Ittefaq Group

{{Short description|Steel manufacturer}} {{Use dmy dates|date=February 2020}} {{Use Pakistani English|date=February 2020}} {{Infobox company | name = Ittefaq Group | logo = | caption = | type = Construction and Metallurgy | genre = Commercial Public | fate = Lahore<ref name="dawn.com">{{cite web|url=https://www.dawn.com/news/395764|title=Notices to Ittefaq Group owners: Sale of steel units to clear debt|date=23 July 2004|publisher= Dawn (newspaper)|access-date=8 January 2018}}</ref> | predecessor = | successor = | foundation = {{start date and age|1951}}<ref name="Global Security"/> | founder = Mian Barkat Ali Mian Muhammad Siraj Mian Muhammad Bashir Mian Abdul Aziz Mian Muhammad Shafi Mian Meraj Din<ref name=GlobalSecurity>{{cite web|url=https://www.globalsecurity.org/military/world/pakistan/sharif.htm|title=Detailed Profile of Sharif Family|first=John|last=Pike|date=3 January 2018|publisher=GlobalSecurity.org website|access-date=8 January 2018}}</ref> | defunct = 2004<ref name="dawn.com"/> | location_city = Lahore | location_country = Pakistan | location = | locations = | area_served = | key_people = Mian Muhammad Sharif Chairman | industry = Material science and Metallurgical Engineering | products = Hot rolled steel Products Billets Cold rolled steel Products Galvanised steel Products Electronic materials | services = Production of Iron and Steel }}'''Ittefaq Group''' is a Pakistani industrial conglomerate with interests in sugar, steel and textiles headquartered in Lahore. It was founded in 1951 by the Sharif family. At its peak, it was a manufacturer of diesel engines up to 200 hp, lathes, road rollers, sugar mills, cement plants, agricultural equipment, and electric fans.<ref name="worldbank">{{Cite web|url=https://documents1.worldbank.org/curated/ru/802071468286272829/pdf/multi-page.pdf|title=Ittefaq Foundry history|access-date=2 June 2024|archive-date=2 June 2024|archive-url=https://web.archive.org/web/20240602173001/https://documents1.worldbank.org/curated/ru/802071468286272829/pdf/multi-page.pdf|url-status=dead}}</ref>

==History== It was founded by seven brothers in 1939 as a small foundry.<ref name="dawn.com"/> Among the founders, the major contributions were made by the brothers Mian Barkat Ali and Muhammad Sharif. The total investment in the plant was estimated to be at Rs. 15 million in 1966.<ref name="worldbank"/> The word ''Ittefaq'' means ''Unity'' in English language (implying unity among the 7 founding brothers).<ref name="Global Security">{{cite web|last=Global Security|title=Profile of Sharif Family|url=http://www.globalsecurity.org/military/world/pakistan/sharif.htm|publisher=globalsecurity.org website|access-date=30 July 2017}}</ref><ref name=GlobalSecurity/>

Muhammad Sharif, (the father of former Prime Minister Muhammad Nawaz Sharif), initially set up an iron-melting furnace in Lahore and quickly expanded this business in the early years of Pakistan.<ref name=GlobalSecurity/>

By 1971, Ittefaq Foundry had made a notable presence in the steel industry in Pakistan.<ref name="baker">{{cite book |title=Capitalism's Achilles heel: Dirty Money and How to Renew the Free-market System |last=Baker |first=Raymond |year= 2005 |publisher=John Wiley and Sons (GoogleBooks)|isbn=978-0-471-64488-0 |pages=[https://archive.org/details/capitalismsachil0000bake/page/82 82]–83 |url=https://archive.org/details/capitalismsachil0000bake |url-access=registration |quote=nawaz sharif ittefaq. |access-date=30 July 2017}}</ref> In 1972, Prime Minister Zulfikar Ali Bhutto nationalized the steel industry, including Ittefaq family steel division.<ref name="baker"/>

In 1978, General Mohammad Zia ul-Haq returned the business to Ittefaq family after developing political links with the Sharifs. In 1983, Zia ul-Haq appointed Nawaz Sharif as finance minister in the Punjab provincial cabinet. Then after the Pakistani general election, 1988, Nawaz Sharif formed and headed the provincial government in Punjab. In November 1990, Nawaz Sharif became the Prime Minister of Pakistan for the first time.<ref name=GlobalSecurity/>

In 2004, the Ittefaq Group steel division was acquired by Al-Rehmat Group of Companies of Faisalabad for {{PKR}}2.159 billion.<ref name="dawn.com"/> The sell-out was called by the Lahore High Court to pay up the loan which Ittefaq Group steel division had taken between 1982 and 1988.<ref name="dawn.com"/>

Upon the plea of family of Mian Mehraj Din (one of the seven brothers who set up Ittefaq Group and founder of Haseeb Waqas Group of Companies <ref name="https://www.hwgc.com.pk">{{Cite web|url=https://www.hwgc.com.pk/corporate_profile.htm|title=Welcome to Haseeb Waqas Group|website=www.hwgc.com.pk}}</ref>) that the evaluation of assets is wrong Ittefaq Foundry was finally sold out to Al-Rehmat Group for {{PKR}} 6 billion.<ref name="https://tribune.com.pk">{{Cite web|url=https://tribune.com.pk/story/714088/adjusting-loan-al-rehmat-to-buy-ittefaq-subsidiaries|title = Adjusting loan: Al-Rehmat to buy Ittefaq subsidiaries|date = 27 May 2014}}</ref>

