------------------------------------------------------------------- DAWN WIRE SERVICE ------------------------------------------------------------------- Week Ending : 26 June 1999 Issue : 05/26 -------------------------------------------------------------------
Contents | National News | Business & Economy | Editorials & Features | Sports
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CONTENTS ===================================================================
NATIONAL NEWS + Nawaz visits forward artillery position + Peace linked to Kashmir solution, Zinni told + Pakistan, China to sign accord on fighter aircraft development + National Assembly passes Finance Bill + Balochistan PA okays Rs22,672m budget + No new taxes: Ghous presents Rs58.16 billion Sindh budget + No IMF pressure to increase power tariff: Wapda chief + G8 calls on Pakistan, India to hold talks + Supreme Court orders on FCAs: State Bank looking into legalities + Pakistan's second satellite ready for launch --------------------------------- BUSINESS & ECONOMY + CBR computerizing tax refund system + SBP asks banks to implement court orders + Germany wants to expand trade ties + Dar discusses revival of sick units + Fresh checks on inter-bank forex deals + WorldTel to invest $500m in TeleCard + 90% CED target achieved in 11 months + Many duties withdrawn, taxes lowered + Expansion of ST dept approved + KSE 100-share index declines by 12.66 points --------------------------------------- EDITORIALS & FEATURES + Arbiters of justice - 2 Ardeshir Cowasjee + A fiasco in the making Ayaz Amir ----------- SPORTS + Australia lift Cricket World Cup '99 + Hockey: Pakistan out of the next Champions Trophy + World Cup cricketers to face EB music + Shahbaz flays PHF for set-back in hockey

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NATIONAL NEWS
990625
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Nawaz visits forward artillery position
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GULTARI, Shakma Sector, June 24: Prime Minister Muhammad Nawaz 
Sharif visited an artillery position here on Thursday and announced 
Rs. 1 lakh for the artillery battery.
    
Nawaz Sharif shook hands with the soldiers manning a gun which 
could fire upto 23 kms and told them, "The nation's, mine and 
General Musharaf's prayers are with you."
    
Later, the prime minister was shown some Indian weapons recovered 
on May 19, by the Pakistan Army from the six Indian soldiers whose 
bodies were handed back to India. These included a machine gun, a 
mortar, a dagger and some other arms.
    
Earlier, the prime minister along with Chairman Joint Chiefs of 
Staff Committee and the Army Chief General Pervez Musharraf visited 
the Skardu Military Hospital to inquire about the health of the 
injured soldiers.
    
Meanwhile, the prime minister announced 10 per cent and 25 per cent 
raise in the compensatory allowance of troops serving at an 
altitude of 13,00O feet and above it, respectively.
    
This announcement was made by him while addressing troops, 14 kms 
off the Line of Control and northeast of the Kargil Sector, here 
Thursday.
    
He said the compensatory allowance of soldiers serving at the 
height of 12,000 or 13,000 feet would be increased from the present 
40 per cent to 50 per cent. But for those who were serving above 
the height of 13,000 feet, the allowance would be raised from 50 
per cent to 75 per cent.
    
Nawaz Sharif said the Skardu Hospital was also being given the 
status of combined military hospital while other facilities, 
whenever proposed by the Army Chief Pervez Musharraf, would also be 
provided there.APP

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990626
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Peace linked to Kashmir solution, Zinni told
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Ihtasham ul Haque

ISLAMABAD, June 25: Prime Minister Nawaz Sharif has told the 
visiting US General Anthony Zinni that the current crisis requires 
a balanced and constructive approach if durable peace is to prevail 
in the region.
    
According to a handout issued by the government here on Friday, the 
commander-in-chief of the US Central Command called on the Prime 
Minister Muhammad Nawaz Sharif and discussed the Jammu and Kashmir 
issue in its entirety.
    
General Zinni conveyed to the prime minister a message from 
President Clinton, underscoring the need for de-escalation of the 
current situation in Kashmir and the importance of a peaceful 
resolution of the Jammu and Kashmir dispute.
    
The prime minister regretted that for more than 50 years, the world 
had evaded resolving the Kashmir dispute in accordance with the 
United Nations resolutions. Referring to India's repeated 
violations of the LoC, the prime minister recalled Pakistan's 
proposals for strengthening the UNMOGIP and stationing of neutral 
observers on the LoC.
    
The prime minister stated that the confrontation in Kargil was 
symptomatic of the problems that had bedevilled Pakistan- India 
relations over Kashmir. He emphasised that unless a peaceful 
solution of the Jammu and Kashmir dispute was reached in the 
shortest-possible time, situations like Kargil would continue to 
erupt, threatening peace and endangering the stability of the 
region.
    
Pakistan is committed to its obligations under the Simla Agreement 
which entails mutual respect for the Line of Control pending the 
final settlement of the Jammu and Kashmir issue.
    
General Zinni undertook to convey Pakistan's point of view to 
President Clinton who, he said, was interested in promoting a 
comprehensive solution of the Kashmir dispute.
    
Meanwhile, sources close to the government said the prime minister 
had made it very clear to the US general that because Kargil was a 
part of Kashmir, any solution meant for de-escalating the situation 
at Kargil would have to take the entire Kashmir dispute into 
consideration. You cannot separate the two issues, Nawaz reportedly 
told the US general.
    
Sources said that the prime minister once again urged the US 
general to avoid taking a narrow view of the situation and said the 
US needed to resolve the issue by discussing it with both India and 
Pakistan.
    
The US general had held a detailed meeting with the Chairman Joint 
Chiefs of Staff Committee and the Chief of Army Staff (COAS) 
General Pervez Musharraf on Thursday but the two could not 
reportedly arrive at any agreement which led the US general to 
extend his visit by a day to call on the prime minister.
    
Meanwhile, it was also learnt that the armed forces had been 
ordered to be prepared to meet any challenge. They have been told, 
in the light of authentic intelligence reports, that India could 
try to cross into the Pakistani side of the Line of Control (LoC) 
if it failed to make any gains in the Kargil Sector.
    
"There is almost a red alert situation, though we still believe 
that there is no chance of the Kargil conflict leading to a full-
fledged war between the two sides," said a military source.

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990624
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Pakistan, China to sign accord on fighter aircraft development
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ISLAMABAD, June 23: Pakistan and China will formally sign four 
agreements, including the much-awaited deal to develop indigenous 
Super Seven(S-7) fighter aircraft, during Prime Minister Nawaz 
Sharif's four-day visit to China, an official source told NNI on 
Wednesday.

The source said:"The agreements will further enhance defence ties, 
besides cooperation in economic field between the two time-tested 
friends."
    
Defence Secretary Lt- Gen (retd) Iftikhar Ali Khan and other senior 
defence officials would accompany the prime minister during his 
visit to China, beginning on June 28, the source added.
    
Pakistan and China had already inked a memorandum of understanding 
(MoU) about the S-7 in 1997, which would be formally signed during 
Mr Sharif's visit, the source said and added that the S-7 project 
would meet fighter plane requirements of both the air forces as 
well as offer for sale the aircraft in the international market.
    
The source said both Pakistan and China had completed spadework of 
the project and fixed up contract details, according to which the 
latest revised timetable called for the first single-engine S-7 to 
fly in 2001. Production deliveries of the fighter would start in 
Islamabad and Beijing by 2003 and mass production in 2005, he 
added.
    
The source said Pakistan planned to share with western avionics 
partners its version of S-7 that also included weapon system for 
the fighter. PAF expected to select multimode Pulse-Doppler Radar, 
he said and added that avionics contracts were Alenia, GEC-Marconi 
and Thomson-CSF.
    
Pakistan also wanted the aircraft to be fitted with precision-
guided munitions, Raytheon A1M-9L dogfight missiles, and its first 
beyond visual range (BVR) weapon to counter India's expected 
acquisition of Vympel AA-12 Adders and, possibly, the Rafael Python 
4.
    
Foreign Minister Sartaj Aziz and Foreign Secretary Shamshad Ahmed 
jointly held a detailed meeting with the prime minister on 
Wednesday. The programme for Mr Sharif's visit to China was given a 
final shape, an official said.
    
The prime minister would also brief Chinese leaders on the security 
situation in the region in the context of heavy Indian troop 
movement along the Line of Control and the international border 
with Pakistan, the official added. NNI

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990626
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National Assembly passes Finance Bill
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Bureau Report

ISLAMABAD, June 25: National Assembly on Friday passed the Finance 
Bill for the year 1999-2000 and rejected a number of amendments to 
the Bill moved by the opposition.
    
Opposition members belonging to Awami National Party and Pakistan 
People's Party during the third reading of the Bill expressed 
serious reservations on an amendment which gives powers to the 
Federal Government to change Customs and excise duty acts through a 
notification.
    
The Constitution was a "cementing" and "binding" force of the 
Federation of Pakistan and it should not be violated or by-passed, 
ANP leader Asfandyar Wali said accusing the government of 
undermining the Constitution.
    
He said laws pertaining to money changers, Modarbas and 
constitution of Security and Exchange Commission did not come under 
the purview of the Bill and these should alsobe presented in the 
Senate, the upper house of the parliament. He called upon the 
government not to make such issues a matter of ego and preserve the 
sanctity of the two houses of the parliament.
    
Mir Hazar Khan Bijarani of the PPP (SB group) said that the 
amendment in Customs and excise duty acts, which gives powers to 
the Federal Government to delete or include anything in these laws, 
was a clear violation of the Constitution.
    
