The Supreme Court in May found massive illegalities in lands acquired by Real Estate Tycoon Malik Riaz and his firm Bahria Town Ltd. for housing projects in Karachi and Rawalpindi, and declared them illegal; The court also considered the interests of those people (includes overseas Pakistanis) Bahria Town had already sold the land to, and setup financial controls to protect the interests of home-buyers and investors.
ISLAMABAD/KARACHI; Dec 8, 2018 — Last night lights of the Bahria Town Karachi (BTK) were turned off due to financial crunch the real estate development company owned and operated by tycoon Malik Riaz is facing as the inflow of Bahria’s cash is in the control of the Supreme Court, reported The Express Tribune.
The report said some 45,000 employees of the Bahria Town may face delays in their salaries. Contractors are also not getting paid by the developer and various contracts worth millions of rupees have also been cancelled.
Hundreds of subcontractors and construction materials’ vendors and suppliers are also facing non-payments from the developer.
All restoration and development work by the developer has come to a halt. For work to continue, the Bahria Town says it desperately needs funds. These funds are awaiting the SC’s verdict, ET reports. Till then all projects of the Bahria Town will remain closed, the report said.
In October, the top court asked Bahria Town (Pvt) Ltd to come up with proposals on how to implement its May 4 judgement declaring illegal the exchange of lands between the Malir Development Authority (MDA) and the property tycoon for development of the BTK housing scheme.
Around 165,000 investors–local and overseas, are members of the Bahria Town.
A three-judge implementation bench said the court intended to take an option which should be least painful to the parties. But it hastened to add that it depended on the reasonableness of the proposals to be put forth by the Bahria Town on the implementation of the verdict.
“We have to implement the judgement but how it is implemented depends upon the parties,” the bench observed.
According to market observers and media reports, real estate in general is witnessing a dip (8 to 10%) after the landmark verdict against Bahria for massive land grabbings and NAB’s ongoing probes against unregistered builders, developers and housing societies.
Pakistan’s real estate industry has an investment of approximately USD20 billion with potentials exceeding $800 billion according to and estimate. It is also considered black hole of the economy.
According to Dawn, the country’s property market has long been known as a major parking lot for black money, money-laundering and tax evasion.