Multi-million fraud detected in Furniture Pakistan
Company spent Rs135 million without achieving any of its objectives.
LAHORE:
The board of directors of the Furniture Pakistan Company, a subsidiary of the Pakistan Industrial Development Corporation (PIDC), is learnt to have been dissolved after the detection of financial irregularities and inefficiency against the firm’s chief executive officer (CEO).
The company spent Rs135 million, including non-development expenditure, without achieving any of the objectives set by the ministry of industries, production and special initiatives, sources said.
The firm was set up in 2007 for promoting the local furniture industry and enhancing the sector’s exports.
In March 2008, the Furniture Pakistan Company received Rs600 million from the federal government for establishing two training centres and other infrastructure.
On February 26 of the same year, Dr Shahzad Ansar was appointed as the CEO and a board of directors, comprising 24 members, was appointed. As many as 17 of the board members were affiliated with the furniture industry, while seven of them were government functionaries.
The Express Tribune has learnt that the company’s CEO purchased a plot of land measuring two acres in Chiniot for Rs28 million with a front measuring just 25 feet. Sources said that the plot was bought at a rate higher than the market rate.
Sources said that work on the centre in Chiniot had not begun, while no land was purchased in Peshawar. Other accusations included the setting up of seven solar seasoning plants at Rs1 million each; none are operational as yet.
In April 2010, an exhibition attended by 23 parties was conducted which cost more than Rs12 million; allegedly through over-invoicing and bogus billing. One of the board members, Shahzad Mughal, said that another exhibition at the same venue, which was participated by a similar number of participants had cost Rs2.5 million.
The CEO is said to have appointed 35 employees with lavish perks and privileges against a sanctioned staff strength of 19. Later, the board of directors sacked 19 employees some of whom were getting salaries as high as Rs100,000.
According to the original PC-1, the CEO’s salary and other perks and privileges should not exceed Rs300,000, he was getting a salary of Rs500,000, excluding other perks, like company car, driver, air travel and hotel stay.
CEOs of other public sector companies are drawing salaries between Rs200,000 and Rs300,000, including all perks.
On January 19, after the board members decided not to extend the CEO’s tenure, which would have ended on February 26 this year. They also denied the approval of expenditures amounting to Rs135 million, alleging that the money had been spent without prior permission.
When these irregularities were pointed out, the board’s chairperson, Yasmin Rehman, member of the National Assembly’s Public Accounts Committee, said that the company’s accounts should be audited by the Auditor General of Pakistan. It was also decided that the CEO be denied extension in his tenure. It was alleged that when the CEO got wind of this he dissolved the board.
A former employee of the company Sidiq Bosan told The Express Tribune that because of the dissolution of the board, he (CEO) was still in office.
The firm’s CEO, Dr Shahzad Ansar, told The Express Tribune that allegations leveled against him were baseless and the board of directors was the main hurdle in the way of the company achieving its objectives.
Published in The Express Tribune, February 4th, 2011.
The board of directors of the Furniture Pakistan Company, a subsidiary of the Pakistan Industrial Development Corporation (PIDC), is learnt to have been dissolved after the detection of financial irregularities and inefficiency against the firm’s chief executive officer (CEO).
The company spent Rs135 million, including non-development expenditure, without achieving any of the objectives set by the ministry of industries, production and special initiatives, sources said.
The firm was set up in 2007 for promoting the local furniture industry and enhancing the sector’s exports.
In March 2008, the Furniture Pakistan Company received Rs600 million from the federal government for establishing two training centres and other infrastructure.
On February 26 of the same year, Dr Shahzad Ansar was appointed as the CEO and a board of directors, comprising 24 members, was appointed. As many as 17 of the board members were affiliated with the furniture industry, while seven of them were government functionaries.
The Express Tribune has learnt that the company’s CEO purchased a plot of land measuring two acres in Chiniot for Rs28 million with a front measuring just 25 feet. Sources said that the plot was bought at a rate higher than the market rate.
Sources said that work on the centre in Chiniot had not begun, while no land was purchased in Peshawar. Other accusations included the setting up of seven solar seasoning plants at Rs1 million each; none are operational as yet.
In April 2010, an exhibition attended by 23 parties was conducted which cost more than Rs12 million; allegedly through over-invoicing and bogus billing. One of the board members, Shahzad Mughal, said that another exhibition at the same venue, which was participated by a similar number of participants had cost Rs2.5 million.
The CEO is said to have appointed 35 employees with lavish perks and privileges against a sanctioned staff strength of 19. Later, the board of directors sacked 19 employees some of whom were getting salaries as high as Rs100,000.
According to the original PC-1, the CEO’s salary and other perks and privileges should not exceed Rs300,000, he was getting a salary of Rs500,000, excluding other perks, like company car, driver, air travel and hotel stay.
CEOs of other public sector companies are drawing salaries between Rs200,000 and Rs300,000, including all perks.
On January 19, after the board members decided not to extend the CEO’s tenure, which would have ended on February 26 this year. They also denied the approval of expenditures amounting to Rs135 million, alleging that the money had been spent without prior permission.
When these irregularities were pointed out, the board’s chairperson, Yasmin Rehman, member of the National Assembly’s Public Accounts Committee, said that the company’s accounts should be audited by the Auditor General of Pakistan. It was also decided that the CEO be denied extension in his tenure. It was alleged that when the CEO got wind of this he dissolved the board.
A former employee of the company Sidiq Bosan told The Express Tribune that because of the dissolution of the board, he (CEO) was still in office.
The firm’s CEO, Dr Shahzad Ansar, told The Express Tribune that allegations leveled against him were baseless and the board of directors was the main hurdle in the way of the company achieving its objectives.
Published in The Express Tribune, February 4th, 2011.