The Supreme Court was informed on Wednesday that according to external auditor's forensic report, losses of Pakistan Steel Mills (PSM) have been reined in on the court's action. A two-member bench comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Ghulam Rabbani was hearing a suo motu case of Rs 26 billion corruption in PSM.
Justice Chaudhry observed that the court is trying to eradicate corruption from public sector organisations as was evident from the improvements made in PSM case, but a lot was needed to be done to bring it out of the quagmire. "If the court had not taken suo motu notice of the embezzlements made in PSM, the accused might have been wandering around scot-free," he remarked.
Secretary Ministry of Industries and Production Abdul Ghaffar Soomro informed the court that according to the external auditor forensic report, PSM losses were decreasing and credit for this achievement certainly goes to the apex court. He said losses in 2008-09 were Rs 26.5 million, while in 2009-10, these were brought down to Rs 11 million and from July 2010 to December 31, 2010, it incurred Rs 5.7 losses which was certainly less than the previous fiscal year's.
The court directed the secretary to ask the audit firm to submit interim report within one month. The secretary further informed the court that they had submitted a summary of a bail-out package to the government, but it has not yet been approved. However, a committee has been formed for the restructuring of PSM, he said, adding that high prices of imported raw material, low capacity yield, exchange differences and fluctuation in freight charges were the main factors behind PSM losses.
He said that Rs 13 billion losses were caused due to higher prices of raw material. Besides, notices were issued to dealers and the Pakistan National Shipping Corporation of Pakistan for overcharging in case of freight, he added. The chief justice said the measures taken so far would help in the recovery of not more than Rs 500 million, while the losses were in billions. When the CJP inquired from the secretary, "you mean to say the PSM management was not responsible or this was some ulterior motive," Mr Soomro said that there is no doubt that the PSM management was involved.
The CJP questioned it was also reported that the PSM ex-chairman himself was at once acting as a dealer of the mills and directed that anyone involved in criminal negligence should be dealt with in accordance with law. The secretary told the court that earlier the chief executive officer of PSM used to be chairman of mills board of directors but now things have changed board's chairman is elected by the members.
Fakharuddin G Ebrahim, counsel for PSM, told the court that still the mills is suffering Rs 2 million losses per month, while the recovery of Rs 25million have been made on issuance of notices to dealers. The court observed that no visible progress has been made by FIA in its report. The chief justice asked director FIA Sindh, Moazzam Jah to inform the court about the progress of the task assigned to him instead of quoting figures from the external auditor's report.
When Moazzam told the bench that the agency had registered 10 FIRs against the accused, the CJP said the agency was narrating these facts for the last one year and asked him what further action had been taken against the culprits. The court ordered FIA to continue the investigation in the case. The case was adjourned for one month.
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