Mehran Bank scandal

Mehran bank scandal also known as Mehrangate was a major political scandal in Pakistan between 1990-1994 in which senior politicians and political parties were found to have been bribed by military and intelligence officers to prevent the re-election and destablise the government of the Pakistan Peoples Party (PPP).
Initiated by Chief of Army Staff Mirza Aslam Beg with the alleged support of President Ghulam Ishaq Khan payments of up to 140 million Rupees were done by the Inter-Services Intelligence (ISI) Chief Asad Durrani and Javed Nasir via the owner of Mehran Bank Yunus Habib. Intelligence funds were deposited in Mehran bank in 1992 propping up what was an insolvent bank as a favour for its owners help in loaning money to the Inter-Services Intelligence in 1990 that was used in the creation of the right wing alliance Islami Jamhoori-Ittehad and bankrolling the campaigns of many opponents of the PPP.
The scandal subsequently broke after the new ISI Chief Lt. Gen Javed Ashraf Qazi decided to transfer the intelligence fund back to state owned banks as per official rules. Mehran Bank was unable to return the money due to its poor financial state and collapsed. It was later discovered that large sums had been siphoned of to 39 fictitious parties.
In 1995, Mehran Bank was amalgamated with the National Bank of Pakistan and in 1996 the NBP had to make full provision for Mehran's liabilities which resulted in a net loss that year to the bank of Rs 1.260 billion.

On April 20, 1994, giving details about the payments made by Mr Habib to generals, politicians and political parties, the then Interior Minister, Naseerullah Babar, told the National Assembly that the main beneficiary of his largesse was former army chief General Mirza Aslam Beg who received Rs140 million.
Key politicians named as recipients of ISI funds included Jam Sadiq Ali (Rs70 million from Habib Bank and Rs150 million from Mehran Bank), Journalist Altaf Hussein Qureshi (Rs.20 million); Yousuf Memon for Ijaz-ul Haq and Javed Hashmi (Rs.50 million); Nawaz Sharif (Rs6 million); former Sindh chief minister Muzaffar Hussain Shah through his secretary (Rs13 million), MQM Haqiqi (Rs5 million), former Sports Minister Ajmal Khan (Rs1.4 million), Jam Mashooq Ali (Rs3.5 million), Liaqat Jatoi (Rs1 million), Dost Mohammad Faizi (Rs1 million), and Jam Haider (Rs 2 million).
Yunus Habib was arrested on April 7, 1994 for misappropriation in the sale proceeds of the Dollar Bearer Certificates. On Dec 14, 1995, Younus Habib was convicted of fraud and embezzlement and given a sentence of 10 years rigorous imprisonment by the Special Court for Offences in Banks in Sindh.

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