AGP Flags Major Irregularities in NBP Stake Sale to Bestway Group

The Auditor General of Pakistan (AGP) has accused the National Bank of Pakistan (NBP) of major procedural and financial discrepancies in the NBP stake sale, which involved divesting 45 percent of its ownership in United National Bank Limited (UNBL), United Kingdom. According to the audit report for FY2024-25, NBP sold the profitable foreign subsidiary to the Bestway Group for £22.9 million, approximately Rs8.2 billion, an amount significantly below its book value of £30 million and estimated market value of £35 million.

The AGP warned that this undervaluation resulted in a substantial financial loss to the state-owned bank. The report further reveals that NBP appointed both the valuator and the law firm without open competitive bidding, violating Rule 20 of the Public Procurement Rules 2004, which mandates transparent competition. The valuator allegedly reduced the valuation of UNBL-linked assets to £25 million, enabling the buyer to secure the stake at an artificially low price. The NBP Board approved the sale during an emergency meeting on December 21, 2023, just days after receiving Bestway’s offer on December 7, raising questions about due diligence and the rushed approval.

While the State Bank of Pakistan (SBP) issued a No Objection Certificate on March 13, 2024, it required the bank to repatriate the sale proceeds to Pakistan and submit a Proceeds Realization Certificate. The audit discovered that the Bestway Group transferred £22.9 million to NBP’s Bahrain branch on July 4, 2024, and the amount was never brought back to Pakistan. Instead, NBP management sought permission to retain the proceeds abroad to cover costs related to closing its New York branch, a move the AGP described as unauthorized and inconsistent with SBP instructions.

Repatriation Violations and Bypassing of Ministry of Finance

Despite follow-up reminders from SBP on April 3, 2024, making repatriation a condition for final approval, the funds continued to remain overseas. The audit also criticized NBP for bypassing the Ministry of Finance, its administrative authority, during the divestment process.

The report states that the decision was taken hastily, without adequate consultation, evaluation, or adherence to transparent procedures, undermining principles of sound financial governance. In its defense, NBP maintained that the transaction was approved by both the Board and SBP and that proceeds were utilized under an SBP approval issued on July 25, 2024. Auditors rejected this explanation, stating that the fundamental issue of non-repatriation remained unresolved.

The audit further noted that despite multiple reminders on November 25, 2024, January 6, 2025, and January 13, 2025, the Departmental Accounts Committee meeting was not held to review the irregularities.

The AGP has now called for a full-scale investigation into the undervaluation, the decision-making process, and the non-repatriation of foreign proceeds, warning that such practices expose the bank to financial and reputational risks.