A recent audit by the Auditor General of Pakistan has identified major procedural and financial irregularities in the National Bank of Pakistan’s divestment of its 45 percent stake in United National Bank Limited (UNBL) in the United Kingdom. The report alleges that the sale to Bestway Group was carried out in a non-transparent manner, at a price significantly below market valuation, and in violation of mandatory regulatory and procedural requirements.
The audit findings indicate that NBP sold its profitable foreign subsidiary for GBP 22.9 million, equivalent to approximately Rs. 8.2 billion. This sale value is not aligned with the bank’s book valuation of GBP 30 million, nor with the estimated market valuation of GBP 35 million. According to the report, the undervaluation may have resulted in a measurable financial loss to the bank, raising concerns over stewardship of public-sector financial assets.
The AGP report further outlines that NBP appointed a valuator and a law firm to oversee the transaction without transparent competitive bidding. Rule 20 of the Public Procurement Rules, 2004, mandates that public entities follow competitive processes to ensure fairness, transparency, and safeguarding of public interest. In this instance, auditors concluded that the required competitive procurement process was not followed.
The valuation submitted by the appointed advisor reportedly placed UNBL’s worth at GBP 25 million, a figure described in the audit as artificially suppressed. This valuation level, when approved, enabled the buyer to secure the asset at a significantly discounted rate. The NBP Board authorized the transaction at an urgent meeting held on December 21, 2023, only two weeks after receiving the acquisition offer on December 7. The timeline prompted auditors to raise concerns about the adequacy of due diligence and review procedures prior to final approval.
Further scrutiny centered on compliance with State Bank of Pakistan directives. The central bank issued a No Objection Certificate for the sale in March 2024, conditional upon repatriation of the proceeds to Pakistan and submission of a Proceeds Realization Certificate. Contrary to this directive, audit findings show that funds were transferred by Bestway Group to NBP’s Bahrain branch in July 2024, where they remained rather than being brought into Pakistan. NBP later sought permission to retain the funds abroad for operational needs, including closure costs for its New York branch. Auditors deemed the action unauthorized and inconsistent with the SBP’s conditions.
The report also observes that NBP proceeded with the sale without formally involving the Ministry of Finance, despite being a public-sector entity under its administrative oversight. The lack of consultation, combined with the absence of competitive bidding and non-compliance with repatriation instructions, prompted auditors to call the decision hasty and lacking adequate evaluation.
NBP stated that the divestment held approval from the Board and the central bank, adding that utilization of funds followed subsequent SBP guidance. Auditors rejected the explanation, emphasising that the core directive regarding repatriation remained unfulfilled. Despite repeated audit reminders across November 2024 and January 2025, the relevant Departmental Accounts Committee meeting was not convened to review the matter.
The Auditor General has recommended a full investigation into the sale process, asset valuation methodology, and treatment of proceeds, citing risks to public financial integrity and institutional reputation.
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