Why there was no action after receipt of report on PSM: Supreme Court asks Secretary Industry & Production

The Supreme Court Tuesday ask federal Secretary Industries and Production to explain why action was not taken following receipt of a forensic audit report identifying those involved in a Rs 26.5 billion loss to the Pakistan Steel Mills (PSM). A three-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Khilji Arif Hussain and Justice Tariq Parvez resumed the hearing of a suo motu case regarding corruption in PSM carried out by former chairman of the entity.
At the outset of the hearing, counsel for PSM Fakhruddin G Ebrahim submitted a forensic audit report for 2008-2009, prepared by M/S Avais Hyder Liaqat Nouman (AHLN), showing accumulative losses of Rs 26.5 billions in Pakistan Steel Mills. Ebrahim apprised the bench that the PSM lost Rs 4.68 billion in business, Rs 9.98 billion on account of corruption and Rs 11.84 billion due to mismanagement. Five enquiries were initiated by the FIA in the matter but no case was registered so far, he further told the bench.
Ebrahim maintained that former chairman PSM never spent a single day behind bars, adding that the day he was arrested, he declared himself ill and he was therefore sent to hospital. The counsel suggested that National Accountability Bureau (NAB) could be assigned the task to look into the matter and recover money from the accused.
During the proceedings, Barrister Zafrullah Khan, the petitioner, contended that losses were greater than those revealed through the forensic audit report and was asked by the bench to assist the court in the matter. "Yes he should come and share his findings," the PSM counsel added.
Chief Justice Iftikhar Muhammad Chaudhry observed that "first we saved the state-owned entity from privatisation and now it has suffered a huge loss". According to him, corruption has ruined Pakistan International Airlines (PIA), Pakistan Railways and Pakistan Steel Mills. "The country is being ruined," the CJP remarked. The Secretary Ministry of Industries, Gul Muhammad Rind, informed the court that he was appointed to his post only recently. Justice Khilji Arif Hussain remarked that "everyone makes such remarks before the court." "This is our country, it does not belong to a particular class," Justice Khiliji observed. Justice Tariq Pervez noted that in order to save the ''robbery'' in PSM a huge amount of Rs 30 million was paid for the forensic audit report submitted before the bench. "The thieves are the watchdogs as well," he remarked.
The Chief Justice asked Secretary Industries - why action was not taken immediately after the receipt of Forensic Audit Report by the Ministry. The Secretary replied that the Ministry was contemplating referring the matter to the National Accountability Bureau regarding all the cases which were earlier registered by the FIA and enquiries which are pending with the FIA. The Chief Justice, however, observed that the whole nation knows the real status of FIA.
"This is a classical case of corruption and we know how big fish are involved in this cesspool corruption," the Chief Justice remarked, adding that FIA could not take action against those involved in the case. "Mismanagement occurred in the PSM as the Ministry of Industries failed to appoint honest and efficient officials in the state-owned entity," Justice Khilji Arif Hussain observed.
The Chief Justice noted that at the end of the day the concerned Minister was responsible for the huge loss. Meanwhile, the bench directed Secretary Ministry of Industries and Production to explain on the next date of hearing the reasons behind the failure of the Ministry for not initiating action promptly following the receipt of the Audit Report.
"Prima facie, it has been established that a huge loss has been caused to Pakistan Steel Mills, which is the mother industry of the country, on account of corruption and corrupt practices, business losses and mismanagement," the court ruled in its order, adding that undoubtedly all these three components were interlinked. Later, the court adjourned the hearing till March 15.