He urged upon the government not to reduce the position of 
Parliament to a rubber stamp body only.
    
Deputy Opposition Leader Syed Khurshid Shah also expressed concern 
over the amendment. He said the powers entrusted to the parliament 
by the Constitution should not be changed.
    
He lashed out at the Federal Government's decision to implement the 
Prime Minister's Housing Scheme through an officer of Ehtesab 
Bureau.
    
"They lack confidence in their own ministers," he said. The housing 
minister, who belongs to the province of Sindh has been completely 
by-passed in the implementation of this scheme, which envisages 
construction of 1,50,000 houses in the country, he added.
    
He alleged that the government wanted to extract commissions and 
kick-backs from this huge scheme and that was the reason the 
government wanted to implement the scheme through an officer of 
Ehtesab Bureau.
    
While winding up the debate on the Bill, Finance Minister Ishaq Dar 
refuted opposition's claim that the government by assuming the 
powers to amend the Customs and excise duty acts through an 
amendment was violating the Constitution.
    
He said there was no anti-dumping law in the country and the 
government required such powers to keep pace with the fast changing 
economic conditions.
    
He also rejected opposition's accusations that the government was 
by-passing the Senate. He said the present government had not 
included these things in the Bill for the first time. In previous 
budgets, he recalled, all such things were dealt as part of the 
Money Bill.

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990625
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Balochistan PA okays Rs22,672m budget
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Correspondent

QUETTA, June 24: Balochistan assembly on Thursday accorded approval 
to Rs 22,672 million budget for the fy 1999-2000.
    
Speaker Mir Abdul Jabbar presided over the session. Balochistan 
finance minister Syed Ehsan Shah presented one by one, fortythree 
demands for grants. These demands included thirtyeight for current 
expenditure and five for development expenditure during fy 99-2000.

The opposition moved ten out of total eleven cut motions, the house 
rejected these cut motions and voted for demands for grants 99- 
2000.
    
Demands for current expenditure pertained to general 
administration, provincial excise, stamps, charges on account of 
motor vehicles act, taxes and duties, pension, administration of 
justice, police, jails & convicts settlement and civil defence, 
other demands related to narcotic control, civil works, wasa, 
community centres, education, archives, health, population 
planning, manpower and labour management, exports & recreation 
facilities, social security & social welfare, natural calamities 
and disaster relief, auqaf, agriculture, land revenue, animal 
husbandry, forestry, fisheries cooperation, irrigation, rural 
development, industries, stationery printing, mineral resources, 
subsidies, loans and advances as well as state trading.
    
Eleven cut motions were tabled mostly by former chief minister 
Sardar Akhtar Mengal (PNP) and Abdur Rahim Mandokhel (PMAP). These 
cut motions were against expenditure on general administration, 
police & levies, civil works, public health services, education, 
health and state trading.
    
Remaining two other cut motions rejected by the house pertained to 
development community services and development social services, one 
cut motion on development economic services could not be moved by 
the position.
    
Besides 38 demands for current expenditure 5 other demands for 
development concerned general administration, community services 
social services economic services and law & order were also voted. 
The house later adjourned till tomorrow (Friday).

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990624
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No new taxes: Ghous presents Rs58.16 billion Sindh budget
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Sabihuddin Ghausi

KARACHI, June 23: The prime minister's adviser on Sindh, Syed Ghous 
Ali Shah, presented on Wednesday a tax-free budget with a total 
outlay of Rs58.16 billion for the year 1999-2000. It shows an 
operational deficit of over Rs4 billion on the revenue expenditure 
side and a gap of Rs1.2 billion on the development side.
    
The budget shows total revenue expenditure during 1999-2000 at 
Rs50.25 billion and a total development outlay of Rs7.91 billion.
    
The current capital expenditure at Rs4.65 billion against Rs3.40 
billion capital receipts indicating a gap of Rs1.25 billion has not 
been included in the total budget outlay.
    
The adviser estimated total revenue expenditure at Rs50.2 billion 
next year as against receipts of Rs46.17 billion showing a gap of 
Rs4.07 billion in the revenue budget.
    
With this huge gap on the revenue side, Syed Ghous Ali Shah 
committed a provincial contribution of Rs1.2 billion to finance the 
Rs4 billion annual development programme for the next fiscal year. 
For this ADP, the federal government has committed Rs2.76 billion 
loan while Rs22.50 billion is the expected Japanese grant. What the 
adviser failed to explain in his speech was as to from where Rs1.2 
billion would be made available when the budget shows a gap of over 
Rs4 billion on the revenue side and Rs1.25 billion on the current 
capital side.
    
Making this presentation before a large number of hostile 
journalists, who were literally summoned on a short notice of 
hardly a few hours to hear the budget speech in the Committee Room 
of the New Sindh Secretariat Building, the prime minister's adviser 
estimated receipt of Rs35.2 billion as Sindh's share in the federal 
divisible pool and generation of Rs10.98 billion through provincial 
taxation and non taxation revenue sources.
    
Present in the press conference were the federal state minister for 
power and water Captain Haleem Siddiqui, an adviser to the former 
governor, Dost Mohammad Faizi, and all top bureaucrats of the 
province.
    
Total development outlay in Sindh for the next fiscal year is 
Rs7.91 billion. This include the annual development programme of 
Rs4 billion, Rs3.4 billion foreign aided projects and Rs500 million 
Tameer-i-Sindh programme.
    
The projected revenue expenditure of Rs50.2 billion for next fiscal 
year, Syed Ghous Ali Shah announced showed a rise of 16 per cent 
over the revised expenditure budget of Rs43.38 billion in the 
outgoing fiscal year of 1998-99. He attributed this rise mainly to 
the additional liability of Rs3.4 billion because of the 25 and 20 
per cent raise given to the government employees.
    
"A part of this cost has been provided for in the budget estimates 
of 1999-2000" he said and announced "we will further request the 
federal government to pick up the remaining requirement."
    
His budget speech was silent on the amount of funds to be given as 
compensation to the local bodies in Sindh by the federal government 
following the abolition of octroi and export tax. He only announced 
that the provincial government had informed the federal government 
that the amounts to be transferred to local bodies must be done in 
such a way that there was no delays or bottlenecks.
    
The chief secretary informed the newsmen that local bodies 
collected Rs8.6 billion as octroi and export tax in the current 
fiscal year.
    
At the very outset of his budget speech the prime minister's 
adviser spoke of the "acute financial crunch" being faced by Sindh 
because of the shortfall in receipts from the federal government 
which, he said, continued in 1998-99.
    
He, however, did not quantify the shortfall in receipt of Sindh's 
share of the promised funds from the federal government but dropped 
a hint when he claimed that government's stringent financial 
management had led to restricting the current revenue expenditure 
in 1998-99 to 34 billion which is a "whooping Rs13 billion less" 
against the budget estimate of Rs 47.4 billion. "A part of this has 
been attained at the cost of accumulation of some liabilities," he 
said without giving any details.
    
Nonetheless, in face of this acute financial crunch, he said, the 
Sindh government had brought down its frozen debt with the State 
Bank from Rs8 billion to Rs6.9 billion till May 1999. It was 
because of regular monthly debt servicing plus the principal 
payment. He, however, did not give the present overdraft of Sindh 
with the State Bank which fluctuated between Rs1.5 to Rs1.7 billion 
every month and had led to bouncing of provincial government 
cheques in April.
    
He said the federal government had released Rs477 million in the 
current fiscal year to meet the provincial government's expenditure 
on maintenance of law and order. for this, he said, the Sindh 
government spent Rs3.4 billion during May 1992 to December 1998. Of 
this the federal government had provided Rs906 million and 
additional amount of Rs477 million were given in 1998-99. The 
federal government had committed to meet 50 per cent expenditure on 
law and order maintenance in Sindh.
    
Besides this, he said, the federal government also provided Rs219 
million matching grant to Sindh.
    
On the agriculture income tax he said the government was 
considering amendment in the present law and in mode of the 
collection. He said the government could collect only Rs200 million 
as against a target of Rs600 million. "We would be reviewing the 
performance under the agriculture income tax collection," he 
declared. He announced next year's target of Rs845 million. "It is 
by no means ambitious but by no means unachievable," he declared.
    
He said government's intention of raising the provincial revenues 
to Rs10.98 billion as against the actual collection of Rs8.6 
billion for the current year. The National Finance Commission 
projected provincial revenue for next year at Rs9.9 billion. As 
against this projection, he said, the Sindh government was going 
ahead with an ambitious collection target.
    
Syed Ghous Ali Shah also made a reference to the lingering on 
tussle between Sindh and Wapda and said that it had finally come 
before an arbitration where he hoped a fair decision.
    
Speaking of the disaster caused by recent cyclone in Sindh, he said 
Sindh expected to receive Rs800 million relief assistance from the 
federal and other provincial governments. A sum of Rs25 million was 
given from the provincial resources.
    
Spread over 8 printed pages, the adviser's speech was too brief and 
some of the figures he mentioned did not match the figures given in 
the budget documents.

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990624
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No IMF pressure to increase power tariff: Wapda chief
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Correspondent

GUJRANWALA, June 23: Wapda chairman Lt-Gen Zulfikar Ali Khan on 
Wednesday dismissed reports that Wapda was under IMF pressure to 
increase power tariff.

Addressing members of the Gujranwala Chamber of Commerce and 
Industry here, the Wapda chairman said IPPs were responsible for 
high tariff. "Of Rs 98 billion revenue, Rs 53 billion are being 
spent on purchasing power from the IPPs," he said.

