CCP top brass caught napping while cartels kept fleecing public for billions of rupees
Once an institution working to protect and preserve the rights of consumers and public at large against cartelization of big companies and businessmen, top bosses of the Competition Commission of Pakistan have been revealed as incompetent and inept in the audit report of the auditor general of Pakistan (AGP) for the year 2014-15.
The report, yet to be presented before both houses of the parliament, reveals how people at the helm failed to recover billions of rupees from companies fined by the commission itself, who made hefty payments to their kin and blue-eyed persons in blatant violation of the prescribed rules and regulations with absolutely no check on the pilferage of money.
The audit report, a copy of which is available with Pakistan Today, is an indictment of the PML-N government which abdicated its responsibility while private cartels kept fleecing the general public. Even if CCP took any action and imposed some penalties, the amount was not recovered and the profiteers were left free to rob and plunder the consumers raising questions about whether the CCP top brass was in bed with the cartels or merely incompetent and apathetic to public and national interests.
The 2014-15 audit report brings to the light tales of incompetence of the CCP officials which caused heavy losses to the national exchequer.
NON-RECOVERY OF PENALTIES, FINES BY CCP CAUSES LOSS OF RS 26.3 BILLION
The CCP imposed penalties amounting to Rs 26,345.037 million on various companies during five-year period from 2009 to 2014. However, only Rs 23.450 million were recovered.
Section 40(8) of the Competition Act 2010 states that all penalties and fines recovered shall be credited to the public accounts of the federation.
The report, however, said that the penalties imposed by the Commission were not fully recovered which had deprived government of funds.
The CCP management, however, replied that the Commission had passed orders for violations of the Competition Act 2010 and imposed fines. However, the undertakings against whom the enforcement orders had been issued had the right of appeal and that the orders of the CCP were suspended where the writ petitions/appeals were pending before the High Courts, the Competition Tribunal or the Supreme Court of Pakistan. The CCP was pursuing the cases but none had been finalised as yet.
Notwithstanding the CCP’s response, the amount recovered which represented only 0.09 per cent of the total penalties imposed, showed that the Commission’s performance was far below the required level, even as the chairman, members and employees of the Commission kept drawing huge salaries, perks and privileges.
The Departmental Accounts Committee (DAC) had not convened till the finalisation of this report, even though the principal accounting officer (PAO) was informed on December 15, 2014
The audit has recommended that rigorous efforts should be made for recovery of the outstanding amount in order to justify the heavy expenditure being incurred by the government on the competition commission.
NON-RECOVERY OF 3% CHARGES ON FEES, CHARGES LEVIED BY REGULATORY AGENCIES – RS 2028.264 MILLION
Section 20(2)(f) of the Competition Act 2010 calls for a fund for CCP that would be replenished through a percentage of the fees and the charges levied by other regulatory agencies in Pakistan which include the Securities and Exchange Commission of Pakistan, NEPRA, OGRA, PTA and PEMRA.
Rule 5(2) of the Competition Commission (collection of fees and charges) Rules, 2009 calls for a similar percentage which would take effect from the financial year 2008-09. Under the Competition Act, Finance Division prescribed a charge of three per cent on the regulatory authorities mentioned above to meet the charges in connection with the functions of the commission.
However, in violation of law, and its own rules, the CCP did not receive the three per cent on the fees and charges levied by other regulatory authorities.
The audit observed that an amount of Rs 2,028.264 million in fees and charges was outstanding against other regulatory authorities, which was required to be received by the Commission under section 20(2)(f) of the Competition Act, 2010.
The report said that non-recovery of the three per cent fees and charges levied by other regulatory authorities had shifted the financial burden of the Competition Commission on the federal government.
The CCP management, however, replied that it had consistently followed up the matter of payment of three per cent with all the regulatory bodies. They had also contacted Ministry of Law which said that the regulatory bodies were under an obligation to make the payments. The Commission admitted that the refusal by the regulatory bodies to make the payments had resulted in loss to the CCP in meeting its operational expenses and had also undermined its autonomy.
The audit has recommended that amounts outstanding against the regulatory bodies should be recovered and a mechanism devised to ensure timely recovery so as to decrease unnecessary financial burden on the federal government.
IRREGULARITY IN APPOINTMENT OF CCP SECRETARY – RS 36.667 MILLION
The management of CCP appointed Muhammad Hayat Jasra as secretary in grade-9, equivalent to BPS-21 on November 12, 2007 at the age of 68 years. Jasra was paid Rs 36.667 million in terms of pay and allowances and gratuity to the ex-secretary of the Commission.
Audit observed that while Jasra had been appointed at a fixed salary of Rs 150,000 per month, the position of secretary was not even included in the positions laid down in the Service Regulations Manuel, 2007. The appointment was made without open competition and in absence of recruitment rules. The report further says that the terms and conditions of appointment were revised on August 6, 2008 and Basic Pay Allowance of Grade 9 of the Commission (equivalent to BPS-21) was approved w.e.f. November, 12,.2007 – the date of appointment, and arrears of Rs 1.240 million were also paid. Jasra was also paid gratuity of Rs 4.620 million he was not entitled to such payment, being a contract employee and also being beyond retirement age of 60 years.
The audit report observed that the appointment of officer beyond the retirement age of 60 years in absence of approved post of secretary, recruitment rules and without open competition was irregular and unauthorised.
The management replied that Jasra was reemployed after retirement and that age limit is applicable to regular employees only.
The report has recommended fixing responsibility and recovering entire payment for making appointment against non-existent post and in violation of rules.
NEPOTISM, UNAUTHORISED PAYMENTS:
The management of the CCP made appointments of six people in the year 2013-14 during a period of ban and without advertising the posts and open competition. Almost all officers were close relatives of the high ranking officers.
Sehr Hussain was appointed deputy director on October 8, 2013. Syed Shoukat Gilani, Joelat Ater and Sara Hayat were posted as Junior Executive Officers on March 1, 2014, October 10, 2013; and June 2, 2014 respectively. Boota Masih was posted as Photocopier operator on February 13, 2014 and Muhamad Abid as driver on February 21, 2014.
The CCP management also made advance payments amounting to Rs 4.212 million to its chairperson and members appointed against the package of MP-I scales.
CCP Chairperson Rahat Kaunain Hassan was paid advance allowance of Rs 250,000 as house rent; Dr Joseph Wilson was given Rs 710,000; Shehzad Ansar was paid Rs 1,948,288 (including a general purpose loan of Rs1.8 million) while Mueen Baltay was given Rs 13,03212 (including general purpose loan of Rs 7,19161).
The report termed these actions as irregular and unauthorised and recommended to fix responsibility and recover the money.
NAB STARTS PROBE INTO CCP AFFAIRS
Meanwhile, the National Accountability Bureau (NAB) has launched a probe into the corrupt practices in the CCP.
NAB spokesman told Pakistan Today that NAB had already launched an investigation into the allegations mentioned in the report.
“Investigation has been authorised against Member and former acting chairman CCP Dr Joseph Wilson. He is accused of making illegal appointments in the organisation by violating its service rules. He also faces the allegation of receiving kickbacks and bribe from suppliers, contractors and consultants,” he added.
