ISLAMABAD: The Public Accounts Committee (PAC) was informed on Thursday that the Board of Investment (BoI) suffered a loss of Rs212.2 million as it did not invest its funds for profit considering it Riba.

BoI secretary Fareena Mazhar, in response to the PAC’s query about the audit para “non-investment of funds after maturity” that caused the Rs212m loss to the exchequer, said the board had experienced change of command since 2018 as its four secretaries were changed during this period. “Moreover, the decision-makers were against investing the funds for profit considering it Riba,” she said.

The audit report on BoI’s accounts for the 2019-20 period highlighted that “every government officer should realise fully and clearly that he/she will be held responsible for any loss sustained by the government through fraud or negligence on his/her part and that he/she was also be held personally responsible for any loss arising from fraud or negligence on the part of any other government officer to the extent to which it may be shown that he/she contributed to the loss by his/her own action or negligence”.

According to the audit report, “non-investment of funds after maturity was a serious lapse on the part of the management”.

PAC chairman Rana Tanveer Hussain reminded Fareena Mazhar that people could take a decision for not investing their personal money for profit, but this was the public money and the management should have not made this decision.

PAC told that since its inception the board has failed to frame rules

He directed her to conduct an inquiry and fix responsibility for this decision.

Deputy auditor general Maqbool Gondal informed the committee that since its inception in 2001, the BoI has failed to frame its rules and regulations.

The BoI secretary told the committee that they were seeking guidance from the finance ministry in this regard.

PAC member Munaza Hassan pointed out that Section 23 of the BoI Act empowered the board to frame the rules. She said the BoI was not under any obligation to seek an advice on an issue which had been clearly defined in the statute.

The committee directed the BoI to frame the rules within three months.

The audit report further highlighted that due to poor performance of the BoI there was a substantial decline in foreign direct investment (FDI).

The BoI secretary told the committee that China contributed about 70 per cent of total investment in the country and the FDI declined drastically as Chinese investors retrieved a substantial amount from the already commissioned projects related to the energy sector.

According to the BoI reply, “there was gradual increase in the FDI from 2013 to 2017, but due to problems beyond BoI’s control like energy shortage, infrastructure, law and order and global recession, targets of investment policy could not be achieved”.

“It means that the BoI has miserably failed to achieve the objectives for which it was established, so it should be abolished,” remarked Rana Tanveer.

Munaza Hassan advised the BoI to concentrate on other countries instead of one country.

The PAC chairman directed the BoI secretary to prepare a detailed presentation related to the investment along with the suggestions to improve efficiency of the institution.

Published in Dawn, June 18th, 2021