ISLAMABAD: Along with all the other challenging tasks left to him by his predecessor, army chief General Raheel Sharif will also have to complete the much-publicised inquiry that is pending into allegations of financial mismanagement committed within the National Logistics Cell (NLC) between 2004 and 2008, estimated to have resulted in losses to the tune of Rs2 billion.

The ministry of defence recently conveyed to the new public accounts committee (PAC) of the National Assembly that because of the change of command, the matter was still under investigation and that the outcome would be furnished in the due course of time. Syed Khursheed Shah of PPP, who heads the PAC, sought the information from the ministry of defence.

The just-concluded session of the National Assembly was also informed in writing by the law division that “the PAC has directed the secretary, ministry of defence, on Jan 8, 2014, vide its letter No. F.1(43)/ 2012-PAC-Imp (P&D) to provide the record” related to the NLC case.

Earlier, in February 2009, the public accounts committee of the National Assembly as it was then constituted was informed about the suspicions of financial mismanagement. Subsequently, four different inquiry committees held five former senior officials of the NLC — three retired military generals and two civilians — responsible.

Lt-Generals (retired) Khalid Munir Khan and Mohammad Afzal Muzzafar served as officers in charge of the NLC from January 2005 to June 2005 and from June 2005 to October 2008 respectively; Maj-Gen (retd) Khalid Zaheer Akhtar was the director general of the NLC between July 2002 and January 2008; Najibur Rehman was the director, finance and accounts, from October 2002 to April 2007; and Saeedur Rehman worked as the chief finance officer from June 2004 to October 2008.

As was first reported to the PAC by the auditor general of Pakistan and then confirmed by other inquiry committees ordered by Chaudhry Nisar Ali Khan, the then chairman of the PAC, the five are said to have invested Rs4.3bn in the stock exchange. The investment was made in violation of government rules and resulted in the loss to the entity.

During a PAC meeting held in June, 2010, committee members were informed that because of the faulty investment in the stock exchange, for which its former bosses borrowed heavily from banks at high rates of interest, the NLC had to bear a loss of Rs2.7 million on a daily basis on account of interest.

Allegedly, the five men not just borrowed money from commercial banks on high interest rates but also invested pensioners’ money in the risky business of the stock market. They are thought to have received commissions from companies through which the money was invested.

When the former PAC chairman Ch Nisar was about to make the committee’s final recommendations, in November 2010 the then army chief Gen Ashfaq Parvez Kayani decided to conduct an inquiry at the level of the army. As a legal requirement for the military’s court of inquiry, the three retired generals were taken back into active service.

After endlessly waiting for the findings of the court of inquiry set up by the army, former PAC chairman and by then incumbent interior minister Ch Nisar recommended disciplinary action, including the registration of cases against all the five former officials. The PAC also asked the National Accountability Bureau (NAB) to carry out further investigations to determine individual liability.

NAB couldn’t make any progress because the entire record of the earlier investigations was with the ministry of defence.

Following the PAC recommendation, in July 2011 NAB wrote letters to the director general of the NLC, the staff duties directorate of the GHQ, the director operations of the NLC, the judge advocate general department, GHQ, the adjutant general branch, GHQ, and the secretary of defence for the provision of the record, but to no avail. Nobody was available for comment from the ISPR.