NLC didn’t get its accounts audited since 2009, PAC told

December 16, 2015

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PAC Chairman Khursheed Ahmed Shah is seen in this file image. He directs the NLC to get its accounts updated by April 31. —APP/File
PAC Chairman Khursheed Ahmed Shah is seen in this file image. He directs the NLC to get its accounts updated by April 31. —APP/File

ISLAMABAD: The Public Accounts Committee (PAC) of the National Assembly was informed on Tuesday that the National Logistics Cell (NLC) had not got its accounts audited since 2009.

The auditor general’s office told a meeting of the committee that the NLC, an attached department of the Planning and Development Division, had committed serious violation of the Companies Ordinance 1984 by not maintaining audited accounts for four years.

Under section 233 of the ordinance, it said, the NLC was required to finalise its annual accounts within four months after the closing date of accounts for a specific year, but the organisation’s management had failed to provide its audited accounts for years 2009-10, 2012-13 and till Dec 31, 2013.

NLC Director General Maj Gen Mushtaq Ahmed Faisal told the PAC that the organisation was in the process of ‘upgrading’ the accounting system and it might take a few months to update its internal auditing mechanism. He said that since the NLC worked even in remote areas, it took time to collect data from everywhere.

PAC member Dr Arif Alvi said: “NLC is not a new organisation. Should we call it stringent? It is a case of incompetence.”

Sheikh Rashid Ahmed endorsed Dr Alvi’s view on the matter.

Shafqat Mehmood wondered why NLC’s audit reports could not be shared with the auditor general office for the past four years.

PAC Chairman Khursheed Ahmed Shah directed the NLC to get its accounts updated by April 31.

The committee also decided to summon the army’s inquiry report on the NLC scam and directed Secretary Planning Yousaf Nasim Khokhar to write to the defence ministry for obtaining the report.

The military authorities, after having carried out the investigation, sacked Maj Gen Khalid Zahir Akhtar and awarded ‘severe displeasure (recordable)’ to Lt Gen Afzal Muzaffar for illegally investing NLC’s money in the stock market.

The NLC director general informed the meeting that Zahir Akhtar had also been charged for brokering a deal for establishing farm houses.

According to audit reports, the NLC signed a joint venture agreement in 2006 with Friends & Families (Pvt) Ltd (FFPL) for establishing a farm housing scheme. The cost of the land purchased for the scheme was Rs578 million. The NLC paid Rs481.75m while the remaining Rs 96.25m was to be paid by FFPL.

According to revenue record, the land was transferred at an average rate of Rs50,000 per kanal. It showed that the payment of Rs481.75m was made to the land owners in excess of mutated value of the land.

NLC chief Maj Gen Faisal said the previous management had written Rs50,000 per kanal in the record to avoid taxes levied on mutation, but the land was not purchased above the market price at that time.

Auditor General of Pakistan (AGP) Rana Asad Amin said it was a violation of rules that a government department had committed tax evasion and sought action against those responsible.

PTCL AUDIT: When the PAC asked the AGP about the audit of Pakistan Telecommunication Company Limited (PTCL), he said the company had rejected a request for the audit.

The PAC chairman said the government owned 74 per cent share in PTCL and, therefore, the AGP office had mandate to hold audit of the company.

The AGP informed the committee that the PTCL management had also threatened to take the auditors to international arbitrations. He said the 2004 supplementary agreement signed between the Musharraf government and UAE telecom company Etisalat was a favour of the latter.

He said the PAC might summon the then minister for IT and telecommunication and the Privatisation Commission secretary to inquire about the need for the supplementary agreement.

The AGP said two separate valuations of PTCL properties had been allowed under the agreement. These properties were those which could not be mutated on PTCL.

He said that because of a dispute over the valuation of the properties, Etisalat had stopped paying the rest of the amount. It also demanded withdrawal of all court cases against PTCL as well as award of 3G licence to the company without taking part in auction.

Published in Dawn, December 16th, 2015