Amin Fahim reappointed despite ministry scandals

Commerce minister to resume portfolio in the new cabinet; NIC, sugar import frauds investigations remain unresolved.

ISLAMABAD: Makhdoom Amin Fahim has been reappointed as commerce minister in the new cabinet announced this week despite the fact that his ministry has overseen a series of financial blunders and irregularities which have cost the nation billions of rupees in losses.

Some of the major scandals include irregularities in sugar import and fraud at the National Insurance Company (NIC).

The Auditor General of Pakistan has brought documentary evidence against senior officials of the commerce ministry to the Public Accounts Committee but the reappointment of Fahim as commerce minister suggests that the prime minister may not be interested in investigating the matter further.

An alleged multi-billion rupee fraud in the National Insurance Company, an attached department of the Commerce ministry, is being investigated by the FIA. Over a dozen arrests have been made in the case after the Chief Justice of Pakistan, Justice Iftikhar Muhammad Chaudhary, took suo motu notice of the matter.

The NIC scam was detected after Ayaz Khan Niazi, thought to be associated with the minister, became the chairman of the NIC. Officials complain that one of the first steps Niazi took was to dole out Rs4 billion of NIC money to different private companies, mostly owned by friends in Lahore and Dubai, ostensibly to buy land from them, albeit at rates much higher than the market.

There are other concerns as well. Sources said the Commerce Ministry caused billions in losses last year on account of faulty sugar import deals with firms allegedly owned by personal associates of senior commerce ministry officials. These companies, which were given these lucrative sugar contracts, could not deliver their consignments on time, further deepening the shortage of sugar in the country. Retail prices for sugar went as high as Rs130 per kg. The government had to pay more than Rs10 billion to import the same quantity of sugar after these contractors defaulted.

One of the biggest defaults came at the hands of the son in law of Prime Minister Gilani’s cousin and former defence secretary Saleem Abbas Gilani, who was awarded a huge contract for 200,000 metric tons of sugar by the Trading Corporation of Pakistan (TCP). The default, and the three month delay in procurement, caused a loss of more than Rs6 billion, since international sugar prices had moved higher in that time.

In another case, one company deceived the commerce ministry officials by telling the TCP that their ship had left a Brazilian port for Karachi carrying 25,000 metric tons of sugar, which were actually meant for Venezuela. The ship never reached Karachi and the contract had to be cancelled, and re-awarded to another company at higher rates, causing more financial losses. Another Dubai-based company was paid $34 million in Kabul for the import of sugar which never reached Pakistan.

Sources confirmed that not a single party which defaulted on account of sugar import contracts was ever punished.

Meanwhile, according to official documents available to The Express Tribune, Auditor General of Pakistan has informed PAC members that his team of auditors has detected and investigated several sugar scams in the Trading Corporation of Pakistan.

The AGP report, containing its findings after conducting comprehensive investigations, were incidentally being compiled at a time when prime minister Gilani was busy in consultations before reshuffling his cabinet.

Published in The Express Tribune, February 14^th, 2011.