PAC displeased with irregularities in steel mills

Staff Report

ISLAMABAD: The National Assembly’s Public Accounts Committee (PAC) on Thursday expressed strong displeasure at the financial irregularities in the affairs of the Pakistan Steel Mills (PSM) and directed the secretary of the Ministry of Industries and Production to assert his supervisory role to safeguard the interests of public sector organisations.

The PAC was displeased by two decisions taken by PSM management: investing in the Arabian Sea Country Club and arranging loans for its employees from the House Building Finance Corporation (HBFC) for its employees. The PAC termed the two decisions imprudent and a deviation from the PSM charter of duties.

The PSM management also made an unnecessary interest payment amounting to Rs 318.16 million to the (HBFC) on behalf of the allottees of a housing project. The PAC was informed that PSM management invested Rs 5 million in the Arabian Sea Country Club and leased out 300 acres of their prime land. The management then failed to recover the agreed rent amounting to Rs 1.1 million by January 2002.

Furthermore, a provision was created in the accounts for 2001-2002 to cut the initial investment from Rs 5 million to Rs 1.87 million. The PAC also took up a net loss of Rs 20 million incurred by PSM because of the purchase of defective rolls for cold rolling mills and the failure to cash Performance Bank guarantees.

The PAC ordered the recovery of the amount in question from suppliers and said they should be blacklisted and an inquiry initiated to fix responsibility.

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