RAWALPINDI: An audit report issued by the director general, commercial audit and evaluation, on the accounts of Pakistan International Airlines Corporation (PIACL) has found a number of irregularities, non-recoveries, violation of rules and regulations, especially in the appointment of the chief executive officer, recommending his removal from the position.

The report said that Air Marshal Arshad Malik is holding two positions — one of an air marshal in PAF and the other of CEO in the PIA. If properly selected, he would have resigned from PAF to join as CEO in the PIACL, it added.

His appointment as CEO is “based on clear favouritism, mala fide and out of procedure process”. The report held his appointment irregular.

“Further he has managed his appointment by a mix of SECP Rules and Deputation...for Armed Forces officer to keep the benefits of both sides which is a gross violation of relevant rules and transparency.”

It said that “immediate recovery of allowances ... be initiated and the case be referred to independent agency to probe the matter of irregular appointment”.

The aviation division should hold a high-level inquiry to fix responsibility on persons at fault, especially on the board of directors which has committed the very blunder earlier highlighted by the Supreme Court in the case of Mr Cyan, then CEO of PIACL.

The audit report contains 16 paras noting irregular appointments, including that of the CEO; “irregular procurement of services on account of development of indigenous IFE solutions resulted in dubious financial deal worth Rs700 million; operating losses amounting to Rs5,282m; illegitimate elevation in allowances and benefits of officers on deputation from PAF (Rs71.86m); irregular induction of staff with fake degrees (Rs25.68m) and irregular payment due to dual benefits rewarded to CEO (Rs2.995m)”.

The audit report also recommended initiation of an inquiry against the district manager, Rawalpindi, and removal from the position for obtaining approval of advances and also getting the advances settled by providing fake invoices and then certifying them to mislead the management.

The PIA spokesman, reacting to the audit report, clarified that since the matter is being heard by the Supreme Court, the airline won’t comment on the matter, adding that it would respect the court’s decision.

He said that in light of the apex court’s order, the CEO has already handed his powers to the board of directors.

The spokesman, in a late-night press release, said that some elements with vested interests had been misleading the auditor general to make audit paras.

Meanwhile, Muhammad Ali Tabba has stepped down as member of the board of directors.

Talking to Dawn, he said the reason for his decision was “lack of time to give to the responsibility”.

A replacement director is likely to be announced soon. The move comes as pressure mounts on the airline’s management to comply with the auditor general’s recommendations as well as after finding the appointment of the CEO irregular.

Published in Dawn, February 7th, 2020