20000223

BEL depositors

to get back

principal

RECORDER REPORT

KARACHI: The State Bank will pay the principal amount to depositors of the Bankers Equity Limited in different phases.

The State Bank has informed the depositors of BEL that the preliminary results show that during the year-ended June 1999, BEL had incurred a loss of about Rs 4.2 billion.

The government had appointed the State Bank of Pakistan as the regulatory authority in respect of BEL to safeguard the interests of the investors through a circular issued on August 31, 1999.

BEL after privatisation failed to retain its viability and the then governor of the SBP Dr Muhammad Yaqub had held the new management responsible for the "corruption". The case against BEL's top brass is still in the court.

The State Bank feels that in view of the heavy losses suffered by BEL under the previous private management, BEL is not in a position to pay any return to its depositors.

"In view of the difficulties faced by the depositors, the State Bank in consultation with the government has decided the depositors be paid their principal amount in phases," said a press release issued by the State Bank on Tuesday.

Under the first phase, BEL will pay 30 percent of the principal amount to all such depositors whose total investment with BEL does not exceed Rs 2 million.

The BEL management will start making the payments under the first phase from March 1, 2000 and complete the process by March 10.

In future, quarterly payments will be made to the depositors on the basis of recoveries made in each quarter.

The State Bank has instructed the BEL board of directors to set monthly targets of recovery for the management, and to cut the establishment expenses to the minimum so that maximum amount is available for payment to the depositors.