The power purchased from the IPPs, he said, was 24 per cent of the 
total electricity required by the Wapda.

About the process of accountability in the authority, he said 541 
officers and 250 lower staffers had been removed on charges of 
corruption.

He assured businessmen that their problems about new electricity 
connections would be resolved.

Earlier, the chairman was warmly received by GCCI members led by 
their president, Haji Muhammad Aslam. Gujranwala Electric Power 
Company (GEPCO) chief executive Brig Mukhtar Ahmad Tariq and other 
senior Wapda officials also accompanied him.

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990621
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G8 calls on Pakistan, India to hold talks
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Shadaba Islam

COLOGNE, June 20: Leaders of the Group of Eight industrial nations 
on Sunday called on Pakistan and India to end hostilities 
immediately and resume talks.
    
In a statement, the G8 leaders, including US President Bill Clinton 
and Russian leader Boris Yeltsin, voiced "deep concern" over the 
continuing military confrontation in Kashmir, repeating their 
earlier charge that the fighting was the result of "the 
infiltration of armed intruders which violated the Line of 
Control."
    
"We are deeply concerned about the continuing military 
confrontation is Kashmir following the infiltration of armed 
intruders which violated the Line of Control in the disputed border 
region," the communique said.
    
It further said, "We regard any military action to change the 
status quo as irresponsible. We therefore call for the immediate 
end of these actions, restoration of the Line of Control and for 
the parties to work for an immediate cessation of fighting."
    
However, diplomats acknowledged that Islamabad was likely to be 
disappointed at the G8 stance.
    
"India is clearly winning the propaganda and public relations war," 
a G8 diplomat told Dawn.
    
Western nations have largely accepted India's allegations that 
Pakistan is funding armed intruders and even sending regular 
Pakistani troops into Kashmir.
    
There is little sympathy for Islamabad's arguments that the 
infiltrators are freedom fighters and that Pakistan has no control 
over their activities, diplomats say.
    
There is growing concern that the two countries, which became 
nuclear powers last year, could be heading for a full-fledged 
conflict.
    
But there was no support at the Cologne summit for Pakistan's calls 
for high-level mediation in the conflict, with Russia and most 
governments adamant that the problem must be solved in bilateral 
talks between the two sides.
    
G8 members include Britain, Canada, France, Germany, Italy, Japan, 
Russia and the United States.
    
For most of the three-day summit, G8 leaders focused on plans for 
rebuilding Kosovo and repairing damage in relations with Moscow 
caused by differences over Nato's bombing of Serbia.
    
Agreement on the status of Russian troops in Kosovo helped Russia 
and its G8 partners to set their relationship on a new course, the 
leaders said.
    
"This summit was a bridge of understanding between Russia and the 
West," British Prime Minister Tony Blair said.
    
"You cannot create and guarantee peace in Europe without Russia," 
German Chancellor Gerhard Schroeder who hosted the Cologne meeting, 
said.
    
Leaders have agreed to organize urgent financing for the 
reconstruction of Kosovo but said there will be no money for Serbia 
as long as President Slobodan Milosevic remains in charge.
    
"Thousands of people have been butchered with unbelievable 
brutality and unforgiveable barbarism," Blair said. "We cannot give 
money to such a regime."
    
Russia was promised debt relief once an agreement with the 
International Monetary Fund is in place.
    
The summit earlier approved a landmark $71 billion debt relief 
package for the world's poorest countries. Leaders did not tackle 
the thorny issue of a new director general of the World Trade 
Organization but reaffirmed their commitment to an "open trade and 
investment environment."
    
The summit also called for just and lasting peace in the Middle 
East and stressed that Palestinians must be permitted to "live as a 
free people on their own land."

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990620
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Supreme Court orders on FCAs: State Bank looking into legalities
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Mohiuddin Aazim

KARACHI, June 19: The State Bank has started eliciting legal 
opinion to interpret the Supreme Court orders in case of frozen 
foreign currency accounts (FCAs) before issuing instructions to the 
banks on how to implement them.
    
Sources close to SBP said SBP high-ups had got in touch with senior 
lawyers to be able to interpret the orders in their true spirit.
    
"There are certain things to be clarified before the SBP gets down 
to implementing the orders," one of the sources told Dawn. He said 
it was not clear whether SBP would approach the Supreme Court for 
such clarifications or rely on its legal consultants.
    
He said it was also not known whether SBP would wait for the full 
orders of the court before implementation of its directives or 
implement the short order first.
    
The short order passed on Friday says FCA holders are entitled to 
receive interest or profit in foreign exchange on their deposits at 
the rates already agreed as per original arrangements between them 
and the respective banks.
    
It also says that the non- resident Pakistanis and foreigners 
maintaining FCAs as on May 28 1998 would be entitled to utilize 
such interest or profit between them and the banks concerned in any 
manner including its outward remittance. But the order does not say 
whether this relief would be provided to FCA holders from now 
onwards or with retrospective effect since May 28 1998 when FCAs 
worth $11 billion were frozen.
    
"That is something which needs to be clarified," said a source 
close to SBP. Bankers say if the said instruction is to be made 
effective from now onwards it would not be much of a problem but if 
it takes retrospective effect from May 28 1998 that would need a 
lot of homework by SBP and banks.
    
"It would be very difficult for the SBP to make the required 
foreign exchange available in case FCA holders get interest or 
profit in foreign exchange from May 1998," said treasurer of a 
foreign bank. "This would also create surplus rupee liquidity in a 
fairly liquid inter-bank market with all of its consequences."
    
Bankers close to SBP say the Supreme Court ruling that FCA holders 
should not be compelled to convert their foreign exchange holding 
into rupees at the officially-notified exchange rate also needs to 
be interpreted cautiously.
    
They say it is not clear whether the exchange rate applicable on 
conversion of FCAs after the rupee float on May 19 1999 should be 
regarded as officially-notified exchange rate in the context of the 
Supreme Court order. From May 28 1998 when the FCAs were frozen 
after nuclear blasts to May 19 1999 a fixed exchange rate of Rs 46 
to a US dollar remained in operation for conversion of FCAs. But 
after the rupee float the SBP has been allowing FCA conversion at a 
flexible exchange rate based on average buying rate of the banks on 
previous working day. The SBP flashes this rate on Reuters every 
morning besides getting them published in newspapers to ensure that 
the FCA holders get the right exchange rate.
    
Senior bankers familiar with the discussions going on in the 
ministry of finance say the ministry also is trying to interpret 
that part of the Supreme Court order which relates to making a 
reasonable provision in every budget to facilitate gradual removal 
of restrictions on FCAs.
    
They say the ministry is trying to make out what specifically the 
government should do in the budget to ensure gradual lifting of 
restrictions on foreign currency accounts. They say what the 
ministry is trying to make out is whether the Supreme Court wants 
the government to set aside a foreign currency fund to make sure 
that its foreign exchange liabilities in the shape of FCAs are met
or something else. Since the budget provisions are normally made in 
rupees and not in foreign currency it needs elaboration.
    
The bankers say it is yet to be seen whether the ministry of 
finance consults the ministry of law to interpret this part of the 
Supreme Court order or wait for the full orders of the court or 
seek its guidance meanwhile.
    
Bankers say after the pronouncement of the Supreme Court short 
order on Friday they have received very few number of inquiries 
related to FCA business. "But we know lots of inquiries would be 
pouring in next week," said treasury manager of a state-run bank.

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990625
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Pakistan's second satellite ready for launch
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Reporter

KARACHI, June 24: About eight years after the launch of its first 
satellite the country is ready for the launch of the second, it was 
learnt on Wednesday. The satellite is presently in Kazakhstan from 
where it would be launched into space by the end of the year.
    
The satellite, called Badar-B, had successfully passed all the pre-
launch tests, said the Chairman of the Pakistan Space and Upper 
Atmosphere Research Commission (SUPARCO). Dr Abdul Majid said as 
per convention the satellite would be known as Badar-2 after its 
launch.
    
The experimental satellite was originally scheduled to be launched 
on Aug 26, he told Dawn. "But the launch has been delayed because 
of problems in the launching part of the endeavour," he said.
    
He said the Russian satellite  along with which Badar-B and three 
other satellites would be launched  was itself not ready for 
launching. "The Russians have themselves failed to achieve the 
deadline," he said. "As a result, the whole project is suffering."
    
Elaborating, the chairman of SUPARCO said the launching was 
supposed to be done from the Baikonour Cosmodrome, Kazakhstan, in 
late August. The launching would be on Zenit-2 rocket, he said.
    
Dr Majid said the main satellite to be launched was the Russian 
one. "The other four satellites  one each from Pakistan, Malaysia, 
Morocco and the US  are to be mounted on the bigger Russian 
satellite. All the five satellites in other words are to be 
launched simultaneously."
    
He said it was only the Pakistani satellite which had met the 
deadline set by the Russians. "The deadline was in April. All the 
other satellites failed to meet the deadline," he said.
    
Dr Abdul Majid, who did his PhD from the University of Wales, said 
there were four objectives of the project. Firstly, Badar-2 had a 
CCD camera through which the earth's imaging could be done, he 
said.
    
"Secondly, there are equipment in the satellite with the help of 
which signals sent to it, that is, e-mail etc, could be stored. 
These signals might be forwarded later for onward delivery," he 
said.
    
