Hascol may redo balance sheets after ‘false purchase orders’ surface

Published June 22, 2021
Hascol Petro­leum Ltd said on Monday it could restate its financial statements in view of fresh evidence received from a whistleblower about “a series of false purchase orders” recorded in the company’s 2019 books. — Photo courtesy Hascol website
Hascol Petro­leum Ltd said on Monday it could restate its financial statements in view of fresh evidence received from a whistleblower about “a series of false purchase orders” recorded in the company’s 2019 books. — Photo courtesy Hascol website

KARACHI: Hascol Petro­leum Ltd said on Monday it could restate its financial statements in view of fresh evidence received from a whistleblower about “a series of false purchase orders” recorded in the company’s 2019 books.

In a note released through the Pakistan Stock Exchange website, the oil marketing company said its board audit committee concluded last week there was “sufficient evidence in support of the accusation to justify referring the matter to the full board of directors”.

The statement, attributed to company chairman Sir Alan Duncan, said the entity would revise its past income statement in addition to the past and present balance sheets if the accusation turned out to be correct.

Hascol has been in financial trouble since 2018. Its revenues have dropped, losses mounted and loans risen, sending its share price down from over Rs300 three years ago to just Rs11.23 on Monday. Regulatory actions against the company in Khyber Pakhtunkhwa for unauthorised storage and selling of petroleum products also marred its reputation last year. The company has lately been in news for abrupt resignations by auditors as well as members of its board and senior management.

Revisions in financial accounts are not expected to make any material difference to the company’s recent and future operations, the statement added.

Speaking to Dawn, Arif Habib Ltd Research Analyst Arsalan Hanif said the restatement exercise could cause a material impact on the share price of Hascol, which held a seven per cent share in the oil marketing segment for the first 11 months of 2020-21.

“I think any restatement will make the numbers more favourable,” he said, noting that the allegedly false purchase orders must have been recorded at higher-than-actual rates.

“The share price can possibly go up from where it currently is. If someone still owns the stock, I’d advise them to hold on to it for now,” he said.

Hascol’s retail fuel volumes witnessed a decline of 48pc year-on-year in May.

Hascol hasn’t announced its financial results since Sept 30, 2020. Its quarterly loss stood at over Rs3 billion, with long-term liabilities amounting to Rs14.5bn. The company said at the time that one of the reasons for the delay in the July-September quarterly results was the resignation of EY Ford Rhodes as co-auditors and the appointment of Grant Thornton as auditors.

However, the latest statement from the company chairman informed shareholders that even Grant Thornton had resigned as its auditor for 2020 with immediate effect.

Published in Dawn, June 22nd, 2021

Opinion

Intolerance grows
Updated 18 Oct 2021

Intolerance grows

Failure to pass the bill undermines the writ of the state, highlights its inability to guarantee citizens’ protection and freedom.
Moral panic
Updated 18 Oct 2021

Moral panic

If conflation of culture with religion is taken as true, there is mounting evidence that society has gone closer to such roots.
Challenges amid discord
Updated 18 Oct 2021

Challenges amid discord

Institutional disharmony and polarised politics are impeding efforts to address the country’s challenges.
Climate & youth
Updated 17 Oct 2021

Climate & youth

Disillusionment and anxiety are on the rise among youth as they confront the diminishing prospects of a better tomorrow.

Editorial

Financial troubles
Updated 18 Oct 2021

Financial troubles

Growing trade gap is fuelling the current account deficit and bringing the already meagre foreign exchange reserves under stress.
18 Oct 2021

Complaint portal

IN a ruling on Thursday, the Mingora bench of the Peshawar High Court held that the Prime Minister’s Performance...
18 Oct 2021

Capital’s master plan

IT is encouraging that on Thursday, the restructured commission formed by the federal cabinet to revise ...
Carnage in Kandahar
Updated 17 Oct 2021

Carnage in Kandahar

Pakistan’s anti-extremism policy is in many ways half-baked and inconsistent.
17 Oct 2021

Sanctity of contracts

PAKISTAN is facing yet another international dispute before the International Centre for Settlement of Investment...
17 Oct 2021

New sports policy

THIS week, the Pakistan Football Federation Normalisation Committee chief Haroon Malik was in Zurich to hold ...