PAC body told; CCP fails to recover Rs27bn penalties as cartels get stay orders

The Auditor General of Pakistan (AGP) has informed the Public Accounts Committee that the Competition Commission of Pakistan (CCP) has failed to recover Rs27 billion penalties imposed against fertiliser, sugar, poultry and cement industry cartels since 2008.

The senior officials of the AGP informed this while briefing the subcommittee of the PAC held under the chairmanship of Syed Naveed Qamar to discuss and review audit objections against the Ministry of Finance and attached departments of year 2016-17.

The AGP officials, while responding to the question of committee member, Sardar Ayaz Sadiq regarding such a huge amount of outstanding penalties, despite the passage of over a decade, said this included Engro group, cement manufacturing industry, sugar industry, and the poultry industry.

The committee members questioned the CCP's failure to recover the amount, and asked why the commission failed to recover the amount?

The CCP officials briefing the panel said soon after the imposition of penalties against the above cartels they went to the Lahore High Court (LHC), and acquired stay orders from the court of Justice Ayesha Malik, since than, the case is pending there. Member Committee Ayaz Sadiq recommended to the panel to transfer the case from the court of Justice Ayesha Malik to another judge, saying that she was "controversial".

The CCP officials said that a total 163 people of various cartels were defaulting the penalty payments, of which 80 percent amount was outstanding against 17 people.

The CCP officials further said eight persons of cement cartel, two telecom cartel, Engro corporation, Poultry Association of Pakistan, and the Pakistan State Oil were included.

The committee directed the secretary Finance to personally look into the matter by making all out efforts for the early fixation of the case in the LHC, so that the huge amount of Rs27 billion could be deposited in the national kitty, and people involved in such activities could be punished.

The panel was further informed by the AGP officials that an amount of Rs2.5 billion of the CCP was outstanding against different regulatory bodies such as the Oil and Gas Regulatory Authority, the Pakistan Telecommunication Authority and the Pakistan Electronics Media Regulatory Authority.

They said that those regulatory bodies as per law were bound to deposit three percent on account of fees and other charges to the CCP on annual basis but since long they were not depositing the amount, which had now amounted to Rs2.5 billion.

The panel directed the officials concerned to recover the outstanding amount from the defaulter regulatory bodies and in future no delay should be tolerated.

The PAC also directed the CCP to recover Rs3.407 million from its members who received the amount in violation of their approved pay packages.

The audit officials told the committee that rule 4(2) of the CCP, "Salary, Terms and conditions of Chairman and Members - Rules, 2009" states that the salary of the members shall be fixed at median of MP-I scale, they shall be entitled to annual increments earned in the normal course in terms of the MP-I scale.

The management of the CCP paid an amount of Rs3.407 million to the members of the commission appointed against package MP-I scales approved by the government.

The management replied that all the expenditure under various heads to the members was made under the CCP's service manual.

The committee rejected the CCP's reply in their defense and inquired about the whereabouts of the members.

The CCP official told the committee that at the moment, two members were still working in the CCP, whereas one left for Canada after the expiry of his three-year term, one was working somewhere in government setup, and one was at home.

The committee directed to serve the notices to all five members for recovery and present a compliance report to the committee within 30 days.