Pakistan army’s housing ventures face corruption investigation, Jon Boone

Pakistan army’s housing ventures face corruption investigation, Jon Boone 

Brothers of ex-army chief linked to two of three DHA developments being investigated by National Accountability Bureau

Elysium Ranches, a housing development near Islamabad, was supposed to be a paradise. Spread over six sq miles of land, it would boast luxurious “farmhouses” costing up to £340,000 each, a seven-star hotel and an international-standard golf course to ensure it was “the ultimate place of happiness and tranquillity for its residents”.

Or so promised the scheme’s glossy 2009 corporate prospectus, which predicted revenues of £493m. The public would buy their slice of heaven from Pakistan’s most powerful and respected institution, the army.

But seven years on there is nothing to show for the project except furious investors who say they paid for ranches that never materialised.

A corruption investigation has looked into senior retired officers, including relatives of the army’s former chief Ashfaq Parvez Kayani, who for many years was the most powerful figure in the country.app

Also under examination are three former managers of the Defence Housing Authority (DHA), a wing of the army that builds developments to house senior retired officers and also makes enormous profits selling homes to civilians. They deny any wrongdoing.

The DHAs, which enjoy special legal privileges and operate in cities across the country, are just one part of a vast military business empire that is unique to Pakistan. It encompasses everything from banks to factories and is rarely subject to scrutiny.

According to Ayesha Siddiqa, a critic of the military’s entanglement in business, it is a recipe for corruption. “In the name of providing defence as a public good, the army is constantly furthering its own corporate interests and those of a small elite of retired senior officers,” she said.

Elysium Ranches is one of three disastrous real estate ventures by the army in recent years, all of which have involved partnerships with well-connected private companies that were supposed to pay handsomely for the privilege of using the army’s DHA brand.

The partner in the Ranches project was Elysium Holdings, a company linked to three brothers of Kayani, who served as army chief from 2007 to 2013.

So far two former senior DHA officials have been arrested, along with Waseem Aslam Butt, the former chief executive of Elysium Holdings, who claims he has been used as a scapegoat to protect Kayani’s brothers.

The 2009 prospectus plays up the military connection. Babur Kayani, one of four directors, is described as a member of “a family that has been involved in the security and armed forces of Pakistan for three generations”. A profile of Amjad Kayani’s stresses his “very close connections” to the DHA.

Amjad Kayani was questioned by the National Accountability Bureau in February. Neither he, Babur nor a third brother, Kamran, have been arrested or charged with any offence.

Kamran Kayani was also involved in a Lahore venture called DHA City, which is under investigation for not being delivered despite a reported £100m having been collected from customers.

Perhaps the most spectacular failure was one the Kayanis were not involved in, DHA Valley, a vast new suburb that was to be built adjacent to Elysium Ranches and was to offer relatively affordable housing to junior officers and less affluent civilians.

More than 150,000 customers rushed to make payments totalling a reported £400m when the scheme was announced in 2009. Seven years later almost no work has been done and much of the land that was supposed to be turned into suburbs has been earmarked for a new water reservoir.

The Guardian approached the DHA and the office of the army’s spokesman with questions about all three scandals but neither agreed to speak.

The fact that all three scandals are being investigated by the National Accountability Bureau (NAB) has been credited to Raheel Sharif, a popular general who has been army chief since November 2013.

One retired general who served under Kayani said Sharif was determined to clean up an institution he believed should be focused on defending the country and not building luxury housing.

“He is a professional soldier, not a praetorian soldier,” said the retired general. “He comes from a distinguished military family and has always been under that much extra pressure to meet those high standards.”

Scandals involving the military are often hushed up. Retired officers have even been brought back into service in order to deal with their cases through closed-door courts martial. Those found guilty are rarely imprisoned but forced to step down or stripped of some of their retirement privileges.

In April the army chief won plaudits after it was publicly revealed that six officers had been sacked for corruption. The step was widely interpreted as an attempt to set an example to Nawaz Sharif, the prime minister, who was pitched into a political crisis after his children were named in the Panama Papers leak as being linked to offshore companies.

Nawaz Sharif and the government have pointed out that none of the offshore companies were in his name, and vigorously denied any wrongdoing. His son, who owned one company, and his daughter, who was a trustee of another, have also protested their innocence.

Earlier Raheel Sharif, the army chief, had called for “across-the-board accountability” and said it would not be possible to end terrorism unless “the menace of corruption is uprooted”.

The NAB investigations into Elysium Ranches and DHA City are all the more striking because of the involvement of the Kayani brothers, who have issued public statements staunchly denying any wrongdoing. They also insist their older brother, the ex-army chief, had nothing to do with their business interests. General Kayami has made no public comment on the case.

• This article was amended on 19 August 2016 to correct the name of the Defence Housing Authority.
https://www.theguardian.com/world/2016/aug/19/pakistan-army-housing-ventures-corruption-investigation