Plea against auction of Ittefaq Group’s four units dismissed

LAHORE: A division bench of the Lahore High Court on Monday dismissed an intra-court appeal challenging an order allowing auction of four units of Ittefaq Group to return the loan of about Rs 3 billion to creditor banks, taken by the Sharifs.
The bench comprising Justice Ayesha A Malik and Justice Shehzada Mazhar dismissed the appeal of the prime minister’s cousin Mian Ilyas Meraj by holding that the appellant remained unable to produce evidence as a shareholder in the affairs of the Ittefaq Group. 
The proceedings were initiated as a consortium of banks for winding up three units of Ittefaq Group in order to recover from the PML-N leaders different loans, now amounting to over Rs 3 billion. 
The petitioners, including the National Bank of Pakistan, Habib Bank Ltd, United Bank Ltd, Zarai Taraqiati Bank of Pakistan, Muslim Commercial Bank, PICIC Bank, First Punjab Modaraba and the Corporate Law Authority had moved the petition in 1998.
Eight banks had sanctioned a collective loan of Rs 3.11 billion to the Ittefaq Group of Industries between 1982 and 1998. In most of the cases, the loan was not paid back and the banks added mark-up charges to the actual credit.
The petitioners had requested to order for the recovery of their loan through auction of Ittefaq Foundries, Ittefaq Textile Mills and Khalid Siraj Industries, as they had failed to fulfil their financial commitments made against the loan given to them. The four units, including Ittefaq Foundries, Ittefaq Brothers and Brother Steel Mills, were handed over by the Sharif family to the petitioner banks to adjust the loan amount, but the banks had rejected and demanded payment in cash.
A single bench had accepted this petition and ordered for auction of these units surrendered by Prime Minister Nawaz Sharif’s family against the bank liabilities for adjustment of loan. The decision was challenged by Mian Meraj Din, a shareholder in the Ittefaq Group, on the ground that the auction of the said units was in violation of Section 284 of the Companies Ordinance.

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