Mujeeb Ullah Khan graduated from Peshawar University and after a few months of applying to dozens of

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Mujeeb Ullah Khan graduated from Peshawar University and after a few months of applying to dozens of organizations, he was finally selected as a management trainee officer (MTO) in FATA Bank Ltd. After the initial training, he was inducted into the credit department and due to his extrovert nature and social skills, he became friends with most of the senior bank staff. He quickly rose the ladder of progression and within 3 years became the Branch Manager of the Khyber Agency Branch. Mujeeb became popular in the area due to his accommodating nature and expeditious processing of loan applications. He also took care of his special clients by throwing parties and therefore, developed friendships with the rich and powerful. He became hubristic and began facilitating friends, disregarding the State Bank of Pakistan’s guidelines and procedures ensuring due diligence. Resultantly, many of his processed loans turned into bank defaults and the FATA Bank initiated an enquiry against him. The enquiry commission held Mujeeb Ullah Khan responsible for the unscrupulous transactions, recommended employment termination with confiscation of all benefits, and imposed a fine of rupees one million.

Mujeeb Ullah Khan was discharged unceremoniously but he carried this inclination to use unlawful means to make money and live a luxurious life. He would boast in his circle of friends that he would become a billionaire and set up his own bank. His flamboyant lifestyle, seemingly lucrative bank career, penchant for designer suits, articulation and mannerism, impressed many around him. He convinced 6 of his friends to join hands and register a financial services company which would circulate cash investments and solicit high-end clients. They got together and registered Infinity Financial Services XYZ (Pvt.) Ltd. with SECP. They rented a whole floor in the upmarket Zargoon Plaza, engaged an interior designer and furnished a lavish office. They hired uniformed armed guards, English-speaking university graduates and a cook from Pearl Continental, Peshawar. Mujeeb purchased a new non-custom-paid, fully loaded Land Cruiser through his contacts in Khyber and the other directors had their own luxury vehicles. His outer circle of friends got extremely impressed with the optics of his business and kept on requesting Mujeeb to take their money as an investment. Resultantly, Infinity Financial Services XYZ (Pvt.) Ltd introduced 3 financial products:

(A) Portfolio/Managed Accounts: where the client deposited their amount on the basis of 3 to 4 percent fix profit margin per month.

(B) Trading Accounts: where the investment was made on profit and loss basis, with a loss of up to 10% per month.

Mujeeb Ullah developed a strategy with his company directors that each of them would, by hook or crook, collect 150 million rupees each by enticing investors to the 3 main financial products of the company. He also offered high commission rates to his company employees to get clients and investments. IFS began throwing a series of parties in a lavish rented house in the poshest area of Peshawar. The visuals of IFS enticed and entrapped many individuals and the money started pouring into the company. For the first two years, it seemed as if all the dreams of Mujeeb were materializing. Investors were getting their high percentage returns and IFS had opened up two more branches in Abbottabad and Mardan. Plans were being made to start IFS Bank. But then, suddenly, things began to change, when one of their largest clients pulled out his investment. A few jittery employees also advised their clients to pull out of the company and a run on the accounts ensued. Mujeeb Ullah Khan tried to control the situation by giving assurances. In a few months, the whole set-up collapsed, and all the IFS directors went into hiding. Many of the IFS affectees approached the National Accountability Bureau. A case was instituted and investigations initiated. The IFS directors were on the run, their families devastated, homeless and with many investors giving death threats. Mujeeb Ullah was finally arrested from Karachi and arrest warrants were issued for the IFS directors and the top employees of the company. What seemed like a fairy tale rise to success, crumbled to the abyss of oblivion and disaster?

Questionnaire

1. Identify the mistakes of Mujeeb Ullah Khan. [4]

2. Relate the concepts studied in the course (at least 4-5) to the doings of Mujeeb Ullah Khan. Establish conclusions based on the concepts. [15]

3. Being an ethical person, compare yourself to Mujeeb Ullah Khan and explain YOUR actions if you were in place of him? [5]

4. Identify the wrongs in the three financial products of IFS XYZ limited. Being an ethical professional, re-formulate those financial products. [6]