Mehran Bank scandal

Mehrangate, also known as the Mehran bank scandal, was a major political scandal in the history of Pakistan in which officers in the Pakistani Army and Inter-Services Intelligence conspired to prevent the re-election of Benazir Bhutto's government in the 1990 and 1993 general elections. The conspirators bribed senior politicians and political parties to undermine the Pakistan Peoples Party (PPP).

Initiated by Pakistan Army's Chief of Army Staff General Mirza Aslam Beg with the alleged support of President Ghulam Ishaq Khan, payments of up to PKR 140 million were made by the Inter-Services Intelligence (ISI) Director-General Lieutenant-General Asad Durrani and Corps of Engineers Engineer-in-Chief Lieutenant-General Javed Nasir via the owner of Mehran Bank, Yunus Habib. Intelligence funds were deposited in Mehran bank in 1992 propping up what was an insolvent bank as a favor to its owner's for help in loaning money to the Inter-Services Intelligence in 1990 that was used in the creation of the right wing alliance Islami Jamhoori Ittehad (IJI) and bankrolling the campaigns of many opponents of the PPP.

The scandal subsequently broke after the new ISI Director-General Lieutenant-General Javed Ashraf Qazi decided to transfer the intelligence fund back to state owned banks as per official rules. Mehran Bank was unable to return the money due to its poor financial state and collapsed. It was later discovered that large sums had been siphoned off to 39 fictitious parties.

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Wikipedia