The satellite would also be able to measure the radiation through a 
dosimeter, he said. "The last objective was to carry out the 
battery-end-of-charge-detection."
    
The development of the satellite, said Dr Majid, would create the 
necessary infrastructure for the systems which could be launched in 
space. "The successful launching of the satellite would also 
demonstrate our ability to guide and control satellites from the 
ground," he said.
    
The successful operation of the CCD camera on board the Badar-2 
satellite would be a first step towards the acquisition of know-how 
for taking pictures of earth from specialized digital cameras, he 
added.
    
The chairman of SUPARCO said the cost of making Badar-2 was 
considerably more than the first satellite's. "There are two 
reasons for this. Firstly Badar-2 is far more complex and 
sophisticated than Badar-1.
    
"Secondly, since we want the new satellite to have a life of more 
than two years, we have used "space qualified components" only, 
which are very costly. "Mind you the first satellite had a far more 
shorter life."
    
Dr Majid said the satellite was made of an aluminium alloy and had 
a total mass of 68.5kg. It would be launched in a circular orbit of 
1050km with an orbital period of 106 minutes. A typical pass over 
Pakistan would last between 10 to 15 minutes, he added.


=================================================================== 
 BUSINESS & ECONOMY
990625
-------------------------------------------------------------------
CBR computerizing tax refund system
-------------------------------------------------------------------
Correspondent

FAISALABAD, June 24: Central Board of Revenue is computerising the 
sales tax refund system all over the country to eliminate delays 
and hurdles in early disposal of exporters claims.
    
This was disclosed by Mumtaz Haider Rizvi chief of sales tax, CBR 
addressing the members of All Pakistan Cloth Exporters Association 
(APCEA) here.
    
Elaborating, Mr Rizvi said that the government was determined to 
facilitate the exporters to promote the country's exports and to 
achieve the objective unnecessary procedural bottlenecks and 
irritants would be removed. The government was prepared even for 
out of way accommodation to exporters by accepting their genuine 
and reasonable demands, he stated.
    
He acceded to exporters demand of allowing variation of yarn counts 
mentioned in shipping bills and invoices since the department was 
allowing sales tax refund on value and not weight. Necessary 
official instructions in the regard would be issued very soon he 
said.
    
Responding to another demand, the sales tax chief said that he 
would direct the sales tax officials not to refuse refund claims 
for this reason. He agreed that it was no concern of sales tax 
department whether the blend of yarn was same or not as per invoice 
or shipping bill as this factor did not in any way influence the 
refund mechanism.
    
Straightening out yet another irritant disconcerting exporters 
regarding delays in verification of purchase invoices for spinning 
mills Mr Rizvi said it was no fault of exporter if the verification 
was over delayed. The exporter was unnecessarily made to suffer he 
agreed and directed the sales tax officials to issue refund to the 
exporters notwithstanding any delay in verification of purchase 
invoices.
    
Earlier welcoming the sales tax chief, Mukhtar Ahmad Sheikh 
chairman APCEA apprised him of the difficulties being faced by the 
exporters in getting refunds of their sales tax claims.

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990625
-------------------------------------------------------------------
SBP asks banks to implement court orders
-------------------------------------------------------------------
Mohiuddin Aazim

KARACHI, June 24: The State Bank on Thursday asked all banks and 
other financial institutions to implement the Supreme Court orders 
which required them to pay interest in foreign currency on frozen 
foreign currency accounts (FCAs).
    
"Interest/profit is required to be paid to foreign currency account 
holders at rates already agreed as per original arrangements 
between them and the respective banks," SBP said in a circular 
(F.E. no 16) issued to all commercial and investment banks and non-
bank financial institutions.
    
"Our interpretation is that such interest/profits are required to 
be paid in those cases where the foreign currency accounts continue 
to exist and that the amounts of interest/profits are to be 
credited in foreign exchange to the accounts of the respective 
account holders," the circular explained.
    
The SBP also circulated among all banks and non-bank financial 
institutions the copies of the June 18 short order of the Supreme 
Court on frozen foreign currency accounts.
    
The short order held that the foreign currency account holders were 
entitled to receive interest/profit in foreign exchange on their 
deposits at the rates already agreed upon as per original 
arrangements between them and the respective banks.
    
It also held that the non-resident Pakistanis and foreigners 
maintaining foreign currency accounts as on May 28 1998 would be 
entitled to utilize such interest/profit between them and the banks 
concerned in any manner including remittances abroad.
    
The SBP circular said as and when a non-resident Pakistani or a 
foreigner would like to remit the interest or profit on his FCA 
abroad he would file an application with SBP foreign exchange 
department.
    
It said the application should be filed on form "M" along with a 
covering letter containing "the name, nationality and residential 
status of the account holder, the balance in the account on the 
date of application as well as on 25-5-1998 and the period during 
which such interest/profits were earned."
    
Senior bankers reached by Dawn said the SBP interpretation of the 
Supreme Court order was such that it would not provide any relief 
to foreign currency account holders.
    
"The SBP interpretation means that the people who have already 
converted their frozen foreign currency accounts into rupees would 
not get any interest in foreign currency on their accounts with 
retrospective effect," said treasurer of a state-run bank.
    
Out of around $11 billion worth of foreign currency deposits frozen 
on May 28 1998 $5.07 billion has so  far been converted into rupees 
and $1.27 billion into US dollar bonds. Between May 28 1998 and May 
18 1999 people converted these deposits at a fixed exchange rate of 
Rs 46 to a dollar. But after the rupee float on May 19 1999 they 
began to receive a floating exchange ratewhich currently hovers 
around Rs 51.50 per US dollar.
    
"More importantly people still maintaining the frozen foreign 
currency accounts would not get interest at the rate prevailing at 
the time of freezing of these accounts," said treasurer of a 
foreign bank.
    
The SBP circular does not interpret the court order to clarify this 
point. It simply reproduces the wordings of the court order that 
the interest or profit in foreign currency is required to be paid 
to the foreign currency account holders at the rates already agreed 
as per original arrangements between them and their banks.
    
"With this ambiguity being there the banks would interpret the 
court order to their advantage," said treasury head of a European 
bank.
    
"Banks might say the term "original arrangement" referred to the 
acceptance by the holders of foreign currency accounts the right of 
the banks to make changes in the interest rates after every six 
months  or even every month," he said. "In this way the banks 
would easily justify however low rates of interest they are paying 
on frozen foreign currency accounts."
    
Before May 28 1998 banks were paying around 3.5-6.0 per cent 
interest on foreign currency accounts but after the freezing of 
these accounts the State Bank rapidly raised forward cover fee 
forcing the banks to cut the rates.
    
"In the end people still maintaining foreign currency accounts will 
suffer," said senior executive of a partly-privatized bank. "They 
will soon realize that it would be wiser to convert their deposits 
into rupees or dollar bonds than to continue to maintain the same 
for eternity."
    
Bankers say as the possibility for the foreign currency account 
holders to get better interest rate on their deposits has now been 
eliminated the pace of conversion of FCAs which slowed after the 
Supreme Court short order would again accelerate.
    
They say the SBP decision to allow outward remittances from frozen 
foreign currency deposits of non-resident Pakistanis and foreigners 
only after strict scrutiny would minimize the pace of outflow of 
foreign exchange from the country. "With the country facing acute 
shortage of foreign exchange it seems quite logical on the part of 
the SBP guys not to allow easy outflows," said a local banker.
    
Pakistan faces a projected trade deficit of $800 million and 
current account deficit of $1.7 billion in fiscal 1999-2000 with 
its liquid forex reserves hovering around $1.7 billion only.

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990625
-------------------------------------------------------------------
Germany wants to expand trade ties
-------------------------------------------------------------------
Correspondent

GUJRANWALA, June 24: Mr Peter Monior, German Commercial Counsellor, 
said here that Germany wants to establish strong trade relations 
with Pakistan.
    
Addressing the Gujranwala Chamber of Commerce and Industry, he said 
that German investment in Pakistan was over 160 million Mark while 
Pakistani investment was only 0,5 million Mark.
    
He asked the Pakistani business community to invest maximum in 
Germany so that mutual relationship could be strengthened further.
    
Pakistan-German Business Council proposed that manufacturers, 
traders and business community of Pakistan should get the 
membership of the business council for promoting trade relation 
between two countries as Germany is the second big trading country 
of the world after the United States.
    
Mr Jameel A. Naz, Chairman of Pakistan-Germany business council, 
and Pakistan-German Council director Mr Herbert T. Clot said that 
the Pakistani business community should participate in the German 
trade fair in large numbers so that spade workd could be done to 
promote trade relations between the two countries.
    
Earlier GCCI president Haji Muhammad Aslam , welcomed the German 
Commercial Counsellor and assured to study promptly proposals about 
promoting strong trade relations between Pakistan and Germany.

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990624
-------------------------------------------------------------------
Dar discusses revival of sick units
-------------------------------------------------------------------
Correspondent

Islamabad, June 23: Finance Minister Mohammad Ishaq Dar expressed 
concern at the delay in processing the cases of sick industrial 
units and directed the Banks/DFIs to finalize all such cases in 45 
days.
    
The minister, who chaired a meeting here this afternoon to discuss 
measures for expeditious revival and restructuring of sick 
industrial units in the country.
    
It was decided meeting that section 296 of the companies ordinance 
dealing with measures for revival of sick industrial units be 
enforced which has been inoperative so far. In pursuance of section 
296, the government would notify a high powered committee 
comprising of heads of Banks/DFIs to prepare packages for 
rehabilitation of sick industrial units. The committee would be 
headed by Mr. Tariq Hameed and include Mr. Shaukat Mirza and 
Mr.Humayun Elahi Sheikh.
    
