Steel Mills: SC asks Production ministry why it failed to take action on audit report

Published: March 13, 2012

Court seeks explanation over records not submitted by Steel Mills, lawyer presents report on losses. PHOTO: EXPRESS/FILE

ISLAMABAD: The Supreme Court of Pakistan has sought reasons from the Ministry of Production for its failure to take prompt action on the receipt of the forensic audit report that identified losses worth billions of rupees due to negligence and corrupt practices at Pakistan Steel Mills (PSM).

The counsel for Pakistan Steel Mills, Fakhruddin G Ebrahim revealed before the court that losses worth Rs26.526 billion had been incurred during the fiscal year 2008-09. He said said that as per Forensic Audit Report prepared by independent audit firm Awais Hyder Liaqat Nouman, out of the accumulative losses of 26.526 billions, business losses were Rs4.68 billions, losses due to corrupt practices were Rs9. 99 billions and losses due to mismanagement/negligence were Rs11. 84 billions.

A three member-bench headed by Chief Justice Iftikhar Muhammad Chaudhry, while hearing the case of corruption and mismanagement in Pakistan Steel Mills, came down hard on the accountability agencies and the relevant ministry for their failure to scrutinize affairs of the PSM.

Ebrahim informed the court that all accused were on interim bail and no case was being processed against them due to one reason or the other. The chief justice said that all persons responsible for such corrupt practices were known to the relevant ministry, National Accountability Bureau (NAB) and Federal Investigation Agency (FIA), but they were reluctant to take any action against them.

“As per admission of Gul Muhammad Rind, Secretary Production, the forensic audit report was received by his ministry about six months back. We are surprised to note that no steps so far have been taken by the ministry despite the fact that Pakistan Steel Mills is not being run properly,” the court observed in its written order.

Ebrahim pointed out that five enquiries had been initiated by the FIA in the matter, but no case had been registered so far.

The court asked secretary production as to why action had not been taken immediately after receipt of the forensic audit report by the ministry, who explained that the ministry was contemplating referring the matter to the National Accountability Bureau regarding all the cases which had earlier been registered by the FIA and regarding enquiries which were pending with the FIA.

The court gave a chance to the ministry of Production to take decision on this. “The corruption and mismanagement in leading institutions of the country forced the Supreme Court to intervene to remind the relevant accountability forums of their primary responsibilities,” observed Justice Khilji Arif Hussain, a member of the bench.

Referring to the audit report, the chief justice lamented that PIA, Railways and PSM were “finished” due to such corrupt practices, negligence, overstaffing on ‘sifarshi chits’ and the quota system.

“In view of this report, which only pertains to the financial year 2008-2009, it is not known that up till now how much loss has been occurred in this organization,” chief justice said.

The court would take up this issue again on March 15.

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Reader Comments (5)

  • Parvez
    Mar 13, 2012 - 2:47PM

    When Shaukat Aziz decided to sell it, that was the right decision. The procedure and process may have been flawed but what is happening now is decidedly worse and costing the country dearly.

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  • Ch Allah Daad
    Mar 13, 2012 - 8:51PM

    The only way to make profitable Steel Mills, Railway and PIA is to privitize them, but honourable supreme won’t let it happen. If steel mills had been privitized long time ago, we could have saved hundreds of billions. Government cannot and should not run a business. When will we learn this lesson.

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  • Yusuf
    Mar 14, 2012 - 1:38AM

    Government has no business running bank, insurance companies, consumer and food retailing, utilities, public manufacturing enterprises, or transports. The Pakistan Governemnt should not and must not compete with private enterprise sectors. The function of Pakistan Governemnet is to Facilitate business ventures, promote business in Pakistan, give land freely in the rural settings also to industries willing to shift to small rural cities in the interiors. The Pakistan government should provide basic infrastructure to industries in all four provinces.

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  • Mar 14, 2012 - 6:08PM

    Pakistan steel mill, Railway, PIA and WAPDA needs to be privatized by a fair and transparent process. In order to save Pakistan from bankruptcy and further harm, privatization is a must. Unless very strict measures are taken to check the economic decline the country is getting closer to event horizon, with no hope of return to normal.Recommend

  • Mar 15, 2012 - 9:36AM

    I still earnestly believe we will overtake Asia in steel production in 2-3 years as per Zaid Hamid’s theory. What do you think?

    Takmeel e Pakistan

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