The Public Accounts Committee (PAC) is to recommend action against three former lieutenant generals accused of causing Rs4 billion loss to the National Logistics Cell (NLC) by throwing money in the country's volatile stock exchange during the Musharraf regime without any lawful authority.
The inquiry report against these Army generals, which remained frozen for nine months, is finally being brought before the Public Accounts Committee in its next meeting to decide the fate of these former bosses of the NLC who had even borrowed Rs2billion from the banks for investment in the stock exchange and lost the whole money with the collaboration of the stock brokers.
The report contains documentary evidence to confirm their involvement in the scam. Presiding over the PAC meeting on Tuesday, its chairman Ch Nisar Ali Khan dropped a clear hint as to what was in store for these three retired Army generals, when he announced to finally bring the report on the agenda of the next meeting.
The PAC chairman, who was careful not to give the impression that he has decided in advance what was going to happen in the next PAC meeting, however, dropped clear hints to all present there in the meeting that his committee was all set to recommend extraordinary action against these former Army generals.
He told the meeting that the inquiry report has already been distributed among PAC members. "I have made up my mind what I am supposed to do on this issue (inquiry report into NLC scam). But first I want to seek your guidance before proceeding", Nisar told the Auditor General of Pakistan Tanveer Agha in the meeting.
Ch Nisar also praised MNA Nadeem Afzal Chann who was chairman of the National Assembly special committee on Railways, which has recently given its report to the House recommending action against the three former army generals, Lt General Javed Ashraf Qazi, Lt General Saeeduz Zafar and Major General Hassan Butt. Nisar said Mr Chaan and his committee had done a great job.
Ch Nisar had earlier come under severe criticism for dumping the report which was sent to him nine months ago but he had assured that it would be taken up for consideration as and when the audit reports of concerned ministry (Planning Division) would be brought before the committee.
Meanwhile, the inquiry report into Rs4 billion scam in NLC has confirmed the involvement of two retired lieutenant generals, one major general and two civilians in causing colossal loss to the institution since 2003 by openly defying the orders of the then prime minister Shaukat Aziz.
The report also revealed that even pension funds of the NLC employees were also invested in the volatile stock market by these generals, who remained at the helm of affairs since 2003. The most shocking finding of the inquiry report is that these generals borrowed Rs2 billion from four banks and threw them into the stock market, of which Rs1.8 billion had already been lost. The banks from where the loans were obtained are Bank Al-Falah (Rs650 million), National Bank of Pakistan (Rs90 million), UBL (Rs800 million) and ABL (Rs500 million).
The NLC is still paying commercial interest on these loans. The exclusive copy of the inquiry report held two lieutenant generals Afzal Muzaffar (15.6.2005 to 17.10.2008), Khalid Munir Khan (15.1.2004 to 14.6.2005), DG NLC Maj-Gen Khalid Tahir Akthar (25.7.2002 to 27.2.2008), DFA Najeebullah (25.10.2002 to 10.4.2007) and chief finance officer Saeedur Rehman (25.10.2002 to 10.4.2007) responsible for this faulty investment.
Saeedur Rehman is now working in the Capital Development Authority (CDA) as its chief financial manager while the generals have retired from service.
The inquiry report said total investment cost as on April 10, 2009 is Rs4.1 billion and the present value of investment is Rs2.3 billion, thus Rs1.8billion is the net loss to the NLC.
The report said on September 8, 2003 the then finance minister Shauakt Aziz while presiding over the NLC's board meeting had approved the investment policy of NLC advising it not to invest in stocks and carry over transactions. In the 38th Board meeting held on January 7, 2005, while reviewing the status of the NLC investment, former prime minister Shaukat Aziz pointed out that public sector companies should not trade in the stocks. He further directed that a strategy should be worked out by the NLC in consultation with the secretary finance to disinvest from the stock markets. The DG NLC reiterated that irrespective of the policy, the prime minister's directive to withhold trading in the stock till fresh guidelines from the finance division would be followed in letter and spirit.
Likewise, in the 39th Board meeting held on December 31, 2007, findings and recommendations of the executive committee constituted under the direction of the prime minister were presented to the board. The committee recommendations said that the NLC should avoid investing its surplus funds in the stock exchange and follow the finance division's rules on investment of surplus funds. But these instructions were ignored by these generals.