Parliamentary panel issues warning to foreign banks for non-cooperation

Standard Chartered Bank, Citibank and Deutsche Bank were hired as financial advisors in 2015 for the issuance of $500m via dollar-denominated Eurobonds.

ISLAMABAD: Foreign banks have faced the ire of a parliamentary panel on finance for subverting its calls on an ongoing probe into a two-year old global sovereign bond issue.

The Senate Standing Committee on Finance voiced its frustration over the banks refusal to cooperate with it and issued a warning that under civil court powers available to parliament their warrants will be issued, reported a local newspaper.

This warning was issued on Wednesday to Standard Chartered Bank, Citibank and Deutsche Bank who were hired as financial advisors in 2015 for the issuance of $500m via dollar-denominated Eurobonds.

Saleem Mandviwalla, Chairman Senate Standing Committee on Finance said Citibank had apprised the panel that their representative was travelling and wasn’t available, while officials from other two banks refused to cooperate.

The panel is carrying out an investigation to identify whether the money invested in this $500m eurobond by foreigners had come from Pakistan. Existing rules don’t permit Pakistani’s to invest in dollar-denominated eurobonds.

Also, these three foreign banks have been providing commercial loans to Pakistan for supporting their balance of payments requirement.

Speaking on the occasion, Senator Mohsin Leghari said these foreign banks weren’t aware that parliamentary panels had civil court powers available at their disposal and which could be used to summon anybody.

An industry expert cautioned that any action initiated against these foreign banks could jeopardize matters and may force them to end their Pakistan operations.

An ex-finance secretary said 14pc investment came from Pakistani banks in this $500m eurobond. But Senator Mohsin Aziz of PTI remarked that unwillingness of these banks to appear before the committee was deepening their concern.

Noor Ahmad, Additional Secretary External Finance requested the panel to show some relaxation in this regard, as any negative publicity could cause problems for the government. He added that after a meeting between finance secretary and finance minister, it had been decided that cooperation would be ensured with the parliamentary panel.

But Mandviwalla remarked that according to his information, the finance ministry had instructed the bank from not coming before the panel.

On the contrary, Ahmad said officials of these foreign banks had been requested to appear before the panel.

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