PAKISTAN: UBL sale in doubt as embezzlement revealed

24 May 1996

Police announced on 14 May that 10 senior employees at United Bank (UBL), including a member of parliament, have been detained.

More than 20 others are being sought in connection with the alleged embezzlement of funds from the bank. The governor of the State Bank of Pakistan (SPB - central bank), Mohammed Yacub, said that Rs 680 million800 million ($10.9 million-23.0 million) has been misappropriated.

In April, the SPB intervened and replaced UBL's board. The new management was instructed to ensure more prudent lending and to reduce administrative costs.

In February, the government agreed to sell a 26 per cent stake in UBL to Saudi Bisharahil. However, before the news of the alleged embezzlement, market sources said that the sale was unlikely to proceed. A legal challenge to the sale of the bank to a foreign investor has been mounted and the Bank of England has also expressed concern about UBL complying with its legal obligations (MEED 3 :5: 96)

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