Unearthed: LESCO chairman fishes out mega scam
Bills worth more than Rs100m fraudulently marked as paid for two years
Lahore Electric Supply Company (Lesco) Chairman Dr Musadik Malik. PHOTO: APP
LAHORE:
Lahore Electric Supply Company (Lesco) Chairman Dr Musadik Malik has unearthed a fraud of Rs100.8 million in one of the sub-divisions of the company.
He has sent the case to the Federal Investigation Agency to probe the financial mismanagement.
Speaking at a press conference on Friday, Malik outlined various financial challenges being faced by the power company.
He said bills worth more than Rs100 million were fraudulently marked as paid from August 2013 to July 2015. The fraud was committed at the Phool Nagar Revenue Office. About once a month, large numbers of bills from all over Lahore were marked as paid at the Pattoki branch of a bank.
This was done by the improper usage of software provided by Lesco to various banks for the automation of bill collection. The software uses a security device which is entrusted to the bank. This device was used by someone at the bank for the illegal usage.
The software was used at the Pattoki branch on 19 occasions only. On each occasion, fraudulent entries were posted. On 17 occasions, the data was transferred using a Lesco employee user ID belonging to Phool Nagar Revenue Office and on two occasions the data was transferred using a bank user ID. This suggests that
the fraud involved both Lesco and bank employees.
Lesco has traced the addresses used on four occasions for the fraudulent data transfer. This will be handed over to the FIA Cybercrime Division.
He said all fraudulent entries had been reconciled against the Statement of Account from the bank. However, bills declared fraudulent have been reversed by the management unilaterally.
Malik added the consent of the board was also not sought for reversing the bill payment entries. “We need a complete investigation to ascertain which customers were involved in this scheme,” he added.
This fraud would never have continued for two years had Lesco’s internal controls been operating properly, he observed.
Most importantly, the head office, which receives data from the IT centre, from the Revenue Office and the Statement of Account from the bank failed to perform a proper reconciliation of cash reported by the bank and the data coming from the Revenue Office.
Malik said the board of directors of Lesco had constituted an inquiry committee which recommended reconciliation of all bank accounts for the last two years to check any other similar fraud.
Disciplinary actions against the persons responsible for failure of the process have been taken by suspending them from their duty.
Published in The Express Tribune, November 7th, 2015.
Lahore Electric Supply Company (Lesco) Chairman Dr Musadik Malik has unearthed a fraud of Rs100.8 million in one of the sub-divisions of the company.
He has sent the case to the Federal Investigation Agency to probe the financial mismanagement.
Speaking at a press conference on Friday, Malik outlined various financial challenges being faced by the power company.
He said bills worth more than Rs100 million were fraudulently marked as paid from August 2013 to July 2015. The fraud was committed at the Phool Nagar Revenue Office. About once a month, large numbers of bills from all over Lahore were marked as paid at the Pattoki branch of a bank.
This was done by the improper usage of software provided by Lesco to various banks for the automation of bill collection. The software uses a security device which is entrusted to the bank. This device was used by someone at the bank for the illegal usage.
The software was used at the Pattoki branch on 19 occasions only. On each occasion, fraudulent entries were posted. On 17 occasions, the data was transferred using a Lesco employee user ID belonging to Phool Nagar Revenue Office and on two occasions the data was transferred using a bank user ID. This suggests that
the fraud involved both Lesco and bank employees.
Lesco has traced the addresses used on four occasions for the fraudulent data transfer. This will be handed over to the FIA Cybercrime Division.
He said all fraudulent entries had been reconciled against the Statement of Account from the bank. However, bills declared fraudulent have been reversed by the management unilaterally.
Malik added the consent of the board was also not sought for reversing the bill payment entries. “We need a complete investigation to ascertain which customers were involved in this scheme,” he added.
This fraud would never have continued for two years had Lesco’s internal controls been operating properly, he observed.
Most importantly, the head office, which receives data from the IT centre, from the Revenue Office and the Statement of Account from the bank failed to perform a proper reconciliation of cash reported by the bank and the data coming from the Revenue Office.
Malik said the board of directors of Lesco had constituted an inquiry committee which recommended reconciliation of all bank accounts for the last two years to check any other similar fraud.
Disciplinary actions against the persons responsible for failure of the process have been taken by suspending them from their duty.
Published in The Express Tribune, November 7th, 2015.