The committee would consider only such cases which would be 
referred to it by the existing committee of bankers. The securities 
and exchange commission of Pakistan would notify the rules for the 
purpose of carrying out the objectives of section 296. The 
Secretariat of the committee so constituted under section 296 would 
be located in HBL, Karachi.
    
The meeting was attended by Secretary Finance, Special Secretary 
Finance, Chairman EPB, CBR and SECP besides of Chief Executives of 
NBP, UBL, ABL, HBL, NDFC, PICIS and representative of MCB.

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990623
-------------------------------------------------------------------
Fresh checks on inter-bank forex deals
-------------------------------------------------------------------
Mohiuddin Aazim

KARACHI, June 22: In what is being seen as a big surprise the State 
Bank has stopped the banks from buying or selling foreign 
currencies between themselves if the buy or sale is not backed by 
commercial deals with their customers.
    
The State Bank on Tuesday issued a circular (F.E. no 15) which 
refrained all the banks from buying or selling foreign currencies 
unless the purchase or sale is backed by commercial transaction.
    
It also stopped the banks from making forward buying or selling of 
foreign currencies for less than one month.
    
The circular said even the one-month forward transactions with the 
customers would be for fixed maturity meaning thereby that the 
banks would not be able to close-out the deal earlier or extend it 
beyond one month.
    
These restrictions have been imposed through amendments in the SBP 
instructions on foreign exchange transactions conveyed to the banks 
through another circular (F.E. no 8) issued on May 18, 1999.
    
"We are surprised...we had never expected such a thing," said a 
local banker. Some other bankers reached by Dawn said the same 
thing.
    
The circular says: "In case payment is made/received within one 
month spot selling/buying rate will be applied and the relevant 
contract will be closed out at the maturity date."
    
It further says that banks may freely buy foreign currencies from 
and sell them to other banks in Pakistan "provided such purchases 
or sales are backed by permissible transactions with their 
customers." Previously the banks could do it on their own.
    
The SBP circular came minutes after a brain-storming session 
between senior bankers and SBP officials wherein bankers urged the 
SBP officials to stop imposing an artificial exchange rate band.
    
Sources privy to the meeting said treasury managers of both local 
as well as foreign banks told the SBP officials that the practice 
would lead to severe distortions not only in exchange rate regime 
but in overall economy.
    
Bankers say immediately after the rupee-float on May 19 SBP 
officials started dictating an exchange rate band to be observed by 
the banks each day instead of allowing the market forces to 
determine the rates. SBP has so far remained silent on the issue.
    
The fresh SBP circular on foreign exchange has drawn a mixed 
reaction from amongst the bankers. "The restrictions imposed on 
forward deals would lead to faster inflow of foreign exchange 
besides checking speculation in inter -bank market," said a local 
banker.
    
"The restrictions would make importers more panicky...and the 
exporters would withhold selling foreign exchange," commented a 
foreign banker.
    
Nevertheless both the bankers were of the view that the fresh 
restrictions on foreign exchange transactions showed an abrupt 
shift in foreign exchange policy.
    
Other local and foreign bankers reached by Dawn said with the 
restrictions imposed on inter-bank foreign exchange transactions 
not only the forward buying or selling would be limited but spot 
transactions would also stop. "That would mean a simple reversal of 
the freedom of operation that the State Bank guaranteed while 
floating the rupee on May 19," said treasurer of a foreign bank.
    
"The State Bank has put these restrictions after it came to the 
fore that leading exporters in collusion with banks were not 
selling their export proceeds on time," said treasurer of a major 
local bank. "That is something the SBP can afford to neglect at a 
time when the demand for foreign exchange is enormous and supply is 
scarce."
    
Bankers say the Supreme Court judgment requiring the banks to pay 
profit on frozen foreign currency accounts in foreign currencies 
would further raise the demand for the foreign exchange. That also 
explains why the State Bank appears to be so desperate in 
containing the demand for the dollar that it has put fresh 
restrictions on foreign exchange transactions barely a month after 
floating the rupee on May 19, 1999.
    
The SBP has imposed fresh restrictions through amendments in a 
section of SBP circular (F.E. no 8) issued on the occasion of 
rupee-float on May 19. The relevant section of the said circular 
had clearly stated that the banks "may provide forward cover for 
exports or imports and other permitted transactions for any 
duration in accordance with the conditions prevailing in the 
market." It had stated that each bank was free to determine the 
conditions for deliveries and close-out.
    
The circular (F.E. no 8) had also allowed the banks to enter into 
inter-bank transactions freely.
    
Some bankers close to the SBP said the fresh restrictions were 
imposed to curb speculation in the inter-bank market before the 
unofficial cap on maximum exchange rate was lifted. They said for 
the past few weeks the US dollar had remained capped at Rs 51.90-
51.95 in inter-bank market due to an unofficial band dictated by 
the SBP. "But now the cap is going to be lifted...hence the 
restrictions to check an unusual rise of the dollar," said a 
foreign banker.

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990623
-------------------------------------------------------------------
WorldTel to invest $500m in TeleCard
-------------------------------------------------------------------
Reporter

KARACHI, June 22: The WorldTel, acting as a strategic investor, 
will invest Rs500 million as equity in TeleCard Ltd to finance its 
wireless payphone expansion programme, an announcement said on 
Tuesday.
    
"The massive wireless payphone expansion now contemplated will 
require an immediate injection of fresh equity," announcement said. 
   
The company plans to issue further capital to the strategic foreign 
investor without a right issue to the existing shareholders of the 
company. 
   
"In terms of the preliminary agreement, WorldTel or its affiliates 
propose to invest as equity in TeleCard Ltd an amount of Rs500 
million," it said.
    
The equity will be injected by ensuring that price to be paid on 
the new shares is not below Rs20 per share that is a minimum of 100 
per cent premium.
    
The TeleCard is planning to expand the roll-out of wireless 
payphones cards to 125000 to mostly targeting to rural consumers.

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990622
-------------------------------------------------------------------
90% CED target achieved in 11 months
-------------------------------------------------------------------
Intikhab Amir

PESHAWAR, June 21: The Customs and Central Excise Collectorate, 
Peshawar achieved over 90 per cent of its annual recoveries target 
set for Central Excise Duty (CED) in the first eleventh months of 
1998-99, official sources said here on Monday.
    
Against the initial CED target of Rs 9563 million, total 
collections stood at Rs 8938.24 million at the end of May, the 
eleventh month of the 1998-99 financial year.
    
Main CED sources appeared to be cigarette and cement industries 
which jointly yielded Rs 7962.09 million till  May 1999, said the 
sources.
    
The other three major sectors of CED contributed a total of 726.24 
million and included a sum of Rs 534.4 million collected on 
beverages concentrate, Rs 39.50 m collected from the sugar industry 
and Rs 152.34 m raised from the beverages (aerated & non aerated).
    
Apart from these five major sources of CED collections in the NWFP, 
the Central Excise authorities raised a sum of Rs 250.78 m from all 
other miscellaneous sectors.
    
The customs and central excise collectorate's officials attached 
extra significance to the CED recoveries describing it an 
improvement by 9 per cent over and above the Rs 819641 m total CED 
collections made in the 1997-98 financial year.
    
They said the collectorate recorded recoveries more than the 
previous financial year in spite of reduction made in the rate of 
duty on cement industry which was brought down to Rs 1400 per 
metric ton in the 1998-99 financial year against Rs 1850 per metric 
ton in the 1997-98 financial year.
    
In comparison with the recovery position recorded in the 
corresponding period of the last financial year, the Peshawar 
collectorate of Customs and Central Excise, said the sources, this 
time round recovered Rs 741.83 m more than the Rs 7178.79 m 
recoveries made in the July-May period of the 1997-98 financial 
year.
    
Higher CED collections, this time round, have been attributed to 
the raise in duty on cigarette manufacturers during the 1998-99 
financial year. The sector raised 4212.31 m in the first eleven 
months of the current financial year against the total collections 
of Rs 3178.72 m recorded in the last financial year.
    
"Apart from raise in the rate of CED on cigarette industries, the 
collectorate also plugged the leakages and non-payment of full 
amount by the cigarette manufacturers," said the official sources.

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990622
-------------------------------------------------------------------
Many duties withdrawn, taxes lowered
-------------------------------------------------------------------
Bureau Report

ISLAMABAD, June 21: The government on Monday announced changes and 
adjustments in sales tax, customs duty and central excise duty on a 
number of items, including cigarettes, bricks and cement blocks, 
CNG kits, plastic products, credit cards, bulldozers, angle dozers, 
penicillin derivatives and on advertisements proposed in the 
federal budget.
    
Winding up the budget speech in the National Assembly, Minister for 
Finance and Economic Affairs Ishaq Dar, however, announced further 
increase in the import duty of palm oil and soybean oil by Rs1000 
and Rs250 per ton respectively.
    
"But there would be no increase in the retail price of edible oil 
which will continue to be sold at Rs52 per kg," he emphasized.
    
Also a 10 per cent customs duty which was imposed on the import of 
video cameras has also been extended on the import of still 
cameras.
    
Mr Dar assured the NA that there would not be any mini budget 
throughout the next financial year and that no decision would be 
taken without the approval of the legislators.
    
