ISLAMABAD, Oct 7 The Supreme Court summoned on Wednesday internal and external audit reports of the Pakistan Steel Mills for 2008-09 and refused to accept global recession as a major reason for the Rs22 billion loss it suffered last year.
A bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Jawwad S. Khawaja had taken up suo motu notice of the sacking of PSM chairman Moeen Aftab Sheikh on the basis of an article by Dr Ayesha Siddiqa which appeared in daily Dawn on Sept 11, without giving a show-cause notice.
In her article Dr Ayesha had mentioned Metropolitan, Amreli, Abbas Engineering, Al-Abbas Steel and Abbas Steel as main beneficiaries of the new sales policy of Pakistan Steel.
Mr Sheikh was fired by the Establishment Division on the advice of the Prime Minister's Secretariat because of heavy losses suffered by the mills, a PSM law officer told the court.
The chief justice, who headed the bench which had reversed the privatisation of the PSM in August 2006, recalled that it was the most profit-making industrial concern when it was put on sale.
After rejecting the reply submitted by Deputy General Manager (Legal) Qamar Mehmood Sindhu, the court ordered both the incumbent and former chairmen of the PSM to submit para-wise comments on facts relating to the losses mentioned in Dr Siddiqa's article.
The court directed the director general of FIA to submit findings of a probe conducted by the organisation into affairs of the steel mills and asked the industries and production secretary to file comments on contents of the article.
Mr Sindhu conceded that services of Mr Sheikh, who was chairman from May 26, 2008, to August 18, 2009, were terminated and he was blamed for the losses, but the PSM had nothing to do with it since the entire process was handled by the ministry concerned.
He said the losses had slowed down production of billets, but steel manufacturing was not stopped.
Referring to liquidity crunch being faced by the mills, the PSM official said the sale of billets had fallen to Rs1.13 billion in October 2008 from Rs5.5 billion in July 2007.
He said the prices of PSM products had dipped in the third quarter of 2008 because cheap imported products were available in the market.
He said the mills had been writing to the government, especially the finance secretary, to safeguard the interests of the PSM by levying anti-dumping duty.
The court rejected the reply and asked the PSM management to submit its response to the allegations made in the article that the steel mills was suffering losses because it was giving undue benefit to certain dealers.