Ittefaq Foundries, commonly known as Ittefaq Group, was a Pakistani integrated steel producer headquartered in Lahore. It was founded in 1951 by Sharif family. At its peak, it was a manufacturer of diesel engines up to 200 hp, lathes, road rollers, agricultural equipment, and electric fans.[4]
| Company type | Steel and Metallurgy |
|---|---|
| Industry | Material science and Metallurgical Engineering |
| Genre | Commercial Public |
| Founded | 1939[1] |
| Founder | Mian Barkat Ali Muhammad Sharif Mian Muhammad Siraj Mian Muhammad Bashir Mian Abdul Aziz Mian Muhammad Shafi Mian Meraj Din[2] |
| Defunct | 2004[3] |
| Fate | Acquired by Al-Rehmat Group of Companies of Faisalabad in 2004[3] |
| Successor | Al-Rehmat Group of Companies |
| Headquarters | , Pakistan |
Key people | Mian Muhammad Sharif Chairman |
| Products | Hot rolled steel Products Billets Cold rolled steel Products Galvanised steel Products Electronic materials |
| Services | Production of Iron and Steel |
Its steel division was sold to Al-Rehmat Group of Companies in 2004.[1][3]
History
editIt was founded by seven brothers in 1939 as a small foundry.[3] Among the founders, the major contributions were made by the brothers Mian Barkat Ali and Muhammad Sharif. It was setup with a total investment estimated at Rs. 15 million.[4] The word Ittefaq in some context means Unity in English language (implying unity among 7 founding brothers).[1][2]
The father of Muhammad Nawaz Sharif (former Prime Minister), initially set up an iron-melting furnace in, Lahore and quickly expanded this business in the early years of Pakistan.[2]
Upto 1960, the company expanded internationally. During 1965, they were the largest importers of steel in South Asia Region. By 1971, it was Pakistan's largest steel industry starting to make presence in steel industry in Pakistan.[5] In 1972, Prime Minister Zulfikar Ali Bhutto nationalized the steel industry, including the Ittefaq family business empire, as it was the biggest profit making industry for Pakistan 3— Ittefaq Group.[5]
After nationalising this industry, its earnings were deadly dropped but despite all the efforts by Ittefaq Family it was not privatised due to various political issues.
In 1978, General Mohammad Zia ul-Haq returned the business after developing political links with the Sharifs. In 1983, Zia ul-Haq appointed Nawaz Sharif as finance minister in the Punjab provincial cabinet. Then after the Pakistani general election, 1988, Nawaz Sharif formed and headed the provincial government in Punjab. In November 1990, Nawaz Sharif became the Prime Minister of Pakistan for the first time.[2]
In 2004, the Ittefaq Group steel division was acquired by Al-Rehmat Group of Companies of Faisalabad for Rs. 2.159 billion.[3] The sell-out was called by the Lahore High Court to pay up the loan which Ittefaq Group steel division had taken between 1982 and 1988.[3]
Upon the plea of family of Mian Mehraj Din (one of the seven brothers who set up Ittefaq Group and founder of Haseeb Waqas Group of Companies [6]) that the evaluation of assets is wrong Ittefaq Foundry was finally sold out to Al-Rehmat Group for Rs. 6 billion.[7]
Loan defaults
editIttefaq Foundries opened a credit account with the National Bank of Pakistan's Wapda House branch in Lahore in August 1979, initially obtaining a facility of Rs 17.5 million.[8] Following Mian Nawaz Sharif's appointment as Finance Minister of Punjab by Muhammad Zia-ul-Haq, the credit limit increased to Rs 30 million and further expanded to Rs 200 million when Sharif became the provincial chief minister.[8] Despite accruing no markup payments until 1988-89, the credit facility was subsequently raised to Rs 288.177 million.[8]
In November 1991, the foundry secured increase by mortgaging assets valued at Rs 359.88 million. However, the company defaulted on payments, leading the credit amount to escalate to Rs 574.673 million by the mid-1990s.[8]
