ISLAMABAD: In a rare move, the Sui Southern Gas Company Ltd (SSGCL) has alleged that Pakistan Steel Mills’ audited accounts for 2021-22 had violated the current scheme for revival of the PSM approved by its board and the federal government.
In a statement, the Karachi-based gas utility raised questions over the auditor’s report on PSM’s financial statement for 2021-22 but precisely confirmed the auditor’s report. It is very uncommon for companies to comment on the financial statements of other firms.
The PSM’s external auditors — Crowe Hussain Chaudhry & Co — had reported in the financial statement that the PSM management claimed that based on the decisions of the Economic Coordination Committee (ECC) of the Cabinet, SSGCL should waive late payment surcharge (LPS) which the gas utility did not accede to and stopped gas supply during the period and filed a suit against PSM for recovery of outstanding bills and LPS in Sindh High Court.
The PSM also filed a counter suit against SSGCL for Rs38.6bn, claiming damages for losses suffered by PSM owing to the discontinuation of gas supply from June 2015.
The SSGCL challenged the above position but itself confirmed that auditors had fairly reported SSGCL’s position as well. “As per SSGCL record no such ECC decision on the waiver of LPS exists — to be implemented by SSGC”, said the gas company. Strangely though, in the very next line the SSGC claimed that “the referred disclosure is against the very spirit of the current scheme of arrangements approved by the federal government and PSML Board for the revival of PSML”.
The SSGCL claimed that a huge sum of Rs87.131bn (including LPS) was recoverable from PSML while it has been making partial payments after the release of budgetary grants. It said the SSGCL was supportive of the government’s revival plan and still providing 2mmcfd of gas amounting to Rs80-85 million per month to keep its coke oven batteries intact.
Earlier on April 14, the SSGCL wrote that it was ready to issue its no-objection certificate (NOC) for 1,229 acres of PSM land and core pperating assets to Steel Corp (Pv) Ltd based on Rs39.2 million per acre value determined by jointly appointed land valuator – KG Traders — in lieu transfer of 1,228.21 acres of PSM land to SSGCL against settlement of Rs48.15bn including principal and LPS.
The board of directors of PSM refused to accept the unilateral evaluation of its land by SSGCL and expressed great concern “over delay in issuance of NOC for transferring PSM’s core operating assets to Steel Corp (Pvt) Ltd and non-withdrawal of litigation.”
The PSM board asked the SSGC to withdraw its litigation and issue the requisite NOC to transfer the PSM’s Core Operating Assets to Steel Corp (Private) Limited on an emergent basis to avoid further delay of PSM’s revival and privatisation process.
The PSM’s management believed that not only the land evaluation price offered by the gas company was one-sided and precariously low but even the working for liabilities was unfair and strings attached to the offer were unacceptable.
Published in Dawn, May 5th, 2023