Why Bank of Khyber MD got the sack?

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PESHAWAR: The Khyber Pakhtunkhwa government has removed the Bank of Khyber managing director without following the due process.

Saiful Islam was removed after serving 10 months by issuing just an explanation letter. One of the allegations leveled against him was that he had provided sensitive information to media illegally and unofficially with a mala fide intention to damage the reputation of the bank.

It was stated that the MD had met a “hostile reporter” and he published a “negative” story based on secret information. The board had told the MD several times to write a letter to the chief editor of the newspaper, which he never wrote even after several reminders”.

The story, based on an audit report of the bank on April, 18, 2019, reported the Bank of Khyber was facing a financial crunch and its performance was disappointing in 2018. There was a 9pc reduction in the bank’s assets and a 7pc raise in its expenditures. In 2018, the bank earned a meager Rs 466 million profit and Rs 0.46 per share profit was announced. However, the bank refused to pay the annual profit to shareholders and included Rs 466 million in its equity.

Saiful Islam told this correspondent that the entire process was biased, unlawful and made with predetermined intentions and vague allegations.

“Due process was not adopted and opportunity of hearing was not provided. The entire process has been hurriedly concluded which speaks volumes about justice hurried, justice denied,” he said.

Sources closed to the MD told this scribe that he had been terminated because he was cooperating with the National Accountability Bureau and State Bank of Pakistan on illegal appointments, embezzlement and misappropriation in the bank in previous tenures. Saiful Islam took over the charge as BoK Managing Director on December 4, 2018 and spent almost 10 months on the post. He was served an explanation letter on September 19, 2019, and the Board of Directors (BoD) sent a recommendation to the KP government for his removal. The KP Cabinet approved it on September 26. An official told this scribe requesting anonymity that the MD had not been called for any inquiry nor a show cause notice was served on him before his removal.

He explained that under the prudential regulations for corporate/commercial banking issued by the SBP, a bank’s board of directors’ chairman has to approach the SBP two months before the premature termination of a bank’s president, chief or managing director or giving reasons for the premature termination of the contract. “If the State Bank is convinced by the board’s reasons for termination, then it gives its approval to the board and if the State Bank is not convinced, then it sends its own team for examination,” he said.

Chief Minister Mahmood Khan told this correspondent that nobody had influenced the government to remove Saiful Isalam but he was terminated on the recommendation of the board. He said if any board member was found involved in misappropriation, he would be removed.

Finance Minister Taimur Saleem Jhagra told this scribe that the provincial cabinet had approved the board of director’s recommendation and sacked the MD. He said the BoD was not satisfied with his performance and they had sent a summary to the cabinet for his removal.

“The PTI government has given autonomy to all institutions and the BoD has the power to decide their internal issues and the government acts accordingly,” the minister added.

It has been revealed that some of the bank staff had lodged complaints against his professionalism and conduct but interestingly, one of the charges framed against Saiful Islam is that he met personnel of the State Bank of Pakistan, the NAB and a “hostile newspaper reporter” and provided sensitive selective information to them illegally and unofficially with mala fide intentions which damaged the reputation of the bank. While the board had ask him several times to write a letter to the chief editor of the newspaper which published a “negative” report on April 18, 2019, but he could not send a letter despite several reminders.

Sources closed to the MD disclosed that it was alleged he had visited the NAB office and regulator without approval of the BoD and offered full support for ongoing inquires initiated by the NAB and State Bank against the bank.