Giving details, he said the government had decided to withdraw 12.5 
per cent central excise duty on advertisements, and instead 2.5 per 
cent CED had been levied on commercial importers of newsprint and 
print media.
    
The finance minister announced zero duty on the import of 
bulldozers and angle dozers with a view to developing the less 
developed areas of the country.
    
He also said that Customs Act 1969 had been amended to allow 
exporters to obtain raw materials from the warehouses without 
seeking permission from the customs department.
    
He said 10 per cent regulatory duty on the import of penicillin 
derivatives was being removed and there was a proposal to again 
levy 35 per cent customs duty on it in order to protect the local 
industry.
    
Mr Dar also announced the removal of sales tax on cement blocks. 
However, he said no sales tax exemption would be offered on 
concrete. Similarly, he said that since there was no sales tax on 
the import of CNG kits, a decision had been taken to remove tax on 
local supplies to protect the home industry.
    
The plastic industry had been taken out of the central excise levy 
and their sales would now be leviable without a benefit of tax 
adjustment. This would benefit the industry and help it flourish, 
he said.
    
The finance minister also announced reduction in excise duty on 
credit card from 2 per cent to 1.5 per cent to be applicable on 
transactions both in and outside the country.
    
The rate of withholding tax on edible oil as proposed in the budget 
had been changed and now the importers-cum manufacturers would have 
to pay 2.5 per cent WT and commercial importers would have to pay 4 
per cent WT rather than the single rate of 2.5 per cent.
    
Mr Dar said the exemption of withholding tax on Terms Finance 
Certificate (TFCs) and institutional investors had been announced 
for developing the debt market. "And now these exemptions will be 
available on those TFCs which will be issued after Ist July 1999."
    
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990622
-------------------------------------------------------------------
Expansion of ST dept approved
-------------------------------------------------------------------
Correspondent

ISLAMABAD, June 21: The Government has allowed the Central Board of 
Revenue (CBR) to launch a Rs 70 million expansion programme of the 
sales tax department for ensuring 100% coverage of the corporates, 
services sector assessees and for extension of the department to 
FATA and Northern Areas.
    
The authorisation has come by exempting the sales tax department on 
one-time basis from the prime minister's directive issued 
for curtailing development funds of federal organisations.
    
The CBR had last week sought special exemption with the plea that 
the sales tax department could not meet the demands for extension 
of ST to the FATA and Northern Areas, and the programme 
for expanding the assessment and anti-evasion coverage under the 
'99-2000 budget could not be realised without funding.
    
Three expansion schemes have been planned for the ST department in 
the next financial year which include computerisation, employment 
of technical officials and agencies, and creation of physical 
infrastructure in new areas.
    
The computerisation and the linkage with the Income Tax department 
involves purchase of hard and software systems, while the 
employment of officials and technical services involves training 
and salaries payments. A sizeable physical infrastructure creation 

is planned which would mean setting up of new offices, 
requisitioning the space for the ST officials taking over duties in 
various towns for ensuring better coverage and anti-evasion 
activities, and furnishing of these spaces and offices.

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990626
-------------------------------------------------------------------
KSE 100-share index declines by 12.66 points
-------------------------------------------------------------------
Reporter

KARACHI, June 25: Stocks on Friday failed to extend the overnight 
snap rally as conflicting news about the outcome of US Gen Anthony 
Zinni's visit did not allow investors to take long positions on any 
of the counters. The KSE 100-share index fell 12.66 points at 
1,044.04.
    
But larger fall was averted as section of leading hoped that 
something positive could emerge from the visit of the US general 
but at a later stage most of them covered positions at the falling 
prices in the pivotals, notably PTCL and Hub-Power.
    
Conflicting rumours about the outcome of talks between the prime 
minister and the visiting US general kept pouring in throughout the 
session but their tilt was generally in favour of bears who 
exploited the situation with a great precision.
    
Those who were expecting an instant positive response from Pakistan 
and have made extensive buyings at the lower levels were a bit 
disappointed and left the market with the same speed as they had 
entered.
    
Although, there is no final official word on the outcome of Gen 
Zinni's two-day visit and his talks with the prime minister, aid 
analysts adding "only some positive development on the Kashmir 
front could set the trend for the market to follow during the next 
week".
    
"It is too early to expect something positive on the border 
situation in Kashmir as rigid positions taken by the contenders 
need a bit softening", said a member of the KSE.
    
He said the proceedings on the floor for the last about one month 
after the Kargil issue engulfed the market reflecting that 
investors here are too scare of war and are yearning from a durable 
peace between the two neighbours.
    
The KSE 100-share index finally ended at 1.044.04 points as 
compared to 1,056.70 points a day earlier, wiping out Rs3 billion 
from the market capitaliszation at Rs285.140 billion as compared to 
Rs288.146 billion on Thursday, indicating the weakness of PTCL.
    
However, the market took a positive turn at the fag-end of the 
session followed by heavy covering purchases in Hub-Power 
apparently on some positive news.
    
Dealers said the revival of demand in it was related to news that 
WAPDA has made payment of Rs4 billion to it against its overdue 
power bills. But some others said the buying is related to peace 
moves by the US General.
    
Minus signs again dominated the list, with most of the leading MNCs 
being in the forefront of losers under the lead of Shell Pakistan, 
BOC Pakistan and Lever Brothers, which suffered fall ranging from 
Rs4.00 to 25.00.
    
Other prominent losers were led by 9th ICP, IGI Insurance, PSO, 
General Tyre, Ghandara, Clariant Pakistan and Philips falling by 
Rs1.50 to 2.50 amid active selling.
    
Gains on the other hand were fractional barring New Jubilee 
Insurance and Jahangir Siddiqui and Co, which rose by Rs1.71 and 
1.90, respectively.
    
Trading volume fell to 71 million shares from the previous 97 
million shares as losers forced a strong lead over the gainers at 
20 to 73, with 41 shares holding on to the last levels.
    
The most active list was again topped by PTCL off 45 paisa at 
Rs19.75 on 28 million shares; followed by Hub-Power up 35 paisa at 
Rs13.60 on 16 million shares; PSO off Rs1.50 at Rs91.60 on 11 
million shares and Fauji Fertiliser unchanged at Rs40.45 on 4 
million shares and Apollo Textiles unchanged on 2.300 million 
shares.

Back to the top
=================================================================== 
 EDITORIALS & FEATURES
990620
-------------------------------------------------------------------
Arbiters of justice  2
-------------------------------------------------------------------
Ardeshir Cowasjee

TO give the devil his due, when he wishes to be, he can be honest. 
When Mushahid Hussain made Nawaz Sharif read the editorial in The 
Economist of May 22 Nawaz Sharif did not order him to refute what 
was written, nor did he threaten to sue for defamation. He took all 
in his stride, including:
    
"The judiciary at first tried to check Mr Sharif, but has given up. 
When the chief justice of the Supreme Court, Sajjad Ali Shah, took 
the president's side in an argument with the prime minister in 
1997, a mob from Mr Sharif's party stormed the Supreme Court and Mr 
Sharif sacked Mr Shah. The courts have given Mr Sharif little 
trouble since .... "
    
After the Supreme Court had, in December 1997, reluctantly taken 
notice of the storming incident, inquired into it, issued a few 
contempt of court notices, pardoned many and charged a handful of 
nonentities with contempt of court, it delivered its judgment on 
May 14, 1999, exonerating those charged. The nation was aggrieved 
by this judgment and now one of the aggrieved, Shahid Orakzai, has 
filed a petition in the Supreme Court praying that the matter be 
examined and tried de novo. The petition was heard by a bench of 
five comprising Chief Justice Ajmal Mian, Justices Saiduzzaman 
Siddiqui, Irshad Hasan Khan, Raja Afrasyiab Khan, and Bashir 
Jehangiri and converted into an appeal. The bench ordered that 
notices be issued to the respondents, "the Attorney-General of 
Pakistan and the persons against whom the charges were framed," and 
that the appeal would be heard on June 28.
    
The bench will surely do 'complete justice' according to Article 
187(1) of the Constitution: "Supreme Court shall have power to 
issue such directions, orders or decrees as may be necessary for 
doing complete justice in any case or matter pending before it, 
including an order for the purpose of securing the attendance of 
any person or the discovery or production of any document."
    
The framers of our contempt laws never contemplated the possibility 
that the government of the day would organize a mob to storm the 
Supreme Court whilst in session, i.e. commit contempt in the face 
of the court (as reflected in Order 27 Rule 7(2) of the Supreme 
Court Rules 1980). The Attorney-General of Pakistan and his 
deputies are men appointed and employed by the government. They 
cannot be expected to wholeheartedly and honestly conduct a 
prosecution against their appointers and employers. The 
"aggrieved," therefore, urge that in conformity with current 
international judicial norms and practices, the Supreme Court 
appoint an independent special prosecutor able to prosecute the 
case in an unbiased manner (covered in my statement placed on the 
court record on May 6, 1999).
    
Another good reason why the Attorney-General is incompetent to 
prosecute this case is covered by excerpts from my affidavit placed 
on the court record on April 22, 1998:
    
"That it is on record that the first law officer of the people, 
Attorney-General Chaudhry Farooq, has himself committed contempt in 
the face of the Court. During the 1993-96 PPP government of Benazir 
Bhutto, Advocate Chaudhry Farooq, defending an Ittefaq case in the 
Lahore High Court, swore at the presiding judge, Mr Munir A Shaikh, 
in open court, using the crudest of language. For this blatant 
contempt committed in the face of the court, the honourable 
presiding judge could have convicted and imprisoned him.
    