==Loan defaults== Ittefaq Foundries opened a credit account with the National Bank of Pakistan's Wapda House branch in Lahore in August 1979, initially obtaining a facility of Rs 17.5 million.<ref name="auto2">{{Cite web|url=https://www.dawn.com/news/364585/plants-surrendered-by-sharif-family-disposed-of|title=Plants surrendered by Sharif family disposed of|date=15 July 2004|website=DAWN.COM}}</ref> Following Mian Nawaz Sharif's appointment as Finance Minister of Punjab by Muhammad Zia-ul-Haq, the credit limit increased to Rs 30 million and further expanded to Rs 200 million when Sharif became the provincial chief minister.<ref name="auto2"/> Despite accruing no markup payments until 1988-89, the credit facility was subsequently raised to Rs 288.177 million.<ref name="auto2"/>

In November 1991, the foundry secured increase by mortgaging assets valued at Rs 359.88 million. However, the company defaulted on payments, leading the credit amount to escalate to Rs 574.673 million by the mid-1990s.<ref name="auto2"/>

In June 1993, Ittefaq Foundries utilized a letter of credit for Rs 310 million to import shredded steel scrap from the U.S., paying only five percent of its value.<ref name="auto2"/>

==Ittefaq Foundries reference case== On February 14, 2000, the National Accountability Bureau (NAB) filed a reference against the owners of Ittefaq Foundries, including Mian Muhammad Sharif, Nawaz Sharif, and Shahbaz Sharif, for failing to repay a loan of PKR 1.06 billion owed to the National Bank of Pakistan (NBP).<ref name="auto1">{{Cite web|url=https://tribune.com.pk/story/788789/ittefaq-foundries-case-sc-reserves-judgment-over-release-of-guarantor|title=Ittefaq foundries case: SC reserves judgment over release of 'guarantor'|first=Hasnaat|last=Malik|date=10 November 2014|website=The Express Tribune}}</ref><ref>{{cite web | url=https://www.nytimes.com/1999/11/15/world/pakistan-lists-loan-defaulters-including-kin-of-ousted-premier.html | title=Pakistan Lists Loan Defaulters, Including Kin of Ousted Premier | work=The New York Times | date=15 November 1999 }}</ref> This followed a complaint lodged on December 10, 1999, by the bank's zonal chief and manager at Wapda House, stating that the company had defaulted on payments since 1994.<ref name="auto1"/> Despite Nawaz Sharif's 1998 pledge to liquidate assets to settle his family's debts, a significant liability remained.<ref name="auto1"/> Following the military coup in 1999, Nawaz Sharif was exiled, complicating recovery efforts.<ref name="auto1"/> NAB arrested Mukhtar Hussain, a director of Ittefaq Foundries and a named guarantor for the loan.<ref name="auto1"/> His arrest was contested in the LHC, which eventually ordered his release—a decision later challenged by NAB in the Supreme Court of Pakistan.<ref name="auto1"/>

In 2012, NAB informed the Lahore High Court (LHC) that the Sharif family had defaulted on loans totaling Rs 3.8 billion.<ref name="auto">{{Cite web|url=https://www.dawn.com/news/755282/sharif-family-defaulted-on-rs3-8bn-loan|title=Sharif family defaulted on Rs3.8bn loan|first=A.|last=Reporter|date=9 October 2012|website=DAWN.COM}}</ref> By December 2011, the family's outstanding debts included Rs 2.31 billion owed to the NBP, Rs 336 million to Habib Bank Limited, Rs 343 million to United Bank Limited, Rs 456.1 million to Muslim Commercial Bank, Rs 202 million to First Punjab Modaraba, Rs 95 million to Bank of Punjab, Rs 60 million to Zarai Taraqiati Bank Limited (ZTBL), Rs 27 million to NIB Bank (formerly PICIC), and Rs 8 million to the International Commercial Bank of Pakistan (ICBP).<ref name="auto"/>

In November 2014, after 15 years, the Supreme Court revisited the case. During the proceedings, NAB's counsel argued that the LHC's ruling hindered ongoing corruption investigations and pushed for its reversal, citing legal precedents that supported cases against guarantors of defaulted loans.<ref name="auto1"/>

In May 2015, Judge Sohail Nasir of the Accountability Court in Rawalpindi acquitted Nawaz Sharif, Shehbaz Sharif, and other family members in the Ittefaq Foundries case.<ref name="auto3">{{Cite web|url=https://www.thenews.com.pk/print/12729-sharifs-acquitted-in-ittefaq-foundries-loan-case|title=Sharifs acquitted in Ittefaq Foundries loan case|website=The News International}}</ref> The court dismissed the National Accountability Bureau's plea to reopen the investigation, citing that the matter had been resolved with the National Bank of Pakistan.<ref name="auto3"/> The judge noted that the allegations against the foundry appeared to be politically motivated and confirmed that there were no outstanding disputes between the Sharif family and the bank.<ref name="auto3"/>

== References == {{Reflist}}

{{DEFAULTSORT:Ittefaq Group}} Category:Manufacturing companies based in Lahore Category:Steel companies of Pakistan Category:Sharif family Category:Manufacturing companies established in 1970 Category:Defunct manufacturing companies of Pakistan Category:Manufacturing companies disestablished in 2004 Category:Mergers and acquisitions of Pakistani companies Category:2004 mergers and acquisitions Category:Pakistani companies disestablished in 2004