Sell-off of various entities: PC retained sale proceeds in ‘violation’ of Ordinance: AGP

ISLAMABAD: A parliamentary panel on Wednesday was informed that the Auditor General of Pakistan (AGP) observed that the Privatisation Commission (PC) retained the sale proceeds of different entities in violation of the PC Ordinance 2000 and also increased the salaries of consultants against the agreed contracts.

Senate Standing Committee on Privatisation met here under Chairman Shamim Afridi. The committee was briefed by the Privatisation Ministry on all audit paras for the financial year, 2018-19, 2019-20, and 2020-21. The issues pertaining to privatisation of Pak-China Fertilizer Company, Haripur, House Building Finance Corporation (HBFC), Jinnah Convention Centre.

In Audit Report 2018-19, 2019-20, auditors observed that PC retained amounts received from sale proceeds of the entities or shares/assets since long against PC Ordinance 2000 and relevant Rules that says PC remits all the sale proceeds net off transaction expenditure to the federal government as and when the final sale proceeds received.

Responding to audit objections, Secretary Privatisation Hassan Nasir Jamy said the commission had asked AGP to verify their response since long. In one audit para pertaining to retention of Rs3.7 billion privatisation proceeds of the NPCCL, the secretary said that Rs2 billion sale proceeds of the NPCCL were transferred to the federal government on June 27, 2016, and PC was allowed to retain Rs437 million with the approval of Finance Division to settle PC liabilities (on account of transaction expenditure). He added that profit bearing bank account was opened on February 21, 2002, Rs1.3 billion profit was earned.

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In another objection, auditors pointed out that the PC opened three bank accounts in addition to the privatisation fund/commission account etc. The opening balance on July 1, 2017, was Rs193.799 million and the closing balance was Rs206.33 billion.

In yet another case, auditors alleged irregular retention of shares and dividend of Rs127 million of the National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank of Pakistan (UBL), Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC). Secretary replied that the PC had returned the shares to Finance Division and PPL shares return to PPL, however, PC has been asking Finance Division to retrieve the shares of OGDCL following delisting of entity from the active privatisation list.

In a similar case, PC retained Rs329.3 million received from the successful bidders as earnest money or sale proceeds till such time either the possession of the entities or shares were handed over to buyer since 2001. The amount was available as balance in the bank account as June 30, 2019.

The auditors also pointed out the irregular increase in salary of consultants/advisors over and above the amount agreed in contracts.

The committee was further informed that the privatisation of Sindh Engineering Limited (SEL) can only be taken place in the next financial year until SEL will be nationalized which has been pending since 1972. The matter was in various courts of law.

The SEL is non-operational since 2008 and its properties included commercial plaza - Chopra Building at 56 Mall Road Lahore, 443 acres agriculture land in Kashr and Plot 16, 17 and 18 measuring 31, 4999 sq meters under lease by KPT Karachi.

The SEL does not have clear titles in their name of these properties. For the property located at Mall Road, Lahore, ex-owner has filed suit for transfer of property in their name.

The SEL has inflicted a loss of Rs27.4 million after taxation as per the audited accounts of 2016-17. The committee probed the matter of transferring of 448 acres land to the original owner unilaterally by the Assistant Commissioner Kasur division despite, it was nationalised in 1972 and asked a comprehensive report on the matter in the next meeting.

Copyright Business Recorder, 2022