"That Advocate Chaudhry Farooq was not prosecuted does not deviate 
from or alter the fact that he abused an honourable High Court 
judge in open court, thus committing contempt in the face of the 
court.
    
"That with the advent of the PML government of Nawaz Sharif, the 
Prime Minister appointed as Attorney-General of Pakistan, as the 
people's lawyer, his own lawyer, Ittefaq's lawyer, Advocate 
Chaudhry Farooq.
    
"That the judiciary and the people accepted him, without protest, 
as the first law officer of the land rests heavily on the heads of 
the people and even more heavily on the heads of those in power and 
authority who could have opposed his nomination and subsequent 
appointment, and, additionally, this advocate can hardly be 
considered to be competent to aid the Supreme Court in the 
investigations it is now conducting to establish the identity of 
those members of the ruling party who had either organized the 
storming, or were leading the mob, or were with the mob on November 
28, 1997."
    
Unless a special prosecutor is appointed, the exercise now in the 
mill will be an exercise in futility. The appeal will be admitted 
for hearing by CJ P Ajmal Mian who will clear his conscience and 
retire two days later, leaving his successor CJ P Siddiqui to carry 
on.
    
The Attorney-General is hardly likely to consider the involvement 
of the new CJP in the removal of CJP Sajjad Ali Shah in 
November/December 1997, or the contents of Sajjad Ali Shah's letter 
dated November 28, 1997, addressed to the President of Pakistan 
which has been placed on the Supreme Court record as an attachment 
to my affidavit dated May 9 1998 :
    
"I am very sorry to state that Mr Justice Saiduzzaman Siddiqui, a 
judge of this court, who is presiding over a bench of three judges 
at Peshawar registry, has issued an administrative order 
constituting a full court consisting of 15 judges to commence 
sitting on 1/12/97 for hearing of the cases at Islamabad. He has 
heard and decided a petition under Article 184(3) of the 
Constitution, which cannot be registered and heard at the Peshawar 
registry and can be registered and heard only at the principal seat 
of the Supreme Court unless so authorized by the Chief Justice. 
This petition was taken up for hearing without any authorization 
from me and such action was also taken by two judges, namely, Mr 
Justice Irshad Hasan Khan and Mr Justice Khalil-ur-Rehman Khan at 
Quetta without permission of the Chief Justice, and the order was 
passed holding in abeyance the notification of my appointment as 
Chief Justice, which order has been set at naught by the bench of 
five judges by a majority of four to one sitting at the principal 
seat.
    
"Mr Justice Saiduzzaman Siddiqui, as stated above, has passed an 
administrative order taking over the control of the whole 
administration which is the exclusive function of the Chief 
Justice. This divide amongst the judges of the Supreme Court is 
deliberately created by interested quarters. I do not want to make 
any comments on the conduct and attitude motivating such actions, 
which smack of defiance and rebellion and amount to misconduct 
calling for action by the Supreme Judicial Council for which 
necessary steps are to be taken."
    
The AG will also not consider what Senator Iqbal Haider has 
recorded in his statement handed in to the Supreme Court on May 21, 
1998:
    
"The attacks on the Supreme Court started on August 21, 1997, when 
the strength of the Supreme Court judges was arbitrarily reduced. 
The spate of attacks by the ruling party on the Supreme Court 
continued thereafter with the intent to disrupt the course of 
justice and to prevent the court from hearing most crucial cases 
incriminating the prime minister, his parliamentarians and 
friends."
    
In order to survive, the people desperately feel the need for an 
independent judiciary, particularly with the government we now 
have. Those who try to help the judges regain their dignity and 
status are generally regarded as fools and asked the simple 
question: "Well, you may want to do something for the judges, but 
do the judges want to be independent enough to rule against the 
government?"
    
Take the FCA case. For some reason or other, stress was laid on the 
production of a list of those who withdrew or remitted foreign 
exchange between May 11 and 28, 1998. That does not matter one 
iota, for by law people were free to remit whatever they liked 
during this period. What was to be revealed to the Court and to the 
people of Pakistan were the names of the powerful people in 
government, the culprits, who sent out money in between the time 
the embargo was declared on May 28 and the returns submitted to the 
State Bank the next morning. The Governor of the State Bank has a 
list of these people, but the court did not ask for it.
    
Another worrying aspect is the appointment of judges. Three eminent 
additional judges of the Lahore High Court, Justices Saqib Nisar, 
Asif Saieed Khosa and Mian Zafar Yasin, recently completed their 
statutory probationary period of one year, and were recommended by 
the CJ of the LHC and the CJP as being suitable for confirmation as 
permanent judges.
    
The law ministry processed their cases and the prime minister 
advised the president to confirm them. They had to be confirmed "in 
the absence of very strong reasons to be recorded by the 
President/Executive which may be justiciable". President Tarar 
refused to confirm them, stating that the first two are young (both 
are over 40 and constitutionally eligible) and that the third's 
rate of disposal of cases was poor. Would the CJ of the LHC and the 
CJP have recommended confirmation? "Strong reasons"?

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990625
-------------------------------------------------------------------
A fiasco in the making
-------------------------------------------------------------------
Ayaz Amir

WITH each passing day, it should be becoming clearer even to the 
benighted that in Kashmir we are allowing ourselves to get caught 
in a bind. While the ultimate objective of the venture under way 
remains shrouded in a mist of confusion and conflicting statements, 
the western powers, whose opinion matters to us because they are 
our creditors, are not buying the line that the Pakistan army has 
nothing to do with the occupation of the Kargil heights and the 
fighting which this has sparked.
    
However hopeful and desperate a spin the foreign office may try to 
put on this situation, it is Pakistan and not India which is under 
pressure to restore the status quo ante along the Line of Control. 
This is not a failure of diplomacy as many pundits are screaming. 
It is a political failure inasmuch as Pakistan's stance, whatever 
we may think of it, is hard to sustain before the world's eyes. Nor 
do we seem very clear in our minds about what we want, which is 
adding to the confusion.
    
Through the Kargil operation are we trying to acquire bargaining 
chips for a trade-off on Siachen? Do we want to pose a permanent 
threat to India's lines of communications further to the north? Do 
we want to bring India to the negotiating table? Is this the first 
step in the liberation of Kashmir? If one or more of these 
objectives were behind this operation, did the Pakistan high 
command really calculate that if a few bold thrusts (by the 
mujahideen or whatever) were made across the Line of Control the 
Indian response would remain localized and India would not make too 
great a noise about such a move? There is nothing more foolish in 
war than to substitute wishfulness for a realistic appreciation of 
the situation but we seem to be doing this all the time.
    
To make matters worse, there is no shortage of drum-beaters in the 
national press who are crying that we have the Indians where we 
want them and that it is an historic opportunity to press home our 
advantage. General Hamid Gul of course is in a class of his own. He 
says nothing should deter us, not even the threat of nuclear war, 
to take the fight to the enemy. But if this class of super-patriots 
were to give some thought to the matter they might see that it is 
Pakistan which has painted itself into a corner.
    
What are our options? The Hamid Guls notwithstanding, we are in no 
position to expand the Kargil fighting, our strength being 
insufficient for the purpose. Nor would the international community 
stand for it, a matter of no small moment for us since our begging 
bowl is as strong as our pretensions. All we can hope for is that 
India will not raise the ante, that it will not escalate the 
situation or that it will not go against the formidable package of 
wishes which constitutes our strategic planning. In other words, 
that India will oblige us by consulting our convenience.
    
If our options are limited, India's are not. If retaking the Kargil 
heights becomes a longish affair, it can cross the Line of Control 
in a bid to interdict the supply routes of the fighting force 
occupying the peaks. The Indian army can strike elsewhere along the 
Line of Control or it can test Pakistan's defences at points of its 
choosing along the international frontier. With each passing day 
the threat of a conflict is growing, not receding, with influential 
voices in India swelling to a chorus in demanding a wider settling 
of accounts with Pakistan.
    
Against the backdrop of this worsening situation it is not enough 
for Pakistan to say, as its politico-military leaders are 
increasingly doing, that the country is prepared for all 
eventualities and that it will give a befitting response to Indian 
aggression. It is of course the duty of the armed forces to defend 
the nation's frontiers and if war is imposed by India the people 
and the armed forces will be one in fighting the aggressor. It is, 
however, scarcely the height of wisdom to acquiesce (to put it no 
stronger than this) in a situation which leads to war and then to 
think of giving one's adversary a bloody nose.
    
A defensive war, one imposed from outside, is of course a necessity 
and should be fought to the death. But it is folly of the highest 
kind to start hostilities, or initiate a process which leads to 
hostilities, if the objective is less than clear or is not worth 
the fighting. This is not defeatism but simple common sense. That 
our soldiers are brave and our people capable of responding to any 
challenge, no matter how severe, are given things which in a 
discussion of this sort should be taken for granted. At issue is a 
different question altogether.
    
Have we carefully considered the possible consequences of the 
Kargil operation? Even if there is a minuscule chance of it leading 
to war, have we taken this into account? Or, on the contrary, are 
we being sucked into a conflict not of our choosing simply because 
we have lost control over the situation?
    
It would be tragic if the last were to be true for it would show a 
singular and recurring inability to learn from our own history. As 
in 1965 and 1971, we are allowing ourselves to become prisoners of 
an unfavourable situation. On display is the same thumping, chest-
beating rhetoric and the same contempt for reality. And the same 
desire, befitting more a child than mature nation, that the outside 
world should come to our rescue and turn a developing fiasco into a 
face-saving diplomatic solution.
    
