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Last Updated: Thursday, 25 October 2007, 08:42 GMT 09:42 UK
Pearl widow abandons bank lawsuit
Daniel Pearl
Daniel Pearl was kidnapped and beheaded in 2002
The wife of murdered US journalist Daniel Pearl has dropped a lawsuit against one of Pakistan's largest banks, Habib.

Mariane Pearl filed the case in July, saying the bank had transferred funds to an Islamic charity which she alleged was linked to her husband's death.

Habib bank denied the allegations. It is not clear why Ms Pearl has withdrawn the case.

Daniel Pearl was abducted in Karachi in January, 2002, and later beheaded.

He was working for the Wall Street Journal on a story about Islamist militants.

British-born militant Ahmed Omar Saeed Sheikh has been sentenced to death in Pakistan for his role in the abduction and murder.

The US says the man alleged to have masterminded the 11 September, 2001, attacks in America, Khalid Sheikh Mohammed, has told investigators that he carried out the actual beheading.

Ms Pearl had included both men and al-Qaeda in the lawsuit.

'Totally wrong'

It has emerged that on Tuesday Ms Pearl informed the US court dealing with the case that she was dropping the action.

Ahmed Omar Saeed Sheikh
Ahmed Omar Saeed Sheikh was sentenced to death for the killing

No reason was given to the court.

Later her lawyers told the Reuters news agency that: "The withdrawal was done for personal reasons that had nothing to do with the merits of the lawsuit".

Habib bank has always rejected the allegations.

"This is totally wrong," Zafar Aziz Osmani, the bank's senior executive vice president, told the Reuters news agency in July.

"As an institution, we have never been involved in supporting any terrorist organisation."

Mr Osmani said that at the time of the murder, the bank was owned by the government of Pakistan, "which cannot be involved in such activities".

He said the allegations filed by Mariane Pearl in New York were not substantiated by any evidence.

In the original court documents filed in New York, Mrs Pearl alleged that the Karachi-based Habib Bank knowingly conducted financial transactions on behalf of the al-Rashid Trust which, she said, was linked to "terrorist groups".

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