Major scam unearthed in ZTBL

11 Apr, 2016

Director General, Commercial Audit and Evaluation has unearthed a Rs 4.15 billion financial scam in Zarai Tarqiati Bank Limited (ZTBL) and asked Finance Ministry to probe the matter through a high-level committee to fix responsibility and recover the amount.
According to section 6 of the ordinance of Agriculture Development Bank of Pakistan (reorganisation and conversion) ordinance 2002, "the employees of ADBP who were in the services of ADBP before the effective date shall stand transferred to and become the employees of the company as of the effective date on the same terms and conditions and shall be subject to the same rules and regulations as were applicable to them before the effective date."
Official documents during the audit of ZTBL head office for the year 2014 observed that the management of ZTBL, by the approval of Board of Directors (BoD), introduced Staff Regulations 2005 on December 30, 2005. The employees of ZTBL who were being governed under SSR-1961 were given the opportunity to opt for SR-2005 under which existing employees governed by the pension rules under the SSR-1961 would have the option to adopt the SR-2005 and move over, the contributory provident scheme and benefits under the new staff regulations.
The employees who opted for these new regulations were paid 100% commutation of their pension in 2006 and 2008 and an amount of Rs 4,514.490 million was paid to the employees on this account.
The Audit argued that the implementation of SR-2005 to the existing employees of ZTBL (ADBP), who were employees of the ADBP and were transferred to ZTBL after the issuance of ordinance 2002, was irregular and unlawful.
According to the commercial audit, this act of management was set aside by the Peshawar High Court in its decision on October 28, 2010. This decision was upheld by the Supreme Court of Pakistan (SCP) and a review petition was also dismissed by the apex court. Thus, the payment of 100% commutation is irregular which is required to be recovered/adjusted as per orders of SCP. Therefore, the, implementation of SR-2005 to old employees is quite irregular and all payments made in this regard are required to be recovered.
The documents further reveal that the observation was issued to the management vide OM No 12 of September 16, 2015. The management in its detailed reply of October 05, 2015 argued that the payment is in order as it was approved by BoD. A decision with regard to payment of 100% commutation to old employees on adoption of SR-2005 was taken with the concurrence of Ministry of Finance which is evident from the fact that vide OM No F.3(18)IF-I/3002 of February 27, 2008 payment of Rs 943.4 08 million for implementation of SR-2005 was released by the Government of Pakistan.
The Director General Commercial Audit and Evaluation maintains that the reply is not acceptable as these employees have protection under section 6 of the Ordinance 2000 which cannot be superseded by the Board or the Ministry of Finance. The judgement sheet of Peshawar High Court, of October 28, 2010 in a writ petition No 327 of the year 2008, states: "we do not think the Federal Government or for that matter any other functionaries of the ADBP can make any law or rule contrary to the provision of section 6 of the Ordinance".
Director Commercial Audit has also unearthed a financial loss of Rs 24.918 million for late filing of an intra-court appeal.
During the audit of ZTBL head office for the year 2014 it was observed that in writ petition numbers 3022, 2703/2006, 1760, 1882, 2654, 2917, 4232, 4846/2010, 465, 468, 1686, 2993, 2995, 3106, 3116, 3267/2011, 119, 575, 596, 854, 3594, 4182/2012, and 535/2013, single bench of Islamabad High Court directed the management of ZTBL in its decision on May 16, 2013 to make payment to employees in accordance with the pension factor @ 2.33 instead of @ 1.15 within one month. The Bank did not file an intra-court appeal within the stipulated time and failed to get the suspension order of single bench decision. A division bench of Islamabad High Court issued status quo orders in ICA number 995 of 2013 on November 28, 2013 and the bank paid an amount of Rs 24.918 million to the employees @ 2.33 factor of pension formula. Due to improper follow up/late filing of intra court appeal a loss of Rs24.918 million was allegedly inflected on the public exchequer. The Audit maintained that either the bank should allow the pension benefits @ 2.33 factors to all employees or the intra-court appeal should have been filed in time to make harmony and to avoid discrimination.

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