It is of interest to dwell on those distant triumphs. No sooner had 
the '65 war started than Ayub Khan realized his blunder and began 
looking for any half-decent way to end the conflict. "They've got 
you by the throat, Mr President," (or words to that effect) is what 
the American ambassador reportedly told the Field Marshal and there 
was nothing that the Field Marshal could say in reply. In '71 Yahya 
Khan and General Niazi expected Chinese and American apparitions to 
come to Pakistan's rescue.
    
Pakistan is not a nation of nincompoops or morons. Its people 
(common people, that is) are talented, hard-working and brave. 
Trapped in a cruel destiny, they may not have much of a choice when 
it comes to mediocre or second-rate leadership. But they certainly 
deserve better than to be led once again into a conflict with no 
clear objectives. If national survival is at stake, the people of 
Pakistan can turn the entire country into a battlefield. But 
between this vision of Armageddon and the unthinking slide to war 
we are seeing there is a world of difference.
    
What makes the present situation all the more alarming is the 
growing feeling that there is no firm hand on the tiller. Who is in 
charge? Who has thought up this operation which in the space of a 
few weeks has taken the nation to the brink of war? There is 
certainly no Churchillian ring to the heavy mandate which instead 
looks slightly rattled as if what is happening was not part of 
anyone's game-plan. As for the army chief, he has lately begun 
looking very grim.
    
Nothing is lost, however. It should not take an American Centcom 
commander to tell us what is in our best interests or what we 
should do. If we can sustain the Kargil build-up and thrust, fine. 
Let us not in that case be deterred by the US or any other power. 
But if politically our position is ill-judged and therefore 
untenable, we could do worse than to remember the military maxim 
which advises against reinforcing a failure.


===================================================================
SPORTS
990621
-------------------------------------------------------------------
Australia lift Cricket World Cup '99
-------------------------------------------------------------------

LONDON, June 20: The bowling of Shane Warne and Glenn McGrath led 
Australia to an eight-wicket win over Pakistan on Sunday in one of 
the most one-sided finals in the history of the World Cup.
    
Leg-spinner Warne ripped through the middle order with four wickets 
for 33 as Pakistan were bundled out for 132 in 39 overs, the lowest 
score in a World Cup final. Fast bowler McGrath, who made the 
initial breakthrough, ended with two wickets and conceded a mere 13 
runs from his nine overs.
    
It left Australia a simple task and openers Adam Gilchrist and Mark 
Waugh wasted no time. Australia achieved the target in 20.1 overs.
    
Gilchrist blasted a half-century from only 33 deliveries which 
included eight fours and a six. He was out almost immediately 
afterwards for 54, caught by Inzamam-ul-Haq off the first ball by 
spinner Saqlain Mushtaq to leave Australia on 75 for one. But with 
almost 40 overs remaining, the match was as good as over.
    
Ricky Ponting also departed for 24, edging a simple catch to 
wicket-keeper Moin Khan off Wasim Akram but Mark Waugh (37 not out) 
and Darren Lehmann (14 not out) comfortably saw them to victory 
with Lehmann hitting the winning boundary through the covers.
    
It left captain Steve Waugh to lift the trophy, the second time 
Australia have won it following their triumph in Calcutta against 
England in the 1987 final.
    
Australia join West Indies as the only two countries to have won 
the trophy twice.Reuters

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990621
-------------------------------------------------------------------
Hockey: Pakistan out of the next Champions Trophy
-------------------------------------------------------------------
Sydney Friskin

BRISBANE, June 20: In a dramatic finish Pakistan lost 4-3 to 
England in the 5th place play-off at the 21st Champions Trophy 
hockey tournament here.
    
A tense battle of skill and attrition ended with a golden goal by 
England in the second period of extra time.
    
The overall effect is that Pakistan, having finished last, are now 
forced to drop out and will miss the 22nd event of the series next 
year in Amsterdam. There was a previous crisis in 1986 when 11th 
place at the world cup in London should have shut Pakistan out but 
they were squeezed into the next event by virtue of being Olympic 
Champions.
    
More tragic still was the story of the match itself. Pakistan were 
comfortably placed with a 2-0 lead within 20 minutes but slackness 
in defence changed the picture. England levelled the score at 2-2, 
went 3-2 ahead before Pakistan redressed the balance, eventually to 
send the match into extra time.
    
Islahuddin, who was captain of the victorious Pakistan team in 1978 
and is here as a commentator, said that Pakistan played defensively 
and that these tactics eventually cost them the match. The fact 
that two of Pakistan's goals came from penalty corners adds weight 
to his comments. At the end of it all Pakistan's officials here 
were absolutely devastated.

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990625
-------------------------------------------------------------------
World Cup cricketers to face EB music
-------------------------------------------------------------------

ISLAMABAD, June 24: Ehtesab Bureau has already initiated probe into 
reports of match-fixing and objectionable behaviour against 
Pakistan cricketers as a batch of national team was scheduled to 
return home Thursday.

The Ehtesab Bureau confirmed that it has undertaken inquiries 
against Pakistan team after concrete evidence of wrongdoing by the 
country's World Cup cricketers was presented by intelligence 
agencies.
    
Leading stars, including skipper Wasim Akram and fast bowler Shoaib 
Akhter, were missing from the batch that returned from England to 
face mounting public anger and criticism in the aftermath of fiasco 
at the World Cup final against Australia at Lord's (London).
    
The sources told APP Thursday that the competent authority had 
referred the case of Pakistan cricket team to the Ehtesab Bureau 
after intelligence agencies submitted concrete evidence of indecent 
behaviour by some cricketers amidst suggestions that the World Cup 
final thrown away.
    
The intelligence agencies had presented evidence of indiscipline, 
lack of coordination and planning by management and members of the 
cricket team.
    
"We will call all the players and officials separately for them to 
present their side of the story", said an Ehtesab Bureau official.
    
He said the Ehtesab Burea will prepare a reference after completing 
its investigations and the same will then be presented to the 
President of Pakistan, who is Patron-in-Chief of Pakistan Cricket 
Board, for necessary action.
    
The EB official said that the report of judicial probe held by 
Justice Malik Muhammad Qayyum of Lahore High Court will also be 
taken into account during investigations against cricketers.
    
The report of judicial inquiry is also expected to be presented to 
the President of Pakistan in the second week of next month.
    
The official pointed out that under the Ehtesab Burea act, the EB 
is authorised to summon anybody against whom allegations of 
financial impropriety or bringing the country's name into disrepute 
are levelled.
    
As part of evidence, the intelligence agencies referred to the 
statement of skipper Wasim Akram before the match against India 
that "it would be a good practice match for us".
    
The report also blamed Chairman Pakistan Cricket, who was present 
in England alongwith entire PCB hierarchy, for failing to maintain 
discipline in the team.
    
The report also pointed out that a strong lobby, within and outside 
the team, got rid of coach Javed Miandad and skipper Aamir Sohail, 
because they laid emphasis on maintaining discipline in the team.
    
The EB official said some of the players "went overboard in merry-
making" during the course of the World Cup in England, raising 
suspicions of "deliberate surrender" by the Pakistan team in the 
final.
    
The one-sided final at Lord's, meanwhile, continues to fuel 
people's anger as they were giving vent to their feelings of 
disappointment by burning players effigies and pelting their homes.
    
The mother of skipper Wasim Akram also pleaded to fans to change 
their attitude and encourage players for better results in 
future."When two teams play, one has to lose but the attitude of 
people of Pakistan is unfortunate", she said.APP

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990624
-------------------------------------------------------------------
Shahbaz flays PHF for set-back in hockey
-------------------------------------------------------------------

KARACHI, June 23: Former hockey stalwart Shahbaz Ahmed on Wednesday 
appealed to the Prime Minister to take notice of persistent 
setbacks in hockey and termed the present state as "the darkest 
period in the game."
    
Talking to APP before his departure to Canada to play league 
matches, Shahbaz said it is hight time that drastic measures are 
taken to revive the standard of hockey in Pakistan.
    
"Hockey is our national game and it is a sorry state. I appeal the 
Prime Minister Nawaz Sharif to dismiss the present incompetent 
management of Pakistan Hockey Federation(PHF) and take drastic 
measures to save the future of the game," he said.
    
Pakistan Premier is the patron of national hockey. Shahbaz, who in 
his illustrious career won 12 Man- of the- Tournament awards, said 
people are just reacting to cricket team's loss in the final when 
hockey, the national games, has gone down. People should raise 
their voice for hockey also," he said. The 32- year old Shahbaz 
,known for his slick stick work will play few league games in 
Canada.
    
"When we lost the Commonwealth Games last September they said it 
was nothing, then we lost Asian Games they said it was bad luck and 
now we have lost the Champions Trophy which is the biggest 
setback," said Shahbaz, who led Pakistan to World Cup Title in 
1994.
    
Shahbaz criticised the selection of the team in the last one year 
and said Pakistan's best centre forward Kamran Ashraf and full back 
Naveed Alam have been victimised.
    
"Naveed scored 22 goals in the National championship and other 
competitions and Kamran is still the best but the present 
management does not like them," he stated.
    
Former Pakistan captain feared that time is running out for 
Pakistan hockey.
    
"This is a do or die situation. The present problem is on since the 
1996 Olympics and if we do not take measures hockey will finish in 
the country," he concluded.

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