ISLAMABAD: The National Bank of Pakistan (NBP) board has approved Rs90.6 million in salary and end-service benefits for a former bank president, nearly half of it for the period he never served – an act defended by the board and the ex-president.
The decision brings to the limelight the January 2011 judgment of the Supreme Court, which declared the appointment of former president Syed Ali Raza unlawful and unconstitutional.
Headed by Muneer Kamal, the board of directors in April and December 2014 took the decisions of paying end-service benefits and salary for the remaining five and a half months of service contract, four years after Raza was removed from the post following the court’s verdict.
Not only that, the board also approved payment of interest on delayed salary until March 30, 2015 – four years and two months.
Raza will get Rs16.1 million in salary for the period he never served and another Rs5.2 million in interest on delayed payment of salary, according to documents. On this account, he has earned a total of Rs21.3 million.
Furthermore, the board approved Rs13.9 million in gratuity for 11 years of service and another Rs6.9 million in interest for the period January 2011 to March 2015.
The ex-president will also get Rs37.3 million in provident fund and another Rs11.2 million in interest for January 2011 to March 2015. He has already received Rs20.4 million in provident fund, leaving a balance of Rs70.2 million in total financial benefits.
Raza will receive a total of Rs90.6 million, of which Rs39.4 million or 44% is for the period he was not the bank president, showed documents.
An annual general meeting (AGM) of bank shareholders, called for getting its approval for the board’s decision, was held on Monday. However, because of serious objections raised by the shareholders, the NBP management withdrew the proposal from the AGM’s agenda, said a shareholder after the meeting.
Terming the board’s move unlawful, a shareholder has already approached the Supreme Court, pleading it to hold the incumbent bank president, management and the board responsible for contempt of court.
The Banks (Nationalisation) Act of 1974 allows the federal government to reappoint the president for another term of three years in consultation with the State Bank of Pakistan.
Raza was first appointed president in 2000 and then in July 2003. He was again appointed for one year in 2009 and then for another year in 2010. His appointment was struck down by the court in January 2011.
The NBP board cleared the five-and-a-half-month pay only after seeking legal opinion from two firms – Liaquat Merchant Associates and Mandviwalla and Zafar law firm, said Ali Raza.
He said the legal firms were of the view that the court did not terminate the contract due to the fault of former president rather it was the fault of appointing authority.
On the issue of gratuity and provident fund, Raza said the board only enforced the AGM’s decision taken in 2001. The AGM had declared that the benefits of the NBP president would be in line with those of the Habib Bank president.
Raza stressed that he would not give up interest payment as it would weaken his case.
A top official of the NBP board confirmed that the board had approved financial benefits including the salary for five and a half months after the termination of Raza’s contract, saying there was nothing wrong in it.
Another board official claimed that the court did not object to the appointment instead the objection was over the manner Raza was reappointed.