LAHORE: A tug of war has started between the board of directors (BoD) of the Lahore Waste Management Company and its management over the issue of payment to the secondary partner (firm) of a joint venture hired for the waste collection in the Data Ganj Bakhsh Town.

The BoD and its legal committee termed the payment illegal, sought action against the officers concerned, restraining the company’s chief financial officer (CFO) from work. On the other hand, management of the company declared action of the BoD committee unlawful since no meeting was called by the board by serving one-week notice to the members.

While the BoD legal committee sought sending a corruption reference to the Anti-Corruption Establishment (ACE) and taking departmental action, the company’s CFO rejected its recommendations, saying the payments were made under rules and regulations.

“There is an internal agreement/undertaking between both the partners, which was made available to us. According to this, in absence of the lead partner, payment can be made to the secondary partner,” CFO Talal Chand told Dawn.

According to the minutes of the BoD committee meeting, the agenda was presented in the 134th meeting held on Jan 6 and the matter was referred to the legal committee to deliberate upon and to recommend the legal action against a payment made in violation of the settled terms and conditions of a joint venture by the LWMC’s finance department.

“Despite having knowledge of the meeting, neither the LWMC CFO nor any of his representatives appeared before the committee for providing general assistance. Even the finance department didn’t provide the record for inspection,” read the minutes.

The committee was apprised that under Clause 6.1 of the special conditions of the contract between LWMC and the joint venture, the finance department is bound to make all payments only to the joint venture’s lead partner and no deviation of any sort was permissible in this regard. However, some payments were made in violation of the terms and conditions of the agreement.

“To safeguard and protect interest of the public at large and state exchequer, criminal action is a must for this material violation of the contract. Therefore, the committee should also advise the management to restrain the CFO from work till finalisation of this case. The committee should also advise the management to send a corruption reference against the CFO to ACE besides initiating a departmental action in this regard,” minutes explain the decision taken during the meeting.

The convener of the committee (Safdar Shaheen Pirzada) sought recovery of the payment made unlawfully. He also sought

releasing of all pending payments/bills to the joint venture’s lead partner.

Talking to Dawn, Mr Talal Chand said the issue of payment was related to the month of February 2022. Through a letter signed by both the partners, submitted to the company on Feb 23, 2022, the joint venture’s partner had stated that with reference to the award letters of Oct 18, 23 and 29, 2021, the payments should be made in the name of the secondary partner.

“In March, an undertaking was also submitted to the company, stating that since one of the partners was abroad, the payment be made to the other partner.”

Mr Chand also showed an internal agreement between both the partners (both of profit/loss shareholder of 50/50), according to which, the secondary partner could obtain the cheque/payment from the LWMC directly if the payments to vendors, labour etc were not cleared by the lead partner on time.

“Recently, a stay order has also been issued by the court restricting release of payments to anyone. In this situation, the company cannot make payment to any of the partners,” he said, terming the BoD and legal committee’s recommendations unlawful.

Published in Dawn, February 4th, 2023