Steel bar makers protest against alleged harassment by FIA: Supreme Court approached

Pakistan Steel Re-Rolling Mills Association (PSRMA), registered since 1962, is the only association representing re-rollers making steel bars in the country. Our members, manufacturers of bars (sariya) can use various raw materials of which one is Pakistan Steel Mills Billet (long products).
We represent around 450 re rolling units across the country and approximately 70 of these use billets as their raw material, which they buy from three sources, including Pakistan Steel Mills (PSM). The three sources are imports, local melting furnaces and Pakistan Steels. Pakistan Steels accounts for about 8-10% of the total steel market.
"Your honour, on your initiative, FIA constituted an enquiry regarding losses in PSM and submitted a report on June 25-2010 in which your honour gave them time of three weeks to recover the misappropriated amount", said the PSRMA. In this context, the PRSMA said, we are sending to the apex court the following information:
"PSRMA representatives have been summoned by management of Pakistan Steel Mills (PSM) twice in July 2010. The purpose of the meeting as per PSM was to assist FIA in dealing with the recovery of dues as ordered by the Supreme Court of Pakistan in its suo moto notice (dated). PSM, in turn, sent the members of PSRMA to the FIA.
"In the course of discussion with PSM and representatives of the FIA, we were told that the FIA was under great pressure from the Supreme Court to deliver results in the follow-up to the judgement (ie to show some recovery of dues) and in this regard, they proposed to open an investigation against each and every of our members who, had had a business relationship with PSM during the period under review. Alternatively, we could just devise a plan and pay money to the exchequer towards "recovery" in order to prevent the opening of cases against our members. Our representatives were bewildered at having to come up with arbitrary solutions to an issue which they had no part in making.
"Sir, we would like to bring to your kind attention the following facts: "1) Pakistan Steel being the foremost supplier of good quality billets in the country which had active tariff protection from the import of billets up until 2004/05, many of our members have had long-term relationships/contracts with PSM for the supply of billets. This has been so more or less since the inception of Pakistan Steel around 1983.
"2) Our members (who are consumer dealers of PSM) have no say on price fixation and allocation of billet as this is entirely at the sole discretion of PSM. Each long term consumer dealer of PSM, (most of whom are our members), received billets as per sales policy of PSM, at their prices, according to their allocation and as per availability. The bars we produce from that material is sold to general public after adding our conversion cost and reasonable profit. As per the policy of the Steel Mill consumer dealers can only use PSM billets for in house consumption and are barred from selling this material on. So where a loss has been occasioned to Pakistan Steel on account of bad policy or pricing our members cannot be held responsible.
"3) We understand that the purpose of the court cases being judged by the Supreme Court was to cause the FIA to investigate any company that had taken undue benefits/business from the Steel Mill. Or had expressly been accorded favours outside the policies of Pakistan Steel M ills. We would attempt to define undue benefit as business that was conducted under terms that were: (a) either not generally publicised or (b) not available to normal customers/suppliers or (c) way in excess of what the history of that parties previous dealings with PSM warranted.
There may be other criteria that could define such business that has caused major loss to PSM such as bad or dishonest management decisions but we cannot be held responsible for that.
" 4) We would humbly suggest that if the Supreme Court intended action to be taken against each and every party that had had any kind of customer relationship with PSM this would cause harassment to a great many businesses that had received absolutely no undue advantage or favour from PSM and had not occasioned any malicious loss to the country.
"5) The vast majority of consumer dealers had their allocations drastically cut during the periods of mismanagement and suffered by having to quickly find substitute sources of supply since deliveries from PSM were abruptly diverted to a few parties or to trader dealers.
"6) We also believe that the management of PSM are in the best position to highlight those parties who would satisfy some logical criteria for wrongdoing (as noted in 2 a) to c) since they have all the transactional paperwork in front of them and took all the decisions to award contracts, goods, deliveries etc. We also believe that PSM management would be best placed to identify those periods when clear favouritism in allocations and terms were occurring - this could be the basis for working out some formula for recovery.
"7) We will not support any member of ours who is shown to have manifestly had dealings with PSM which gave them benefits not available to regular clients - we offer full support to the judiciary in its Herculean task of trying to bring cleaner governance to Pakistan.
"Our prayer to the Supreme Court is that it gives the FIA clear-cut guidelines not to harass customers of PSM simply on the basis of their having had some kind of contractual customer relationship with them. Otherwise we fear that the judgement of the Supreme Court, instead of bringing good to the nation, will be manipulated to harass and shake down long-term customers of Pakistan Steel simply on those grounds without taking into account the fact that many of those customers suffered under the mismanagement of Pakistan Steel by having their allocated quantities cut drastically etc. Many of these same customers patently refused to increase their dealings with Pakistan Steel at that time since they wanted no part of the bad dealings.
"If it be that a recovery package (to revive PSM) is worked out on the basis of including each and every party that had any kind of customer dealing with PSM during the period in which the most mismanagement occurred, then there should be a way of separating and describing those who were clear beneficiaries of undue and large favours from PSM management from those parties who just had a continuation of their regular relationship with PSM but for vastly reduced quantities (ie they suffered discrimination). Why should customers of PSM be harassed and maligned simply because they were customers no matter how small, a proportion of the customer base they represented in terms of volume?
"We plead for clear-cut and just guidelines to the FIA and PSM and for injustice not to be perpetrated on those who already lost out due to the mismanagement and corruption at Pakistan Steel."-PR