Alleged embezzlement of billions of rupees: minister decides to refer Peco case to FIA

The Minister for Production, Anwar Ali Cheema, has decided to refer the case, involving embezzlement of billions of rupees in Pakistan Engineering Company (Peco) to Federal Investigation Agency (FIA).
Recently Peco's Board of Directors (BoD) invalidated most of the actions taken by the Managing Director (retired) Brigadier Bilal Ahmad Khan.
Bilal, who was serving as Managing Director of National Fertiliser Marketing Limited (NFML), was transferred as Managing Director of Peco. He took charge of his new assignment from July 21, 2011. However, Peco's Board ratified his appointment for three months only, ie up to October 20, 2011.
Audit was conducted by the Federal Commercial Audit (FCA). The following issues were found subject to investigation: (i) leasing out of 100 acres of PECO land at Kot Lakhpat Works at very low price; (ii) irregularities in case of natural gas; (iii) overhead granas (43) Hoists (7) missing; (iv) shortage of 750 tons of angle iron; (v) theft of three tons of electric wires; (vi) sale of shed of scrap at the rate of 36.11/kg; (vii) unnecessary purchase of cleansing oil worth Rs 6.6 million; (viii) outsourcing of oil galvanising work spending Rs 25 million; (ix) arbitrary cancellation/appointment of sales distributors for sale of pumps and motors (pumps well co); (xi) shortage of store items worth Rs 12 million till date; and (xii) under-payment to Qazi Associates. An official statement said that FIA Director General constituted a three-member committee under the charge of Deputy Director Crime Circle Lahore in December, 2011, to investigate three irregularities. "Now after the special audit report, eight other issues have surfaced and the Minister of Production requires investigation of these issues, too," the statement said.
Accordingly, audit recommended: (i) to take necessary action against the person(s) at fault in the light of enquiry committee constituted by the Ministry of Production; (ii) recover loss from the person(s) at fault;(iii) state reasons regarding incurrence of expenditures to the tune of Rs 3.412 million on account of tube well and civil works whereas it is the responsibility of lessees; (iv) explain the reasons of non-transparent hiring at such a low rate causing a loss of Rs 8,500,000; and (v) intimate reasons for non-recovery of dues from lessees.
Business Recorder ran a story on January 13, 2012 on key decisions taken by the Peco Board. The Board in its resolution said that all the terminated employees were to be treated as if they were under suspension until an HR committee headed by Muhammad Iqbal (Director) reviews the new appointments.
Second, shifting of Head Office from Mall Road to Kot Lakhpat works and 90 percent of the office was shifted to cut down the cost of running and maintenance of the office and to ensure better co-ordination. The Board referred the matter to the Finance Committee to examine whether there is any material saving from the transfer. Necessary documents were however advised to be kept at the Mall Road office, as required under Section 230 of Company's Ordinance 1984.
Third, disposal of fixed assets through a tender in August, 2011, wherein scrap, machinery, etc, worth Rs 20.560 million was offered for sale. The Board did not approve the transaction. Meanwhile, the successful bidder has lifted material worth Rs 2.857 million and has now been served legal notice.
Fourth, lease of land for cultivation against the present lease of Rs 8000 per acre/annum, the land was proposed for leasing at Rs 46,000 per acre per annum. The Board appreciated the rate. Government Commercial Auditors have also given their observations during Special Audit in December, 2011 on the earlier deal. Fifth, change of bank signatories, which the Board resolved to review the proposal by Muhammad Iqbal (Director), but this measure was later approved.
Sixth, opening of a bank account with Summit Bank with a deposit of Rs 7 million.
The Board did not approve the resolution and ordered immediate closure of the account, withdrawal from Summit Bank and deposit of the amount in UBL.