Senate Standing Committee on Industries and Production is to quiz top officials of both Ministries and Pakistan Steel Mills (PSM) on Thursday (today) about financial irregularities during the last five years. The mill is facing a financial loss of Rs 84 billion and debts of Rs 90 billion.
To be presided over by Senator Raja Zafar-ul-Haq, the committee has sought details of working of PSM. It has also sought details of a bailout package announced by the federal government. The committee has also sought the names and designations of those found involved in irregularities and action taken against them.
According to a report submitted to the Supreme Court of Pakistan, forensic auditors have acknowledged that some instances of corruption and evidence of mismanagement were not included in their report on PSM, a report compiled by the National Accountability Bureau (NAB). The Supreme Court through an order on May 16 last year directed NAB to probe the matter and submit fortnightly progress reports.
In compliance with the court's order, the authority submitted its eighth progress report on September 22. The Supreme Court observed that the previous NAB report explained certain steps taken by the bureau, but NAB authorities were directed to file the report on or before October 15 last year.
According to the NAB report submitted on October 13, FIA registered 10 FIRs in connection with various acts of corruption and corrupt practices by officials of PSM and others. Interim/final challans were filed by FIA in the court of Special Judge Anti corruption (Central) Karachi in respect of nine cases and one case was filed in the court of judicial magistrate, Karachi. The following are details of FIRs: FIA FIR No 36/2009, 37/2009, 38/2009, 39/2009, 01/2010, 9/2010, 13/2010, 15/2010, 17/2010 and 18/2010 were registered. Most of alleged accused are on bail while a few are absconders. Only Mueen Aftab is in judicial custody.
Applications under Section 16 A of National Accountability Ordinance (NAO) 1999 were filed before both the courts to assume jurisdiction over the cases by NAB for further action as directed by the Supreme Court of Pakistan in its letter of May 16, 2012. The Special Judge Anti Corruption (Central) Karachi in its order of September 25, 2012 transferred the cases to Accountability Court.
The report further stated that in the forensic audit report the auditors have determined a loss of Rs 7.018 billion to PSM due to non adjustment of sale prices of products by management of PSM in accordance with prevailing international price. Out of this a loss of Rs 1.235 billion has been termed corruption due to sale of products by PSM to 85 favourite consumers /traders by giving them preference over others.
Similarly, FIA has submitted challans against 41 traders/consumers for unlawful gain on account of sale of products to them at lower than prevailing prices. The said traders/consumers have been given an opportunity to voluntarily return/ plea bargain under the provisions of section 25 of National Accountability Ordinance 1999 and to inform the acceptance or otherwise within 15 days.
During the inquiry, it was detected that some local firms had requested PSM for purchase of billets, but they were not provided the material. As a result, the said firms had to either import the material or purchase the same from local market. Proprietors of three such firms were examined and details of purchases / imports made by them were obtained to ascertain the import/local prices of that product during the period under consideration.
According to NAB, forensic auditors calculated a loss of Rs 2.8 billion on procurement of coal on the basis of a long-term contract. Auditors determined that PSM entered into a contract with suppliers when prices of raw material were at a peak. However, prices fell sharply in the first quarter of the financial year ended on June 30, 2009.
PSM's Board of Directors issued directions to form a committee to negotiate prices with suppliers. However, the PSM management did not form the committee. As such, a loss was caused to PSM on procurement of coal at higher than the prevailing international prices. During 2008-09, coal was procured from following suppliers: (i) M/s Tech Coal Canada; (ii) M/s Vale Australia; (iii) M/s Anglo Coal, Australia (German Greek); (iv) Anglo Coal, Australia (Moura Dowson and ;(v) M/s Wesfaremers, Australia.
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