KARACHI: The Supreme Court of Pakistan on Saturday stopped the merger of Sindh Bank and Summit Bank till further orders and issued notices to the Advocate General Sindh and governor State Bank of Pakistan (SBP) for the next hearing.
The bench headed by Chief Justice of Pakistan Justice Mian Saqib Nisar, on a suo moto action against this merger, directed the Advocate General Sindh and Governor State Bank of Pakistan to provide all details of the accounts of Sindh Bank and Summit Bank.
The court issued the stay-order on the merger of these two banks and adjourned the hearing till next date.
The proposed merger of Summit Bank into Summit Bank faces a setback, after Supreme Court’s suo moto intervention over irregularities .
According to a note from the Supreme Court Registrar office, which forms the crux of the suo moto stated Summit bank was formed via the amalgamation of Atlas Bank, Arif Habib Bank and My Bank and according to regulations of the central bank, it is compulsory for all banks to have a paid-up capital of Rs10 billion.
The apex court has directed a detailed report to be prepared regarding the merger of these two banks and the progress made in this transaction.
The note also said, “Summit Bank has failed to comply with such requirement for years and on the contrary the capital has been raised fraudulently by misusing depositors’ money against shell companies and fake grower loans through sugar mills and power project in Nooriabad, Sindh.”
The following shell companies have been recognized for having obtained loans without adhering to banking laws which are Golden Globe, Alpha Zulu, Parthenon alongside sugar mills owned by Omni Group.
Also, the registrar note highlighted that Sindh bank was a government owned entity and its merger or takeover of a loss incurring entity would cause a loss to the
