ISLAMABAD, June 23: The financial and administrative affairs of the Pakistan State Oil (PSO), the country’s largest company in terms of revenue and biggest fuel supplier, have come under special scrutiny of the new government.

A senior official told Dawn that a special audit and inquiry into internal controls of the PSO had been ordered after complaints about alleged irregularities into fuel supply deals with foreign suppliers, oil imports and politically motivated recruitments and promotions made over the past few years.

This is the first major investigation launched by the PML-N government since its installation on June 7.

Earlier, cases relating to $5 billion long-term import deal and quality of petroleum products, particularly furnace oil, being marketed in the country had been taken up by the National Accountability Bureau (NAB) and the Supreme Court.

Separate inquiries were conducted by the company’s board of directors and the petroleum ministry over the past few months, but remained inconclusive.

“We are not in a position to talk about specifics or make any allegation until initial assessment of the PSO’s affairs and scrutiny of its record is complete. It will take time,” said a senior official of the petroleum ministry. “But, we can confirm that a team of audit, administrative and financial professionals is looking into the affairs of the company from different angles. The inquiry is spread over 30 components.”

A spokesperson for the PSO confirmed that the government had seized three-year record of the company from 2010-11. “We cannot comment at the moment whether it is something unusual or there are some specific complaints,” said the spokesperson, Maryam Shah. “We feel the new government is examining financial and internal controls of the company.”

She said that Naseer Ahmed, the chief finance and accounts officer of the petroleum ministry, had been at the company’s headquarters in Karachi for a few days. He compiled a lot of documents pertaining to the last three years and took them to Islamabad. “Perhaps they want to make an independent assessment,” she said.

A list of documents the federal government had ordered the company to furnish indicates that the inquiry would be widest ever conducted into any public sector company.

For example, the company was asked to provide balance sheets, profit and loss accounts and a list of promotions made over the past three years, including the names of promoted officers, the year of promotion and their qualification to determine whether the promotions were made under political influence.

With its receivables standing at over Rs160 billion and huge financial costs, the PSO’s record relating to late payments of letters of credit and ship-wise details of demurrage paid for the years 2010-11, 2011-12 and 2012-13 have been seized by the government.

The company was asked to provide details of its contract for SAP (a business management software) and its renewal, total freight paid by oil companies’ advisory committee to the PSO and sales volumes for the last three years with details of carriage bills.

The government also sought a list of contracts awarded over the last three years for billboards and hoardings across the country, amount spent on advertisements in the same period and the names of newspapers and other media to which the advertisements had been given, the lists of defaulted letters of credit and bank loans with the loan amount, mark-up and the purpose of obtaining the loans.

More importantly, details of terms and conditions of agreements with the Kuwait Petroleum Company (KPC), premium paid to it and a fuel supply agreement with the Bakri Oil Trading Company despite its cancellation by NAB are also being scrutinised.

The government has also seized documents containing justifications for the PSO entering into agreements with the KPC at Hub, purchase of a ship from it in foreign currency allegedly in violation of procurement rules, sales and purchase agreements with local “paper companies” for supply of products and the volume of discounts in high speed diesel given to the companies.

The petroleum ministry is also reported to have questioned an investment in a coal-related project with Engro Corporation and asked whether it was not beyond the mandate of an oil supplier, and sale of Gilbargo units worth Rs2.1 billion.

It is also examining the report of an inquiry into corruption pertaining to base oil and looking into internal and government audit reports for the three years.

Besides, the records of diesel and petrol provided on credit to dealers with the volume of oil on or around price adjustment dates and a contract with the Pakistan National Shipping Corporation for import of PSO products are also being examined.