KARACHI: The Federal Investigation Agency on Monday registered a case against three former top officials of the Pakistan International Airlines, including two of its chairmen, and arrested a former director on charges of causing a loss of over Rs1 billion to the national exchequer.

FIA Sindh Director Amir Farooqi told Dawn that former PIA chairmen Nasser Jaffer and Irfan Elahi and then acting CEO Bernd Hildenbrand were booked in the case in which then director engineering Maqsood Ahmed was also arrested.

“They caused a loss of Rs1.25 billion and made advance payments for upgrade of business class seats and entertainment system in 2014-16,” he added. “The seats were never replaced and the system was never installed.”

The case was registered under relevant sections of the Pakistan Penal Code and Prevention of Corruption Act, 1947.

Officials accused of paying for cabin upgrades that never materialised

The FIA had initiated an inquiry against the PIA on the directives of the Supreme Court, which had directed a special audit in 2018.

The board of directors of the PIA in its 351st meeting in 2013 had approved upgrading business class seats and in-flight entertainment system, changing cabin ambiance including carpets, seats, covers, curtains, side trim, toilets, gallery, business class utility pack/gift items etc.

The FIA said ex-chairman Jaffer had approved a firm (Sogema) for changing seats of the entire fleet of Boeing 777s “dishonestly and illegally with ill motives by abusing his official position”.

The board of customer services committee did not recommend Sogema and it was also not the lowest bidder.

The FIA said then chairman Elahi and acting CEO Hildenbrand also dishonestly approved advance payments to Sogema and another firm, Panasonic, without bank guarantees and in violation of set rules.

Till November 2016, without executing any formal agreement, the PIA made an advance payment of €5,331,600 and $756,449 to Sogema and Panasonic, respectively, in violation of PIA rules.

Furthermore, “the material/items and services against which advance payments/agreements were made were never received by PIA,” according to official document.

Thus, the said accused persons by abusing their official position caused huge wrongful pecuniary losses to public exchequer without supply of any contracted goods or services from any company with their ulterior motives for their wrongful gain.

Published in Dawn, May 25th, 2021