Civil Services Academy Director General Fawad Hassan Fawad was placed under arrest by the National Accountability Bureau (NAB) on Thursday for his alleged involvement in the Rs14 billion Ashiana-i-Iqbal Housing Scheme scam, DawnNewsTV reported, citing a NAB source.

NAB launched an investigation into the scam in November after receiving a number of complaints regarding an illegal deal involving 3,000 public kanals between the Punjab Land Development Company (PLDC), a company owned by the government, and private companies.

Fawad, the former principal secretary to ousted premier Nawaz Sharif, who appeared in court today, had been directed to provide documentary evidence to defend himself against allegations that he had played a role in awarding a contract to a firm in violation of rules.

Fawad ─ who in 2013 had allegedly pressurised the PLDC chief executive officer (CEO) Tahir Khursheed and Project Director Ali Moazzam to cancel the Ashiana contract with M/S Chaudhry Latif and sons, and award it to a ‘favourite’ firm ─ was serving as implementation secretary to then Punjab chief minister Shahbaz Sharif.

Fawad allegedly concealed the inquiry committee report declaring the award of the contract to M/S Chaudhry Latif and Sons as per the Public Procurement Regulatory Authority rules.

Due to allegedly illegal cancellation of the contract, the government had to pay Rs5.9 million in damages to the contractor. The cancellation of the contract also delayed the project, resulting in cost escalation of billions of rupees.

The NAB had also quizzed Shahbaz Sharif earlier for cancelling the contract to the successful bidder, M/S Chaudhry Latif and Sons, and instead obliging M/S Lahore Casa Developers ─ a proxy group of M/S Paragon City (Pvt) Limited ─ thus causing a loss of millions to the exchequer.

An official source earlier told Dawn, "The PLDC had assigned the low-cost housing scheme of the Punjab government to the Lahore Development Authority (LDA) through an agreement in January 2015. Ahad Cheema, being LDA DG, awarded contract of the project of Rs14bn ‘illegally’ to M/S Casa Developers, a joint venture of three firms M/S Bismillah Engineering Services Co, M/S SPARCO Construction Company and M/S China First Metallurgical Group Co Ltd. The contractor wilfully failed to initiate Ashiana-i-Iqbal project over the past three years."

The NAB had earlier filed a reference against the former LDA DG, Cheema, and others for allegedly misusing his authority and getting a fraudulent and illegal request approved by awarding the contract of the Ashiana project to M/S Lahore Casa Developers. He is currently in jail on judicial remand.

Munir Zia and Umer Zia, brothers of Paragon City CEO Nadim Zia have also been arrested. Nadim has reportedly fled the country to evade arrest.

NAB officials said the brothers were business partners in Bismillah Engineering Services which had been engaged in the construction of the low-cost housing scheme of the Punjab government in January 2015.

The PLDC had signed an agreement with Bismillah Engineering and SPARCO for the construction of 6,700 apartments on 1,000 kanals of land.

In lieu of this construction, some 2,000 kanals were to be given to these two companies corresponding to their construction work. The land was given to these companies without them having carried out construction work at all.

Ahad Cheema's brother-in-law Mansoor Ahmad, cousin Ahmad Hassan, LDA official Sajjad Bhutta, LDA chief engineer Israr Saeed, former PLDC head Imtiaz Haider, PLDC Member Technical Land Financial Allocation Committee PLDC Arif Majeed Butt and its consultant Bilal Qidwai are also in custody.

The NAB source said Fawad had been summoned six times but had joined the investigation only twice.

NAB officials reportedly received approval from higher-ups to arrest Fawad, and subsequently took him into custody within the bureau's premises when he failed to satisfy officials probing his alleged involvement in the case.

Fawad is also suspected of involvement in a case pertaining to the purchase of six mobile health units at exorbitant rates during his time as Punjab health secretary.

The former aide to the Sharif brothers was also allegedly employed by Bank Alfalah although his request had been declined by the secretary establishment, and Sprint Energy (a JS Group subsidiary), where he allegedly prepared fake no-objection certificates for a transfer of site of a CNG pump from one district to another.

2nd case against Fawad

According to a NAB official, the anti-corruption watchdog's Rawalpindi office has opened a second case against Fawad in which he is accused of constructing a mega mall in the heart of Rawalpindi. The value of the property is said to be over Rs12 billion. The construction of the multi-storey plaza is almost complete.

The complainant in this case has asked how a grade-21 officer (Mr Fawad) has managed to construct and own such an expensive property. It has been claimed in the complaint that nine of the 10 floors of the building are owned by Fawad and his brother, who allegedly used their influence to secure financing from JS Bank Limited for the building’s construction.

The complainant claimed that Fawad and his brother got the commercial plot — located opposite the GPO in Sadar — in exchange for a residential plot on Rawalpindi’s Haider Road.