NAB considers launching inquiry into Rs480b circular debt payments

Describes ministry’s response to ‘irregularities’ in payments as sketchy

ISLAMABAD: The National Accountability Bureau (NAB) has termed sketchy the Ministry of Energy’s response to alleged financial irregularities in Rs480 billion worth of circular debt payments as the anti-corruption watchdog weighs the option of launching a formal inquiry.

The Ministry of Energy (Power Division)’s response was very sketchy and the government did not give a proper answer to the bureau’s inquiries, said NAB director operations in a meeting of the Senate Standing Committee on Finance on Wednesday.



The standing committee got a briefing from NAB officials on four major cases that had been referred to the bureau for further investigation. NAB also apprised the legislators about progress on investigation into alleged corruption in the Multan Metro Bus project and alleged manipulation of share price and insider trading by The Bank of Punjab (BOP) president.

The NAB official said the bureau chairman had not yet authorised a formal inquiry into the circular debt case, but NAB would go deeper to dig out whether treasury rules were followed. About 10 days ago, NAB had asked the energy ministry to submit a detailed response.

The PML-N government made the payments in June 2013 within a day by suspending all relevant rules and procedures. The circular debt had accumulated during the previous administration of Pakistan Peoples Party (PPP).

The Senate had sent the case to NAB on recommendation of the Senate Standing Committee on Finance. A parliamentary probe had established at least Rs60.7 billion worth of undue payments to independent power producers (IPPs) and had sought its recovery.

The standing committee on Wednesday directed NAB to finalise its report in four months.

Multan Metro Bus project

The NAB director operations also apprised the committee that the bureau was not relying on information provided by the Securities and Exchange Commission of Pakistan (SECP) after senators expressed their apprehension that the SECP was trying to protect somebody.

In November, NAB Chairman Javed Iqbal had ordered an inquiry into alleged corruption in the Multan Metro Bus Project. The Senate committee initially took up the case of alleged corruption of $17.5 million.

The NAB official said the bureau was examining bank accounts of all the companies that remitted money abroad. NAB was also examining 10 different sub-contracts that the Punjab government gave for the execution of the project.

NAB was investigating whether Yabaite-Pakistan - one of the three companies working on the Rs17.6 billion ($167 million) metro project - has any links with China-based Yabaite Technology. The SECP had initially claimed that there was no link between the two companies.

The SECP was trying to mislead parliament and NAB in order to protect somebody, said Senator Mohsin Aziz of the Pakistan Tehreek-e-Insaf.

In December 2016, the Chinese securities market regulator had approached the SECP, seeking assistance in the ongoing investigation into Yabaite Technology Company Limited, which is listed on the Shenzhen Stock Exchange, according to an earlier SECP briefing to the committee.



The Chinese regulator is investigating alleged violations of Chinese securities laws.

An SECP official had earlier revealed that the chief executive officer of Yabaite Technology had a 70% stake in Yabaite-Pakistan. But the SECP did not disclose the very fact in a brief factsheet that it shared with the standing committee.

BOP case

The NAB director operations informed the standing committee that last week the bureau chairman had accorded approval to an inquiry through a joint investigation team into alleged manipulation of share price and insider trading by the BOP. NAB would seek technical assistance of the SECP in the case, he said.

However, Standing Committee Chairman Senator Saleem Mandviwalla advised NAB to engage a third party, fearing the SECP could protect the accused persons. 

Published in The Express Tribune, March 1^st, 2018.

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