The Mehrangate, also known as the Mehran bank scandal, was a major

political scandal In politics, a political scandal is an action or event regarded as morally or legally wrong and causing general public outrage. Politicians, government officials, party officials and lobbyists can be accused of various illegal, corrupt, unet ...

that took place in the first administration of

Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is ...

Benazir Bhutto Benazir Bhutto ( ur, بینظیر بُھٹو; sd, بينظير ڀُٽو; Urdu ; 21 June 1953 – 27 December 2007) was a Pakistani politician who served as the 11th and 13th prime minister of Pakistan from 1988 to 1990 and again from 1993 ...

1990 File:1990 Events Collage.png, From left, clockwise: The 1990 FIFA World Cup is played in Italy; The Human Genome Project is launched; Voyager I takes the famous Pale Blue Dot image- speaking on the fragility of Humankind, humanity on Earth, Astroph ...

. The active-duty army officers and ISI agents engaged in conspiring against the election campaign of

by having it oversaw the campaign funding of taxpayers' money to the Islamic Democratic Alliance (IDA) under

Nawaz Sharif Mian Muhammad Nawaz Sharif (Urdu, Punjabi: ; born 25 December 1949) is a Pakistani businessman and politician who has served as the Prime Minister of Pakistan for three non-consecutive terms. He is the longest-serving prime minister of Pak ...

during the nationwide elections held in

. From the official accounts of the

Ministry of Defence {{unsourced, date=February 2021 A ministry of defence or defense (see spelling differences), also known as a department of defence or defense, is an often-used name for the part of a government responsible for matters of defence, found in state ...

(MoD), the taxpayers funding was directed and transfer to the conservative politicians to compete with the

Pakistan Peoples Party The Pakistan People's Party ( ur, , ; PPP) is a centre-left, social-democratic political party in Pakistan. It is currently the third largest party in the National Assembly and second largest in the Senate of Pakistan. The party was founded ...

, which was much organized at that time. The nature of the Sharif-Beg collusion was discovered by J. Ashraf Qazi, then- Director ISI, who wanted to move the taxpayers' funds into another account but the banks failed to meet the requests, leading the new director of opening the investigation on missing funds. With media investigation in this matter further grew, the scandal became public with

Asghar Khan Air Marshal Muhammad Asghar Khan (Retd.) ( ur, 17 January 1921 – 5 January 2018), was a Pakistani politician and an autobiographer, later a dissident serving the cause of pacifism, peace, and human rights. Born into a military family ...

filing a lawsuit at the

Supreme Court of Pakistan The Supreme Court of Pakistan ( ur, ; ''Adālat-e-Uzma Pākistān'') is the apex court in the judicial hierarchy of the Islamic Republic of Pakistan. Established in accordance to thePart VIIof the Constitution of Pakistan, it has ultimate ...

against the

IDA Ida or IDA may refer to: Astronomy *Ida Facula, a mountain on Amalthea, a moon of Jupiter *243 Ida, an asteroid * International Docking Adapter, a docking adapter for the International Space Station Computing * Intel Dynamic Acceleration, a tech ...

and the

in 1994. The case hearings and investigations went on for several years until 2012 when the

eventually found

, Aslam Beg, Asad Durrani, bankers, and other conservative politicians from the PML(N) responsible and guilty of their acts.

Background

After the exposure of the first scandal by the Intelligence Bureau (IB) in 1989,

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Ghulam Ishaq Khan Ghulam Ishaq Khan ( ur, غلام اسحاق خان; 20 January 1915 – 27 October 2006), was a Pakistani bureaucrat who served as the seventh president of Pakistan, elected in 1988 following Zia's death until his resignation in 1993. He wa ...

eventually used his constitutional reserve powers that dismissed the first administration of

, charging the Benazir's administration of

nepotism Nepotism is an advantage, privilege, or position that is granted to relatives and friends in an occupation or field. These fields may include but are not limited to, business, politics, academia, entertainment, sports, fitness, religion, and ...

, political corruption, poor economic growth, law and order, and foreign affairs, in 1990. After the

Election Commission An election commission is a body charged with overseeing the implementation of electioneering process of any country. The formal names of election commissions vary from jurisdiction to jurisdiction, and may be styled an electoral commission, a c ...

(ECP) announced the timeline schedule of nationwide general elections, the

ISI ISI or Isi may refer to: Organizations * Intercollegiate Studies Institute, a classical conservative organization focusing on college students * Ice Skating Institute, a trade association for ice rinks * Indian Standards Institute, former name of ...

methodically and systematically released taxpayer's funds to the

's conservative politicians. The authorization for the taxpayer's funds came from Lt-Gen. Asad Durrani, then- Director ISI, who enjoyed the support from

and, allegedly Gen. Beg, the army chief at that time. During this time, the monetary

embezzlement Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...

took place was reported around of the sum of ₨. 5.6 Bn (approx.

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160 million at that time), and

US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

39 million was later additionally deposited in the intelligence funds. Initiated by

Pakistan Army The Pakistan Army (, ) is the Army, land service branch of the Pakistan Armed Forces. The roots of its modern existence trace back to the British Indian Army that ceased to exist following the partition of India, Partition of British India, wh ...

Chief of Army Staff Chief of Army Staff or Chief of the Army Staff which is generally abbreviated as COAS is a title commonly used for the appointment held by the most senior staff officer or the chief commander in several nations' armies. * Chief of Army (Australia ...

General Mirza Aslam Beg with the alleged support of

, payments of up to PKR 140 million were made by the Inter-Services Intelligence (ISI) Director-General Lieutenant-General Asad Durrani 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 to its owner's for 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 The Islami Jamhoori Ittehad ( Islamic Democratic Alliance; acronym: IJI; ur, ) was a right-wing conservative alliance formed in September 1988 to oppose the democratic socialist Pakistan Peoples Party in elections that year. The alliance compri ...

(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 In banking, the term national bank carries several meanings: * a bank owned by the state * an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) * in the United States, an ordinary p ...

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. Yunus Habib was arrested on 7 April 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. On April 20, 1994, giving details about the payments made by Habib to generals, politicians and political parties, the then Interior Minister, Naseerullah Babar, told the National Assembly that the main beneficiary of his largess was former army chief General Mirza Aslam Beg who received Rs140 million.

Convictions

In March 2012,

Pakistan's Supreme Court The Supreme Court of Pakistan ( ur, ; ''Adālat-e-Uzma Pākistān'') is the apex court in the judicial hierarchy of the Islamic Republic of Pakistan. Established in accordance to thePart VIIof the Constitution of Pakistan, it has ultimate ...

summoned Younis Habib, (Mirza Aslam Beg), and Asad Durrani to testify in response to a lawsuit filed by Air Marshall Asghar Khan in 1996. On 19 October 2012, the Supreme Court tribunal found Beg and Durrani guilty of violating the Constitution for their roles in the bribery. Beg has evaded testifying before the court, arguing his constitutional rights were violated by the court's finding before he could testify.

References

{{Reflist 1990 in Pakistan 20th-century scandals Financial crimes News leaks Political history of Pakistan Political scandals in Pakistan Pakistani commissions and inquiries Trials in Pakistan Pakistan People's Party Government of Benazir Bhutto Operations of the Federal Investigation Agency Electoral fraud in Pakistan Pakistan military scandals Political corruption in Pakistan Political funding Inter-Services Intelligence operations

Background

Convictions

See also

References