Talks between Pakistan Steel Mills (PSM) management and dealers have failed as the management is reluctant to assure the dealers of withdrawal of National Accountability Bureau (NAB) notices. The PSM has also faced an estimated loss of Rs 2 billion on account of sales during this month owing to the boycott.
Sources told Business Recorder on Monday that the dealers have started products boycott some three weeks ago after the NAB issued notices to steel dealers for recovery of losses occurred due to sale of products at low prices. The NAB has claimed in its notices that as inquiry has been authorized by competent authority into the offence reported to have been committed under section 9(a) of National Accountability Ordinance 1999 and during the course of inquiry, it was revealed that your firm (steel dealers) is the beneficiary of illegal act of corruption and corrupt practices carried out in PSM.
After receiving the NAB notices, steel dealers across the country unanimously decided not to procure steel products from PSM as the NAB notices declared them corrupt without any evidence and ordered them to appear before the officials for investigation. Steel dealers said that NAB has issued notices for recovery of losses occurred during 2008-09 due to price reduction by PS management as per its rules and regulations. "We purchased steel products as per price list of PSM and then sold them into the market with same difference as at that time price in domestic and international market were on decline," they added.
They said that despite the fact that all the investigation carried out by Pakistan Steel itself or through independent agencies, it was revealed that Pak Steel management was responsible for the losses occurred due to fall in prices. The NAB is issuing notices to dealers, who just buy products and sell them into the market.
FIRs registered by FIA, have already mentioned that the prices of Pak Steel products were reduced up to 35 percent in comparison with local and int'l market but when market was on higher side the prices were not increased by PSM and in this way financial loss amounting to billions of rupees was caused to Pakistan Steel, they pointed out.
In addition, there was no influence of dealers in the decline or increase of prices of PSM products as not a single dealer was member of price fixation committee at that time when PSM management reduced prices and faced losses. During 2008-09, when PSM faced billions of rupees losses due to price reduction, Mueen Aftab Sheikh chairman, Sameen Asghar director commercial, Muhammad Mansoor GM Accounts and Cost and Nazimuddin Sahito acting GM marketing were member of the price review committee. Sometimes other officials including Rasool Bakhsh Phulphoto, Wasif Mehmood, and Muhammad Anisul Haq also participated in the review meetings to set new prices.
However, now we are being punished for procurement of steel goods from PSM and the NAB is directly accusing us, which is not acceptable, they said. Dealers also appreciated the stance and efforts of Imtiaz Lodhi, who during his acting CEO tenure asked FIA not to threaten dealers and also issued account clearance certificates in favour of dealers to enhance sales and restore their confidence.
They alleged that Major General Mohammad Javed (R) is not taking this issue seriously. "We have only one demand and that is withdraw all NAB notices against dealers, as all the inquiries have established that losses were not due to dealers," they said. Sources said to resolve the boycott issue, Pak Steel constituted two different committees for talks with dealers to restore procurement of steel products. One committee visited Lahore and held negotiations with steel dealers while the other committee held talks with Karachi-based dealers. Qaiser Saleem GM (Captive Mining & Co-Ord.), Hamid Pervez A.PEO Procurt & Stores), S Naeem ul Haque A.G.M (PPC) and Wasif Mahmood PEO Commercial were members of these committees.
These committees held negotiations with dealers across Pakistan and requested them to end boycott of the PSM products, however dealers are insisting for meeting with Major General Mohammad Javed (R) chairman Steel Mills and withdrawal of NAB notices. However, he is reluctant to meet dealers on this issue. Sources said, after the failure in dialogue with PSM management, dealers of Pakistan Steel have decided to continue the boycott.
The losses will go up further if dealers didn't start procurement. PSM's per month loss has reached Rs 1.5 billion and now chairman Major General Mohammad Javed (R) is seeking a bailout package of Rs 21 billion from federal government. On the other hand, sources in PSM said chairman Pakistan Steel is striving to resolve the issue and for this he also met Wajid Ali Durrani, Director General NAB Sindh to discuss PSM cases. They claimed that negotiations are still on and dealers will soon start purchase of steel goods.
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