How Mehran Bank was issued a licence by the State Bank

DUBAI: How did the Mehran Bank come into being and how power-drunk politicians misused their power is a mystery which has not been revealed in detail so far but has acquired immense relevance at a time when all secrets are being revealed by key players, like peels of an onion.
While today Mehran Bank chief Yunus Habib is confessing his crimes, seeking forgiveness from God and all others, blaming everyone, I have been witness to a sordid episode which occurred in March of 1991 at the official residence of Jam Sadiq Ali, the then chief minister of Sindh who had been installed after Benazir Bhutto’s first government was ousted in August 1990 and Asif Ali Zardari was jailed in Landhi by Jam Sadiq Ali.
In this episode I am going to reveal, senior journalist and anchor Nusrat Javeed, late Azhar Sohail and a couple of then junior reporters Faraz Hashmi, now with BBC and Shakeel Shaikh, now chief reporter of The News in Islamabad, were also present or around, as part of a delegation of journalists which Jam Sadiq Ali had invited to Sindh from Islamabad.
How many of our colleagues remember this episode is not clear but I have vivid memory. Our delegation was the first to force Jam Sadiq Ali to allow us to see Asif Ali Zardari, for the first time, in Landhi jail in the gruelling hot weather of March. Current senior politician Imtiaz Sheikh of PML-Functional was then the personal secretary of Jam Sadiq Ali and was always available at his home till late at night.
During our one-week tour of Sindh, we were at Jam Sadiq’s residence in Karachi and enjoying a good spirited evening helped adequately by the then Sindh Information Secretary Salim Gul Sheikh. One quiet man was sitting in the corner with a mobile phone and did not speak a word for hours. Suddenly Jam Sadiq Ali asked him what was going on and then he opened up.
He was Mr Yunus Habib. He told Jam Sadiq Ali his application for a license of Mehran Bank was not being approved by the State Bank of Pakistan, at that time led by Imtiaz Alam Hanafi as Governor.
Why it has not been approved, Jam asked. “I don’t know Sir, but Hanafi Sb is the problem,” he said.
Jam Sadiq Ali, who has now been accused by Yunus Habib of receiving Rs150 million for helping the Mehran Bank, asked his PS to get him Governor Hanafi on the phone. It was about 11 pm or so at night.
Within minutes the PS said he could not get through to Mr Hanafi as probably he had gone to bed. Jam Sadiq asked his PS to call his No 2, an adviser of the State Bank. The line went through and Jam Sadiq told the Adviser in front of all of us. “Listen you fool, tell your stupid Governor who is sleeping, that I, Jam Sadiq Ali is calling. Tell him to do the job of Mehran Bank now as I have said so many times. Otherwise also tell him that we know when his son goes out of home and where he goes and when he returns.”
This short call was a direct threat from Jam Sadiq Ali, who was considered a mafia Don, a tyrant and everyone was scared of his ruthlessness at that time. We were amused at the way he handled the issue.
The next day our delegation had to visit the State Bank and we saw the room of that adviser and some of us gate crashed. We asked him what had Jam Sadiq Ali told him last night about Mehran Bank. The Adviser was so scared and nervous that he virtually threw out everybody from his room and wanted us to tell him how we knew about the call. He then begged that his name may not be given as he would be punished by Jam Sadiq Ali.
We forgot about the incident as Mehran Bank had not been born then and we were dealing with larger issues of interviewing Asif Ali Zardari in Landhi jail, for the first time. We returned after a week and I wrote a series of 7 columns in a week, blasting Jam Sadiq Ali and his administration. It was also for the first time that anyone had visited the mother of Asif Ali Zardari near the Avari Hotel home and saw the miserable plight she was living in with Muzaffar Tuppee, the stepson.
A few months later, probably in late August or September 1991, we heard that the Hamid Hanafi, the son of the State Bank Governor Imtiaz Alam Hanafi had been kidnapped in Karachi while he was going to his office or returning home. It was big news. The boy remained a hostage for a few weeks and was then released quietly.
Shortly afterwards we also learnt that the State Bank had issued the license of the Mehran Bank to Yunus Habib and formally the bank was launched in early 1992. Then started all the political wheeling and dealing.
A key player of Mehran Bank at the time, who now resides in Dubai, confirmed to me on Friday that not just Rs150 million were paid to Jam Sadiq Ali for Mehran Bank but a big house in Karachi was also given to him by Yunus Habib.
This Mehran Bank insider also confirmed that the kidnapping of the son of the State Bank Governor was also linked to the bank licence.
With such criminal beginnings it is not surprising that Mehran Bank became a key player in politics of deceit, fraud and criminal dealings to make or break political and popular governments. And it was the best tool for non-political players to use against friends and enemies alike.