NAB to probe closure of Roosevelt Hotel

The National Accountability Bureau (NAB) on Tuesday said the watchdog will probe the closure of the Roosevelt Hotel in New York - an entity owned by Pakistan International Airlines Investment Limited (PIAIL).

The hotel announced its permanent closure from October 31 on its website citing ‘current economic impacts’.

Taking notice of the matter and related media reports, NAB Chairman Justice (retd) Javed Iqbal directed a director-general (DG) of the national anti-graft body, Irfan Mangi, to investigate why the entity incurred alleged losses worth millions of dollars and needed to be closed.

“The government of Pakistan allegedly lost millions of dollars,” NAB chairman stated. “Those responsible for alleged negligence in discharging their national duties [to keep the hotel profitable] will also be identified.”

The managing director of PIAIL had earlier stated that The Roosevelt remained profitable for 99 years and suffered a loss of only $1.5 million last year in 2019.

“Due to the current economic impacts, after almost 100 years of welcoming guests to The Grand Dame of New York, The Roosevelt Hotel is regretfully closing its doors permanently as of Oct 31, 2020,” the announcement on the website read.

In August, it was reported that the Economic Coordination Committee (ECC) of the cabinet, was expected to approve funding of $125 million to PIAIL to rescue Roosevelt Hotel that has fallen into a debt trap and its assets are at risk.

Sources had told The Express Tribune that the PIAIL chairman, in its letter sent on August 4, 2020, informed the Aviation Division that the financial health of PIA Corporation Limited (PIACL) neither permitted repayment of $50 million to PlAIL in the near future nor could it borrow any funds on account of a lack of cash flow and already pledged assets.

Therefore, according to the letter, the government of Pakistan had been requested to provide financing of $125 million urgently, enabling them to secure PIAIL’s most valuable asset.

The Aviation Division had also earlier informed the economic decision-making body that in the backdrop of Covid-19 pandemic, the hotel industry had been severely impacted across the globe.

Roosevelt Hotel experienced extreme cash flow constraints since March 2020.