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Corruption eating away PSM: SC

14 March, 2012

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ISLAMABAD: The Supreme Court, on Tuesday, while hearing a case pertaining to financial mismanagement in the Pakistan Steel Mills (PSM), noted that corruption was eating away at the Steel Mills.

The court was told that the PSM had incurred a Rs 26.5 billion loss during the financial year 2008-09 due to corruption and mismanagement.

A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, is hearing a suo motu case regarding alleged corruption of Rs 26 billion in the PSM. During the hearing, Fakharuddin G Ebrahim, counsel for the PSM, furnished before the bench a forensic audit report of the PSM prepared by M/s Avais Hyder Liaqat Nouman (AHLN).

The counsel prayed to the court to send the PSM cases to NAB as no progress was made for financial recovery despite the registration of 10 FIRs, prior to audit report, against the persons responsible. "There is a possibility of recovery of some amount if NAB sincerely worked on it," he said. According to the report, the total loss incurred during 2008-09 was Rs 26.5 billion. It was divided into three parts: business loss worth Rs 4.68 billion, losses due to corrupt practices amounting to Rs 9.99 billion, and Rs 11.84 to mismanagement-related losses.

The court observed, "Prima facie, it has been established that a huge loss has been caused to Pakistan Steel Mills, which is mother industry of the country, on account of corruption and corrupt practices, business losses and mismanagement." The court ruled in its order that undoubtedly all these three components were interlinked and ended up on corruption and corrupt practices in the organisation. It said that it was still not known how much loss the organisation had suffered. The chief justice observed that the minister concerned was ultimately responsible for the losses.

The PSM counsel informed the court that the ex-chairman of PSM, Moin Aftab Sheikh, was mainly responsible for corruption of Rs 3.9 billion through allocation of products, purchase of iron ore lump and zinc ingot, production of cast billets and rolled billets. He said that prior to the forensic report, the FIA had lodged 10 FIRs against 51 nominated traders, consumers, contractors and 10 officers and employees of the PSM. The accused are on interim bail, except for the Mills' ex-chairman. He said pursuant to the forensic report, the PSM has lodged five additional complaints with the FIA.

The chief justice observed, "This is a classic case of corruption and we know how big fish are involved in this huge corruption." He added that the FIA could not take action against the persons involved in the case. "First we saved the state-owned entity from privatisation," but now it is faced with a huge loss, the CJP remarked. Noting that corruption had ruined the Pakistan International Airlines (PIA), Pakistan Railways and Pakistan Steel Mills, the CJP said, "The country is being ruined."

Industries' Secretary Gul Muhammad Rind told the bench that his ministry had received the forensic audit report about six months ago. On this, the chief justice inquired from him why was action not taken after the receipt of the report. The secretary explained that the ministry is contemplating referring the matter to the National Accountability Bureau.

End.

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