ISLAMABAD, Oct 19: The Public Accounts Committee (PAC) has directed the Ministry of Defence Production to take steps to overcome financial crisis in the Karachi Shipyard and Engineering Works Ltd (KS&EW) and identify those behind pushing it to the verge of bankruptcy.

In a meeting here on Thursday, the committee expressed concern over financial irregularities in the KS&EW which suffered a net loss of Rs70.366 million during 2000-01.

The company, whose liabilities crossed Rs1.668 billion as against its assets of Rs623.307 million, could not discharge its duties in a required manner, especially in case of the Employees Provident Fund which stood at Rs493.683 million as on June 30, 2001, noted the meeting.

Chairing the meeting, MNA Malik Allah Yar Khan directed the ministry to identify the individuals and groups responsible for the financial irregularities so that they could be brought to book.

Secretary Defence Production Lt-Gen (retd) Shahid Tirmazi and Director-General KS&EW Admiral Rao Iftikhar were also present on the occasion.

The KS&EW losses touched Rs2.378 billion on June 30, 2001, which eroded its entire equity of Rs464.223 million.

The DG KS&EW told the committee that the company had hired the services of counsels to help it recover its money from the various companies.

The committee was informed that the company spent an avoidable expenditure of Rs3.611 million as mark-up, and delayed the retirement of import documents against 19 letters of credit just because of poor performance.

The committee observed that official negligence and non-availability of latest equipment in the company could also not be ruled out as factors causing financial bankruptcy.

The committee was told that KS&EW was handed over to the defence production ministry only recently and that a comprehensive plan for its revival had been chalked out.

Secretary Defence Production Shahid Salim Tirmazi said that the government had approved a special package for KSEW under which it would get loans from commercial banks for upgrading its machinery.