KARACHI: The Federal Investigation Agency (FIA) on Friday arrested senior officers of the Pakistan Steel Mills for alleged misappropriating millions of rupees in the procurement and contracts of medicine supplies for the hospital of the country’s largest industrial complex after months of probe into the scam.

A senior official said the corporate crime circle of the FIA arrested general manager Nusrat Islam Butt, manager Dr Mustansar Gillani and senior officer of accounts section Fahad Khan at their homes.

However, a former director of Pakistan Steel Mills Hamid Pervez was still at large and could not be arrested during a raid on his home, he added.

“The FIA, which initiated an inquiry on a complaint filed by a local businessman, led to the findings that several officials of the Pakistan Steel Mills were allegedly found involved in bungling of millions of rupees while procuring medicines for the state-owned steel giant’s employees that had already been facing a financial crisis,” said inspector Muhammad Iqbal, the FIA’s investigation officer.

“After the months-long inquiry the FIA found the evidence and witnesses to book the officials concerned in different cases. For that we have moved a request with our findings report to the high-ups seeking their nod for the registration of FIRs against at least one former and four serving officials, who are found directly involved in such malpractices, which cost the national exchequer millions of rupees. We are just waiting for a green signal from our high-ups to register the cases.”

An official at the PSM said the case registered under Sections 409 [criminal breach of trust by public servant, or by banker, merchant or agent], 420 [cheating and dishonestly Inducing delivery of property], 468 [forgery for purpose of cheating], 471 [using as genuine a forged document], 161 [public servant taking gratification other than legal remuneration in respect to an official act] and 109 [punishment of abetment if the Act abetted committed in consequence and where no express provision is made for its punishment] of the Pakistan Penal Code were registered against the arrested officials.

The financial crisis being faced by the PSM led to the stoppage of salaries to its employees. In September this year, the Economic Coordination Committee of the federal cabinet approved two months’ salary amounting to Rs760 million for employees of the multi-billion-rupee state-owned behemoth.

Amid such a crisis and financial crunch, the FIA officials said the misappropriation and leakages of funds was one of several causes of its downfall which was needed to be addressed at the earliest. The recent investigation into one of the allegations was part of the same exercise.

“The officials found allegedly involved in the misappropriation are in charge of facilities in the medical department, chief medical officer, APEO, accounts officer and an ex-APEO of the Pakistan Steel Mills,” said another FIA official while citing content of the findings report.

“During the course of inquiry, it has been established after scrapping tenders, alleged persons in collusion got a budget approved for purchase through imprest account. At first stance they got Rs10 million of which Rs3m was used for purchase through imprest account and Rs7m was used through the spot purchase cell of the Pakistan Steel Mills.”

Later on, he said, this provision of budget rose to Rs26 million and most purchases were made from unregistered sellers of medicines and from “freelancers” who were originally engaged in supply of hardware, tools and general items. Even “bogus vouchers” were used to show supply and payments, added the official.

Published in Dawn December 10th, 2016