SC orders audit of PIA accounts for last 10 years

Published: July 1, 2018


ISLAMABAD: The Supreme Court on Saturday ordered the Auditor General of Pakistan (AGP) to conduct an audit of the accounts of Pakistan International Airlines (PIA) for the last 10 years.

A two-judge bench, headed by Chief Justice of Pakistan Mian Saqib Nisar hearing suo motu case regarding irregularities in PIA, also upheld the ban on PIA’s re-branding with the picture of the national animal, the markhor, on the tail of its aircraft.

Likewise, the matter regarding Musharraf Rasool Cyan’s appointment as managing director of the national flag carrier has been referred to the federal government for a decision. His appointment was challenged by the PIA workers union.

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The bench expects the cabinet to decide on the matter soon.

The court also allowed all former managing directors of the airline to visit abroad with the condition that they will give an undertaking of their return to the country.

During the hearing, the chief justice noted that the purpose of conducting audit was to identify those who were responsible for causing Rs280 billion losses to the airline during the last 10 years.

Meanwhile, Mirza Mahmood, the counsel for former adviser on aviation Shujaat Azeem, said his client had submitted all relevant details of the accounts of the airline for the past eight year. He said that one or two individuals could not be held responsible for the miserable situation PIA was in.

To this, the bench wondered, “If Azeem is not responsible then why he is giving clarifications.”

Justice Munib Akhtar said political interferences could not be overlooked in the affairs of PIA.

Also, another former adviser on aviation, Sardar Mehtab Khan Abbasi, objected to the audit of PIA through the AGP and recommended forensic audit to identify the factors regarding the huge losses.

However, the bench did not accept his proposal, saying the AGP might approach the apex court in case of any difficulty.

The hearing of the case was adjourned till July 17.

Earlier, the national flag carrier submitted a comprehensive report wherein it was stated that PIA has accumulated losses of Rs356 billion – including the loss incurred in 2017.

“Balance sheet is now very weak with total liabilities amounting to Rs406 billion against assets of only Rs111 billion. Today, PIA is only able to continue operating due to the government’s financial support,” says the report.

It is also informed that the company has been operating most of its routes on losses, has far too many employees for the size of operations and lagged in the current business environment while its business model and operations are not capable of making profits.

Last year, PIA was incurring losses, a number of aircraft grounded, suffered from demotivated staff, political interference, revenue leakages, and little if any interdepartmental coordination, the report highlights.

The report submitted to the Supreme Court also reads that the national airline lacks capability to improve its performance given the core competency gaps in the whole organisation – including the senior executive leadership.

Reasons identified include political appointments and extremely poor HR practices while PIA as an organisation operates like an outdated government department rather than a modern business.

“Unions and associations have perfected the tools to obstruct management drives at revival with malice,” adds the report, stating PIA is heavily burdened with unions and they should not be allowed to interfere in the management process.

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The report identifies that unions are also negatively impacting on daily operations by influencing employees to ‘go slow’ when they wish to apply pressure on the management.

Recently, they have been carrying out a maligning campaign to thwart efforts to clean up HR practices.

The court was requested in the comprehensive report to allow the incumbent management to undertake and commence recruitment of relevant and appropriate officers and employees to ensure efficient working of the airline’s affairs.

PIA also pleaded for staff unions to be restrained from acting against the interests of the company. Likewise, it was also requested to remove the name of the company’s CEO from the exit control list.

The airline also requested the top court to permit it to adopt markhor as a symbol of the airline’s revival.

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