‘Irregular appointment’: AGP office drops audit objection against Hijazi

The auditor had earlier declared his appointment ‘irregular’, recommending recovery of his salary

Shahbaz Rana July 22, 2017
SECP Chairman Zafar Hijazi

ISLAMABAD: While the SECP chairman has been arrested on charges of tempering with records, the Auditor General of Pakistan (AGP) has dropped a serious audit objection that it had initially framed against Zafar Hijazi’s ‘irregular appointment’.

In its ‘Audit and Inspection Report’ on the SECP, the AGP had termed Hijazi’s appointment ‘irregular’ and sought recovery of salary and other benefits enjoyed by him as chief of the financial regulatory agency.

However, the audit objection has been dropped due to some external pressures, according to sources in the AGP. The audit objection has not been printed in the final report which will now be laid before parliament through the President of Pakistan, said sources.

In its earlier report, the AGP had pointed out that Hijazi’s appointment was against the SECP Act of 1997. The directorate general audit had highlighted the illegality while auditing the SECP accounts from year 2000 to 2015, according to the initial audit objection available with The Express Tribune.

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It was for the first time that the AGP conducted the SECP audit as the corporate sector regulator did not allow the federal auditors to scrutinise its accounts for many years.

In its earlier audit objection, the federal auditors had sought recovery of Rs28.1 million from Hijazi on account of the salary he received from Dec 2014 till Feb 2016 when the AGP pointed out this illegality.

In December 2014, the finance ministry appointed Hijazi as SECP commissioner for three years. Hijazi is considered a close confidante of Finance Minister Ishaq Dar.

While explaining its objections to Hijazi’s appointment, the AGP had noted that under Section 7(I) of the SECP Act of 1997, a commissioner shall hold office for a term of two years and shall retire on the expiration of that term and may be reappointed for a further term of three years.

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The audit department had observed that Hijazi was initially appointed as commissioner in Dec 1998 and his tenure was extended in 2000 till Dec 2003, when he completed his five-year term.

“Thereafter, he was not eligible for appointment as Commissioner/Chairman in the SECP as per section 7 of the Act,” said the audit objection.

It added that the chairman was also drawing pension from the SECP as its retired commissioner at the rate of Rs29,329 per month in addition to drawing salary as its incumbent chairman.

“The legal status regarding decisions taken during present tenure of the chairman is questionable,” the AGP had observed while terming his appointment irregular.

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The sources said after the AGP printed the objection in its report, Hijazi exerted pressure through various channels.

At that time, Rana Assad Amin was the Auditor General. But the sources said the audit objection was settled at the level of the director general and the deputy auditor general of Pakistan.

A senior official of the AGP said the department settled the audit objection in the light of legal opinion provided by the SECP to the AGP. He said the Ministry of Law had termed Hijazi’s appointment lawful. The sources in SECP said Hijazi accommodated many people to appease his opponents.

The chairman hired about 125 persons, including contract employees, regular and outsource, during his two-year tenure in the SECP. Before Hijazi became chairman, the total number of SECP’s regular employees was 380, which has now risen to 500.

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