Rs 45.4 billion investment: KPT chairman questioned over absence of financial statements

The Public Accounts Committee (PAC) was stunned on Thursday to learn that senior officials of Karachi Port Trust (KPT) invested Rs 45.4 billion in various banks without preparing financial statements. A PAC meeting was held here with Syed Khursheed Ahmed Shah in the chair. The officials of Auditor General of Pakistan (AGP) informed the meeting that the KPT officials did not even bother to obtain the required approval to make a huge investment. The officials further said the KPT management since 2008 has not been preparing financial accounts of the organisation.
The meeting while taking up audit objections of the Maritime Division of year 2016-17 expressed its dismay over the negligence of the KPT officials and directed the AGP to conduct a special audit of the KPT covering a period of 50 years. The panel also asked the officials to submit details of profit gained by the KPT over the past 50 years before the panel along with other details within 15 days.
The officials informed the meeting that Pakistan National Shipping Corporation (PNSC) has not received Rs 1.37 billion on account of late arrival of ships from various clients which speaks volumes about the unsatisfactory performance of the senior officials of the PNSC.
Secretary Ministry of Ports and Shipping Mumtaz Ali Shah while responding to audit objections admitted that a huge amount was outstanding against various clients of which Rs 400 million have been recovered while efforts are under way to recover the remaining amount. The panel directed the PNSC officials to recover the remaining amount as early as possible and a report to be submitted to the PAC as well.
The audit officials said that KPT since 2008 invested Rs 45 billion in various banks in violation of set rules and regulations and the company has not prepared financial statements about the investment. Responding to an audit objection, Chairman KPT Rear Admiral Jamil Akhtar said that as per the policy of the State Bank of Pakistan, the company can invest in banks having A+ ratings.
He further revealed that KPT employees were also involved in grabbing the KPT land, and the services of many of such employees have been terminated. The committee commenting on the issue said that State Bank of Pakistan''s policy cannot undo the rules and regulations made by the government and the KPT Act. Sardar Ashiq Hussain Gopang asked the chairman KPT to explain why the organization made huge investments in banks by setting aside all the rules and regulations and why financial statements were not prepared.
The chairman KPT said the amount invested in banks was a surplus amount; to which, member Committee Naveed Qamar said that KPT fulfilled budget requirements but it failed to make financial accounts statement, which shows incompetence of the authorities.
The chairman KPT remained unable to properly respond to the objections raised by the AGP officials and the committee members. Member Committee Azra Fazal Pechuho said that non-commencement of internal audit of any state-run institution for such a long time is surprising and it shows incompetence and complicity of the officials at the helm of affairs.
Briefing the panel, AGP Javed Jahangir said the department has provided a chief financial officer to conduct internal audit of every ministry and public sector department, but it totally depends on ministries and attached departments to allow chief financial officer to conduct internal audits. He added that an internal audit, as per law, is a must.
When Member Committee Mehmood Khan Achakzai asked the chairman KPT and other officials to name those officials who have invested such a huge amount in banks, the KPT officials refused to share the names. This act of the KPT officials invited the ire of the chairman committee who directed them to provide the names of the officials involved in the activity; otherwise a stern action will be taken.
Audit officials while sharing the details of the investment committee members with PAC said that general manger finance, chief account officer, manager finance and chief financial officer of the KPT were involved in the illegal investment of Rs 45.4 billion.