Mehran bank scandal
Initiated by Pakistan Army's Chief of Army Staff General Mirza Aslam Beg with the alleged support of President Ghulam Ishaq Khan payments of up to 140 million PkR were made by the Inter-Services Intelligence (ISI) Director-General Lieutenant-General Asad Durrani and Corps of Engineers Engineer-in-Chief Lieutenant-General 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 favor for its owner's 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 (IJI) and bankrolling the campaigns of many opponents of the PPP.
The scandal subsequently broke after the new ISI Director-General Lieutenant-General 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 off to 39 fictitious parties.
In 1995, Mehran Bank was amalgamated with the National Bank 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.[1]
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
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
