When Pakistan lost the Hyderabad Fund’s court case against India and the Nizam of Hyderabad’s heirs in October 2019, it may have been an unexpected shock for many, but in reality, it was the culmination of a series of blunders, mishandlings and sheer acts of incompetence. Reportedly, a confidential probe has been underway ever since, but far from public view and with no clear purpose. Unfortunately, there also seems to be a major effort in the works to save the main architects of this great national loss of prestige and precious foreign exchange.
As per the decision of the Royal Courts of Justice in London, authored by Judge Marcus Smith, Pakistan not only lost the right to Nizam of Hyderabad’s 35 million pounds (including accrued interest) deposited with Pakistan High Commission in 1948, but was also asked to pay the legal cost of over seven million pounds, which Pakistan readily agreed to pay. In fact, it has already been paid up mostly, in a hushed-up manner from resources meant for welfare of Overseas Pakistanis.
While a low-key investigation is being carried out, sources in the Foreign Office and elsewhere reveal that an attempt is being made to save the neck of the leading characters of this unfortunate saga. That includes no less than the incumbent Pakistani High Commissioner to the United Kingdom, Nafees Zakaria, who is set to retire in summer 2020.
He’s the same diplomat who had created a sensation in October 2018 when only after a short stint in Malaysia as high commissioner, he was appointed as envoy in London, over the head of much more senior and accomplished colleagues who were actually in the posting zone instead of him. While as per rules, foreign service officers are posted from one diplomatic mission to another after a minimum stay of three years, it is also kept in view as to how much service they are left with. Anyone with less than a year and a half of service left is not generally considered for another posting abroad.
On all counts, Zakaria should have completed his three years in Kuala Lumpur and retired under normal circumstances. But it is common knowledge in the Foreign Office that a stellar sifarish had been the cause of his miraculous posting to London. Ironically, that also meant that Zakaria would give final touches to a national fiasco of which he himself had been one of the principal architects of along with a former high commissioner back in 2013.
Zakaria was serving as Director-General for South Asia Division in the Foreign Office at the time. He had come back from London after working in the high commission as Minister Political (last three months of his posting as deputy high commissioner). He reportedly proposed an unwise and highly risky course of action on the Hyderabad Fund Case, whereby Pakistan waived the state immunity that it had claimed since decades, and that had been accepted by the courts all the way to the British Privy Council. This immunity had resulted in a freezing of the case giving Pakistan the time to come up with a sound alternate strategy. Instead, Pakistan filed a claim of beneficial interest to the money, that at the time was lying with National Westminster Bank, to the exclusion of the Nizam’s heirs which resulted in a withdrawal of the immunity. After winning the case, many Indian observers termed it ‘a shot in one’s own foot’.
Let’s recall a brief timeline of the case. In 1948, Osman Ali Khan, the Nizam of Hyderabad, deposited over a million pounds in the then Pakistani High Commissioner to London, Habib Ibrahim Rahimtoola’s account fearing Indian aggression. After the state was annexed by India, the Nizam was forced by the Indian government to file a case in the UK in 1954 for releasing the money with accrued interest. Pakistan invoked state immunity in response which was accepted by the British court of law.
In the 1960s, the Nizam appointed his grandsons as trustees to a fund to which the disputed sum of money was to be tied to once, if ever, it was released.
In 2008, the heirs of the Nizam including those residing in Istanbul, offered the Government of Pakistan a settlement as per which the proceeds could have been divided, perhaps equally, by the two parties. That would have been the wisest course of action and should have been accepted. But unfortunately, it wasn’t chosen by the government at the time. The heirs then turned to the Indian government and an understanding was arrived at between the two sides to share the proceeds if they won the case. Accordingly, they joined hands in the case against Pakistan.
In 2013, as per sources, based on a proposed course of action by Nafees Zakaria, in his capacity as DG South Asia Division, Pakistan took the highly risky step by suing the National Westminster Bank, the custodian of the Nizam’s Fund, thus waiving off the sovereign immunity it invoked decades ago with a trial ensuing subsequently. As mentioned earlier, Zakaria had then recently returned to the Foreign Office after serving in London and was quite familiar with the case.
On taking charge as Pakistan’s High Commissioner to the UK in January 2019, Zakaria personally oversaw matters pertaining to the Hyderabad Fund Case and supervised the legal endeavour mounted by Pakistan, reportedly, in a haughty, disorganised and unyielding manner. Creating chaos in the process. But when the most embarrassing and penalising court decision was announced against Pakistan, he changed tack and started blaming the authorities in Islamabad for the debacle.
In an interview that I conducted of him in London during October 2019 (published in November 2019), he spent a significant amount of time projecting himself and building a case for his extension beyond retirement. But when he was asked about the Hyderabad Fund Case debacle, he laid all the blame on the concerned authorities in Islamabad as if he had no role in the historic debacle at all.
As per my probe, the penalty imposed by the Royal Courts of Justice is being paid by the Government of Pakistan from the funds collected by those embassies abroad that have the largest concentration of Overseas Pakistanis.
These are out of the funds marked for improving/maintaining diplomatic stations and facilities called FIGOP, or the funds reserved for the welfare of Pakistanis abroad called PCW & EF. These embassies have been asked to pay a big portion of their savings of several years under these heads of accounts to the Pakistan High Commission London to pay for the folly of those known for their extraordinary connections. So much for the welfare of Pakistanis abroad!
When I inquired upon the funds case with the Foreign Office’s spokesperson Aisha Farooqui recently, she just beat around the bush and did not offer any comments other than that she’ll get back on it.
This is nothing new. This is the tragedy of Pakistan where sifarish/nepotism trumps merit and incompetents with the right connections prosper at-large. In all eventualities, it’s the country and the masses who suffer in the process.
It’s not only that public funds amounting to billions of rupees (in this case in foreign exchange) meant for welfare are liquidated by mismanagement and non- transparency, but also the public’s right to know gets violated when such fiascos are hushed up.
Every time it’s the country in the end that has to pay for the incompetence of the sifarishees. In this case, instead of getting at least half of the amount of 35 million pounds at a time when Pakistan is desperate for earning foreign exchange; and possibly using it for welfare of Overseas Pakistanis, it ended up losing not only all that money but also requiring to pay an extra seven million pounds from the precious savings of money received from Overseas Pakistanis. A sum meant for their welfare, directly or indirectly. The beauty of it all this is that those responsible have not even been named yet.
No wonder we are where we are. But does this state of affairs have a place in ‘Naya Pakistan’ that Prime Minister Imran Khan promised to this nation? What about the promises committed to Overseas Pakistanis? What about the vows of transparency and rule of merit?
The prime minister is requested that this matter of national importance be inquired upon at the highest possible level and full facts be brought out before the public for transparency and justice.
The writer is Associate Editor (Diplomatic Affairs), Daily Times. He tweets @mhassankhan06
