Apart from pointing out irregular expenditures and financial losses amounting to Rs 447 million in State Life Insurance Corporation of Pakistan (SLIC), the federal audit authorities have revealed that remuneration to the chairman SLIC increased by 94 percent while that of executive directors was increased by 129 percent in 2009.
The audit report 2010-11, a copy of which is exclusively available with Pakistan Today, reveals that during 2009, remuneration to the chairman SLIC were increased by 94 percent from Rs 2.367 million in 2008 to Rs 4.587 million in 2009 while remuneration of executive directors was increased by 129 percent from Rs 3.577 million in 2008 to Rs 8.203 million in 2009. “Such substantial increase in remuneration of the chairman and the executive directors needs justification,” says the report.
UNAUTHORISED BONUSES: In another case, federal audit authorities have revealed that SLIC made unauthorised payment of a bonus worth Rs 197.371 million to officers and staff. “In State Life Insurance Corporation of Pakistan (SLIC), payment of Rs 197.371 million was made as bonus to the officers and staff during the year 2009 without obtaining administrative approval of the ministry and concurrence of Finance Division which was in contravention of the government policy,” says the report.
FAKE RENTAL INCOME: The audit has also pointed out that SLIC suffered loss of rental income amounting to Rs 178.357 million because of non- utilization of a property for commercial purpose by using it for residential purpose. “During the period from 1980 to 2008, SLIC utilized a building owned by its subsidiary Abdullah Haroon Road Property (Pvt) Limited (AHRPL) to provide residential accommodation to its senior executives and their personal staff at nominal rates,” the report reveals.
The report adds: “The plan before the purchase of building envisaged commercial use of the premises and it was in commercial use before the purchase. Later, the management itself worked out a monthly rent of the premises in 2000 as Rs 600,000 per month. However, it was used as residential accommodation for SLIC’s employees and that too at nominal rates helped earn Rs 9.568 million only in about 26 years. The audit observed that the use of a commercial building for private residence of SLIC employees denied the organization a rental income of Rs 178.357 million which has been assumed at Rs 100,000 per month in 1980 with an annual increase of 10 precent as permissible under Sindh Rental Ordinance 1979.”
IRREGULARITY IN PURCHASE OF SHARES: The audit report also points out irregular purchase of shares of an unlisted company at a price greater than the value inflicting loss of Rs 18.300 million to SLIC. “In SLIC, the management spent a sum of Rs 23.300 million in 1979 from the Life Fund to purchase 500,000 shares (100 percent equity) of a private limited company named Mayfair Properties Ltd which was owned by M/s Hashwani Sales and Services Ltd and was a company unlisted on stock exchange. Moreover, above shares were purchased at a very high price of Rs 46.60 per share against its value of Rs 10 per share. Hence, expenditure of Rs 23.300 million was incurred in July 1979 to purchase shares of a company which were entirely acquired by M/s Hashwani Sales and Service Ltd for consideration of only Rs 5 million in 1977 (ie two years ago),” the report says.
MISALLOCATIONS: In another case, audit has pointed out that SLIC spent irregular expenditure amounting to Rs 16.435 million from Life Fund on maintenance of property owned by subsidiary company. “During the period from 1982 to 2008, SLIC spent an amount of Rs 16.435 million out of its Life Fund on the maintenance and other related works of a building owned by its subsidiary M/s Abdullah Haroon Road Property (Pvt.) Limited. The subsidiary had no business of its own and existed without even having a bank account,” the report reveals.
The audit officials have also pointed out that SLIC made extra expenditure of Rs 15.202 million due to ignoring first lower bidder. The report further points out that SLIC management was callous in recovering of decreed amount of Rs 23.291 million from an ex-tenant.