal. We found TMFB had sound ownership structure, qualified and experienced management. Their
present request was for Rs300 million call line. But after evaluating their financial standing we found that Rs300 million was too much. We therefore convinced them to put the request for Rs100 million for which they agreed.
As desired by State Bank of Pakistan, that large commercial banks cannot do such business, we therefore suggest to support micro-finance banks in providing easy funding facility to them."
Nadeem Hussain, a career banker having spent 27 years with Citi group, is president and chief executive officer of the bank. He got the micro-finance bank licence in 2005 when Shaukat Aziz was prime minister of the country and Nadeem's spouse Sherry Rehman was on the opposition
benches. Having enjoyed long association with Shaukat Aziz as his one time subordinate, Nadeem had a big advantage in his favour, but wife Sherry was criticised on the assembly floor by the PML-Q legislator Kashmala Tariq for getting a favour in exchange for her silence over
the Steel Mills scandal.
Sherry had forcefully denied the charge then and stated that since Nadeem was a career banker having known and
worked with Shaukat Aziz, so it was a purely business thing and nothing to do with politics.
NBP Chief Ali Raza seems convinced that support to such micro-finance banks was a social service. The bank says it is an institution established for the purpose of serving the economically active poor with limited access to financial sector. But the ultimate sufferer in these cases, as seen in the past, seems the public money and that too at the hands of public representatives.
Sources say the National Bank of Pakistan (NBP) President Ali Raza was made to approve the loan for the micro-finance bank, as he feared the high profile PPP minister might turn against him in case he declined.
But the NBP chief says there was no arm-twisting and the loan was sanctioned on merit.
Talking to this scribe, Mr Raza said as NBP did not do
business at micro-level so it decided to extend facilities to the micro-finance bank. He opined that the TMFB had a sound financial base and a reputed telecom company was also investing in it. When asked about the dissenting note of the top executives, he claimed that they had prepared the report keeping in mind a normal bank, but the micro-finance bank earns profits after a long span of investment.
Information Minister Sherry Rehman, when contacted, strongly refuted to having used any kind of political pressure to secure a loan for her husband's bank. "I have no concern, no share holding, nothing to do with the bank. I even don't know if they had applied for the loan or
not. I think some political opponents of mine are trying to propagate this non-issue," she categorically said.
She said she had never contacted Ali Raza, the NBP president, though she knew him well socially. "I have not used my influence in any way in the financial matters of my husband," she added.
Mr Nadeem Hussain, when contacted, said he had secured this facility from National Bank and had repaid it. He denied having used the political clout of her spouse. "Our bank is A-rated. We have secured this facility from two more banks. The financial health of our institution is very good. This is a normal procedure to get such facilities from other banks, nothing wrong with this," said the TMFB president.
While the NBP chief easily hinted that his team responsible for approval of such a critical loaning facility to the other institutions did not have these aspects in mind, the dissenting note by three top executives, obtained by The News was signed by Shahid Anwar Khan, SEVP, Group Chief Credit Management of the bank; Wahajat A. Baqai, SVP, CMG; and Arshad Zia, AVP, CMG.
It reads: "The Tameer Finance Bank Limited (TMFB) started its operations in August 2005. Since the start of its operations, the TMFB is in continuous losses. In 2007,
the loss after tax is increased to Rs228 million compared to loss of Rs50 million in 2006. Because of the losses, the equity of TMFB has subsequently reduced to Rs335 million in 2007 from Rs551 million in financial year 2006.
The loss of Rs44 million in first quarter of 2008 further deteriorated the equity base. The rating of the bank is
another concern. As per JCR VIS the outlook for TMFB is negative. Since NBP presently has no relationship with TMFB and in view of overall weak financials, taking clean exposure of Rs100 million as recommended by FI, Operations Group has been considered as high risk.
The three bank officials did not sign the loan approval document. On the other hand, Credit Approval Memorandum, a confidential document of
the bank, signed by the other three officials, Mohammad Nadeem, SVP, Head of Financial Institutions and Management Division; Dr Asif A. Brohi SEVP Group Chief Operations, and Tariq Abdullah, Relationship
Manager, favouring the loan says: "CEO of the subject bank has requested NBP for local currency line i.e. clean placement. We have visited the office of TMFB located on Share-i-Faysal. We found TMFB had sound ownership structure, qualified and experienced management. Their
present request was for Rs300 million call line. But after evaluating their financial standing we found that Rs300 million was too much. We therefore convinced them to put the request for Rs100 million for which they agreed.
As desired by State Bank of Pakistan, that large commercial banks cannot do such business, we therefore suggest to support micro-finance banks in providing easy funding facility to them."
Nadeem Hussain, a career banker having spent 27 years with Citi group, is president and chief executive officer of the bank. He got the micro-finance bank licence in 2005 when Shaukat Aziz was prime minister of the country and Nadeem's spouse Sherry Rehman was on the opposition
benches. Having enjoyed long association with Shaukat Aziz as his one time subordinate, Nadeem had a big advantage in his favour, but wife Sherry was criticised on the assembly floor by the PML-Q legislator Kashmala Tariq for getting a favour in exchange for her silence over
the Steel Mills scandal.
Sherry had forcefully denied the charge then and stated that since Nadeem was a career banker having known and
worked with Shaukat Aziz, so it was a purely business thing and nothing to do with politics.
NBP Chief Ali Raza seems convinced that support to such micro-finance banks was a social service. The bank says it is an institution established for the purpose of serving the economically active poor with limited access to financial sector. But the ultimate sufferer in these cases, as seen in the past, seems the public money and that too at the hands of public representatives.
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N A D E E M M A L I K
Director Programme
AAJ TV
ISLAMABAD
00-92-321-5117511
nadeem.malik@hotmail.com
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