The Supreme Court of Pakistan has taken a suo motu action regarding allegations of corruption in Pakistan Steel Mills Corporation (PSMC) and asked its management to submit comments, a copy of the SC notice available with Business Recorder says.
Sources in the corporation said that PSMC received a notice from Supreme Court of Pakistan on September 16 for comments on the corruption reports carried by a leading English-language daily. The management of Pakistan Steel is facing serious corruption allegations for the last two months.
These allegations led to the removal of Mueen Aftab Sheikh, Chairman PSMC, on August 18 by Prime Minister Syed Yousuf Raza Gilani. However, other team members of Mueen Aftab Sheikh are still working on their posts in PSMC and are said to be following the sacked chairman's policies, which caused billion of rupees losses to one of the prime national institutions.
Sources said the country's single largest steel producer has posted historical loss of over Rs 22 billion in fiscal year 2008-2009, while July-August losses alone reached estimated some Rs 3 billion mark. According to the sources, during the tenure of the former chairman steel products were sold under cost with special favours extended to some selected dealers. This was done despite a Rs 5,000 premium per ton on the supply of billet offered by some re-rolling mills.
The Supreme Court in its suo motu action notice (case no. 15 of 2009), sent by assistant registrar Muhammad Iqbal, has directed the chairman PSMC to submit its comments on the news reports till September 24, 2009. The acting chairman Rasul Bux Phalpoto confirmed toBusiness Recorder the receipt of the SC notice. According to him, the PSM management will be filing its comments in the next few days.
At present, Managing Director Rasul Bux Phalpoto is serving as acting chairman of the corporation as newly appointed chairman, M M Usmani, is now out of country. The sources pointed out that the public sector entity was a profitable organisation from fiscal year 2000-01 to fiscal year 2007-2008. However, during the last fiscal year, it posted huge losses.
The sources held the sacked chairman responsible for massive losses. The mega industrial unit registered less then target production and sales and import of raw material on high rates. Moreover, ineffective policies and non-technical management are also among the chief causes behind huge losses.
Pakistan Steel's provisional financial documents for the period ended June 30, 2009 show that Corporation faced a historical loss of Rs 22.143 billion during the July-June of fiscal year 2008-2009 as compared to a profit of Rs 2.375 billion in fiscal year 2007-08. The current liabilities of corporation mounted to Rs 28.129 billion in 2009, which stood at Rs 8.24 billion in fiscal year 2008.