May 08, 2007	Tuesday	Rabi-us-Sani 20, 1428

KARACHI, May 7: Following some major international corruption scandals last year, the Pakistan Boxing Federation (PBF) chairman Anwar Chowdhry is once again in the limelight, this time for maintaining a secret PBF bank account and not filing income tax return.

Investigations conducted by Dawn showed that PBF is holding a bank account No 511-2100-022956 at Bank of Tokyo-Mitsubishi UFJ Ltd in Karachi, with Rs1.645 million in its account as of June 30, 2006. However, the most surprising factor is that there is no record whatsoever of the transactions made through the account in the PBF books.

“PBF claims that transactions of the bank account have not been made part of finance books as the account is in the name of Pakistan Amateur Boxing Federation (PABF) which is now called PBF.

“We only came to know about this bank account when PBF sent the bank statements this year along with other documents by mistake. All this is definitely wrong. We don’t know how much cash was in the account during previous years, Ali Raza Namdar of Namdar & Co, which audited the PBF accounts, told Dawn.

“The name of Pakistan Amateur Boxing Federation was changed to Pakistan Boxing Federation and, as such, all assets have become property of federation. Not reflecting the above transactions in the book of accounts of the federation will be misleading, lead to misappropriation and will not give a true and fair view of the state of federation’s affair as on June 30, 2006 and June 30, 2005,” audit report said.

PBF’s reluctance in putting the bank statements on record strongly indicates that it might not be a simple case of weak financial management. If one considers reasons for not making the bank statements part of record, then PBF could have opened a new account on PBF’s name and transferred the cash.

More astonishingly, PBF never disclosed the bank statements, though federation’s nomenclature was changed in 2004.

The auditors, in their annual report for the financial year from July 1, 2005 to June 30, 2006, have strongly suggested PBF to file income tax return or it could face legal action.

The auditors have recommended that although a huge amount of tax has been deducted at source, it is being considered as expenses while no income tax return is being filed which is blatant violation of Finance Act 2006.

“Considerable amount of tax has been deducted at source and same is treated as expenses for the years as per prevailing practice for which no tax been claimed by tax department.

“As such no return of income tax is filed. By virtue of Finance Act 2006, it is mandatory to file return of income for non-profits and welfare institutions with tax department.

“Non filing of tax return will attract penal provisions under section 114 to be read with section 182 of the Income Tax Ordinance 2001. We suggest this issue be given due consideration in the benefit of the federation without any further delay,” auditors wrote in March 3, 2007 report.

Another serious matter raised in the report was PBF’s involvement in violation of International Accounting Standard by considering fixed assets as expenses without taking into consideration the rate of depreciation.

Among other points raised in the report which, according to PBF secretary Shakeel Durrani, has also been authenticated by the auditors, are weaknesses in internal control, maintenance of account books, minutes of meetings, budgets and comparison.

“There are no proper financial rules specifying payment limits and issuance of bearer cheques in certain cases. Payments in cash and through bearer cheques attract penal provision under Income Tax Ordinance 2001. In many cases proper bill/invoices were not attached to the vouchers. Chart of withholding tax is not being followed properly. All assets should be in the name of federation to ensure ownership of the entity.

“Federation is not maintaining proper cash book, ledger and vouchers. Hypothetical cash book prepared was found with errors and in some cases without head of accounts.

“A tailor-made account software was arranged on the request of PBF secretary but not utilized. No records are kept in respect of stocks or uniforms, boxing stuff and kits.

“We recommend that PBF meetings minutes should be maintained to evidence management decisions such as budget approval and capital expenditures.”

The report said that an extraordinary amount of Rs3,487,975 (2005: Rs4,323,487) on air fare, Rs319,217 (2005: Rs325,178) on guest and accommodation, Rs1,781,950 (2005: 1,065,857) on other tournaments and Rs1,115,046 (2005: 41,590) as salary to Cuban coaches has been incurred.

But later these expenses were adjusted in specific heads accordingly. The auditors recommended that specific approval at federation meeting with benefits achieved to conduct the expenses should be furnished to them.

“We have admitted there are lapses in financial management and auditors have authenticated the report after being assured PBF would rectify the faults. As for bank account, nothing has been done with mala fide intention,” Shakeel said.

Namdar also claimed PBF had asked him to take the report back having adverse remarks and PBF might change the auditors for next audit. Shakeel has denied the charge, saying Namdar never pointed out lapses in previous reports.

Chowdhry was also involved in violating International Boxing Association (AIBA) financial rules last year by refusing to provide supporting documents for audit when he was AIBA chief.

He was also accused of corruption by an AIBA executive committee member Rudel Obreja who raised doubts on transfer of $350,000 from a Swiss bank to his daughter’s account in Karachi.