A UAE-based trading and investment company has filed a lawsuit worth around Rs 74 billion against the State Bank of Pakistan (SBP) and a private bank. Energy Global International FZE filed for damages against the central bank for “illegal actions” such as the suspension of bank accounts and the illegal conversion of foreign currency accounts into rupee accounts in December 2012, the Express reported. Tribune. According to the court file, a private commercial bank, BankIslami, was also cited in the lawsuit for failing to release the funds. The lawsuit has been filed with the Sindh High Court (SHC), the outlet reported.
According to court records, the CHS summoned officials from the SBP and BankIslami to appear before the additional court clerk on February 15, 2022, to respond to the claim for damages. The accounts were previously managed by the now defunct KASB Bank, but following its merger with BankIslami in May 2015, all of its assets, liabilities and accounts were transferred to it. Energy Global is a company incorporated under the laws of Sharjah, United Arab Emirates, but its investors are of Iranian origin, the outlet reported.
“SBP froze the company’s accounts without informing it”
The central bank froze the company’s accounts in December 2012, six months before the United States imposed sanctions on the company, despite Pakistani regulations failing to recognize US sanctions. According to the court record, the SBP’s actions violated the bilateral investment treaty and circulars issued to protect foreign investors. The company was never informed before the bank accounts were frozen, he added. Meanwhile, Energy Global urged the court to declare unconstitutional the central bank’s action of freezing its bank accounts and converting them to rupee accounts. He also demanded that bank accounts be released and that withheld funds released as soon as possible.
Over the past five years, the company has made an estimated profit of Rs 33.4 billion on its investment of Rs 19.6 billion. He also demanded 10.8 billion rupees in compensation for lost business opportunities over the past nine years. Another Rs 1.2 billion is wanted for losses resulting from the freezing of funds in Turkey following unfinished transactions between a Pakistani bank and a Turkish bank. This resulted in overall loss and damage of 52.9 billion rupees, the UAE-based company said, as reported by the Express Tribune.