The reconstituted Board of Directors of the Pakistan Steel Mills (PSM) is meeting on March 12, 2011 (today) to decide the fate of suspended Acting Chief Executive Officer, Imtiaz Lodhi, and to discuss other financial and administrative matters of the entity.
In 2008-09 PSM's losses were Rs 22 billion which have now increased to Rs 100 billion including debt liability. According to the information submitted by Barrister Zafarullah to the Supreme Court, one of the Directors of reconstituted Board was amongst the accused of PSM financial scam.
According to the fact finding report filed by the PSMC counsel in January 2010 exorbitant rates of procurement of material coupled with sale of finished goods on low price, and low production (64% of capacity utilisation) due to shortage of raw material caused the financial crisis.
Book 4 filed by the PSMC counsel in November 2010 by ASC Fakharuddin G Ebrahim blames FIA investigations (instituted on the direction of prime minister) for scaring away "buyers who are specialised and limited in number" and sellers and shipping agents who are afraid to conduct business with PSMC "as several FIRs have been lodged against them and criminal proceedings have been filed against them".
The losses of PSMC are also attributed to the inventory of unsold finished goods worth Rs 7.9 billion and the fact that PSMC was "suffering immensely and the accumulated losses are at Rs 1 billion per month". Comments filed by PSMC through its counsel ASC Tariq Lughmani on book 1 of Constitutional Petition No 30/2010 filed by Watan Party support the issues regarding unbridled corruption, which also appear prominently in the audit reports of Auditor General of Pakistan, and unjustified regularisation of 4732 daily wage workers for political gain by the government at the cost of taxpayers.
MOI&P, which is the controlling ministry of PSMC, had constituted a probe committee headed by Abdul Ban Khan, CEO, Pakistan Industrial Development Corporation. MOIP filed its comments based on the findings of the probe committee. Referring to the Article of Association of PSMC, it apportioned the responsibility of losses of Rs 22 billion in the year 2008-09 on the sacked chairman, Mueen Aftab Shaikh.
Five inquiry reports completed by the FIA in the tenure of DG FIA Tariq Khosa, on the pursuance of court, were awaiting approval of government for registration of FIRs. In December 2009, 4 FIRs Nos. 36/2009, 37/2009, 38/2009 and 39/2009 were registered based on the inquiry reports, but the 5th, FIR No 01/2010, registered in January 2010, was not according to the inquiry report.
The inquiry report had alleged 19 persons of wilful wrongdoing. Of these, in FIR No 01/2010, related to canteen contracts while the names of 12 persons, mostly belonging to the CBA, do not appear. Surprisingly 3 persons who were not named for wrongdoing in the inquiry report have been implicated in the FIR.
One of these persons is Muhammad Atiq Khan, DGM, who had been transferred out on 18-09-2008 from the department 5 days prior to the opening of tender on 23-09-2008 and had nothing to do with the process of opening and award of tender. He was not the Competent Authority, but merely recorded the minutes of the meeting held on 12 September 2008 under the pressure of CBA.