In June 1993, Ittefaq Foundries utilized a letter of credit for Rs 310 million to import shredded steel scrap from the U.S., paying only five percent of its value.[8]
Ittefaq Foundries reference case
editOn February 14, 2000, the National Accountability Bureau (NAB) filed a reference against the owners of Ittefaq Foundries, including Mian Muhammad Sharif, Nawaz Sharif, and Shahbaz Sharif, for failing to repay a loan of PKR 1.06 billion owed to the National Bank of Pakistan (NBP).[9][10] This followed a complaint lodged on December 10, 1999, by the bank's zonal chief and manager at Wapda House, stating that the company had defaulted on payments since 1994.[9] Despite Nawaz Sharif's 1998 pledge to liquidate assets to settle his family's debts, a significant liability remained.[9] Following the military coup in 1999, Nawaz Sharif was exiled, complicating recovery efforts.[9] NAB arrested Mukhtar Hussain, a director of Ittefaq Foundries and a named guarantor for the loan.[9] His arrest was contested in the LHC, which eventually ordered his release—a decision later challenged by NAB in the Supreme Court of Pakistan.[9]
In 2012, NAB informed the Lahore High Court (LHC) that the Sharif family had defaulted on loans totaling Rs 3.8 billion.[11] By December 2011, the family's outstanding debts included Rs 2.31 billion owed to the NBP, Rs 336 million to Habib Bank Limited, Rs 343 million to United Bank Limited, Rs 456.1 million to Muslim Commercial Bank, Rs 202 million to First Punjab Modaraba, Rs 95 million to Bank of Punjab, Rs 60 million to Zarai Taraqiati Bank Limited (ZTBL), Rs 27 million to NIB Bank (formerly PICIC), and Rs 8 million to the International Commercial Bank of Pakistan (ICBP).[11]
In November 2014, after 15 years, the Supreme Court revisited the case. During the proceedings, NAB's counsel argued that the LHC's ruling hindered ongoing corruption investigations and pushed for its reversal, citing legal precedents that supported cases against guarantors of defaulted loans.[9]
In May 2015, Judge Sohail Nasir of the Accountability Court in Rawalpindi acquitted Nawaz Sharif, Shehbaz Sharif, and other family members in the Ittefaq Foundries case.[12] The court dismissed the National Accountability Bureau's plea to reopen the investigation, citing that the matter had been resolved with the National Bank of Pakistan.[12] The judge noted that the allegations against the foundry appeared to be politically motivated and confirmed that there were no outstanding disputes between the Sharif family and the bank.[12]
References
edit- ^ a b c Global Security. "Profile of Sharif Family". globalsecurity.org website. Retrieved 30 July 2017.
- ^ a b c d Pike, John (3 January 2018). "Detailed Profile of Sharif Family". GlobalSecurity.org website. Retrieved 8 January 2018.
- ^ a b c d e f "Notices to Ittefaq Group owners: Sale of steel units to clear debt". Dawn (newspaper). 23 July 2004. Retrieved 8 January 2018.
- ^ a b "Ittefaq Foundry history" (PDF).
- ^ a b Baker, Raymond (2005). Capitalism's Achilles heel: Dirty Money and How to Renew the Free-market System. John Wiley and Sons (GoogleBooks). pp. 82–83. ISBN 978-0-471-64488-0. Retrieved 30 July 2017.
nawaz sharif ittefaq.
- ^ "Welcome to Haseeb Waqas Group". www.hwgc.com.pk.
- ^ "Adjusting loan: Al-Rehmat to buy Ittefaq subsidiaries". 27 May 2014.
- ^ a b c d e "Plants surrendered by Sharif family disposed of". DAWN.COM. 15 July 2004.
- ^ a b c d e f g Malik, Hasnaat (10 November 2014). "Ittefaq foundries case: SC reserves judgment over release of 'guarantor'". The Express Tribune.
- ^ https://www.nytimes.com/1999/11/15/world/pakistan-lists-loan-defaulters-including-kin-of-ousted-premier.html
- ^ a b Reporter, A. (9 October 2012). "Sharif family defaulted on Rs3.8bn loan". DAWN.COM.
- ^ a b c "Sharifs acquitted in Ittefaq Foundries loan case". The News International.