Irregularities, mismanagement cause Rs 5.16 billion loss to MoC

Auditor General of Pakistan (AGD) has detected embezzlements, irregularities and mismanagement's of Rs 5.16 billion in the Ministry of Commerce. According to AGP's Report-2010-11 available with Business Recorder, a total of Rs 2.1 billion irregularities, embezzlements and mismanagement's was detected in National Insurance Company Limited (NICL).
Rs 2.4 billion in Trading Corporation of Pakistan Limited (TCPL), Rs 451.179 million in State Life Insurance Corporation of Rs 187.24 million in Pakistan Re-Insurance Company Limited (PICL) and Rs 1.44 million in Pakistan Tobacco Board. The Audit report revealed that the NICL suffered a loss of Rs 1.7 billion due to irregular procurement of a building with no utilisation.
The report says that the NICL acquired premises (six units of the Liberty House, Dubai International Finance Center, Dubai, UAE) on lease hold with a total area of 27,000 Sq. ft. amounting to Rs 1.7 billion in 2009. The procurement of the said property was irregular as neither the procurement was advertised nor bidding documents were formulated or made available to the prospective bidders. Moreover, the management has not been able to rent out the office premises even one year after its purchase.
The irregularity was brought to the notice of management on August 18, 2010. The Management in its reply dated September 14, 2010 stated that the property was procured on the basis of evaluation conducted by property consultants. The issue was discussed in DAC meeting held on December 15, 2010. The management did not contest the audit observations. Therefore, the DAC decided to place the matter before Public Accounts Committee (PAC) of the National Assembly.
Similarly, the national exchequer faced a loss of Rs 358.560 million due to irregular investment of the NICL by procuring shares of an unlisted company. As reported in this paper on May 20, 2011 that Audit also detected Rs 1.9 billion loss to national exchequer due to non-opening of L/C against a sugar contract and non-revival of sugar contract by TCPL.
The TCPL also suffered a loss of Rs 433.74 million due to old recovery cases against defaulting export agent. The audit report has detected a loss of Rs 197.37 million in State Life Insurance Corporation due to unauthorised payment of bonus to officers and staff. In the SLIC, payment of Rs 197.37 million was made as bonus to the officers and staff during the year 2009 without obtaining administrative approval from the ministry and concurrence of Finance Division which was in contravention of the government policy.
The matter was discussed in DAC meeting held on December 15, 2010. The DAC directed that clarification in respect of the letter quoted by the management should be solicited from the Ministry of Finance to ascertain whether concurrence of Finance Division in payment of bonus was required or not. However, no progress was reported by the management till finalisation of the audit report.
The SLIC also suffered a loss of Rs 178.357 million due to non-utilisation of a property for commercial purposes and by using it for residential purpose. The report also exposed loss of Rs 113.722 million and Rs 50.165 million in Pakistan Re-insurance Company Limited (PRCL) due to non-pursuance of under litigation case of Zakat refund and delayed legal action causing non-recovery of premium with interest.