The Public Accounts Committee (PAC) of the National Assembly on Wednesday directed the Commerce secretary to submit an inquiry report within a month against the officials of National Insurance Company Limited (NICL) who were involved in irregular procurement of land worth Rs 1.065 billion in violation of the PPRA rules.
The PAC, which met at the Parliament House with Leader of the Opposition Syed Khursheed Shah in the chair, unanimously observed that prima facie the whole department seemed to be involved in purchase of land and buildings on high rates.
The committee discussed the special audit report of NICL for 2008 to 2010.
The director general audit informed the PAC that the NICL board of directors in its 159th meeting held on July 1, 2009, approved the purchase of land located on Airport Road, Lahore.
On July 9, 2009, he said, the NICL entered into a contract with Mohsin Habib Warraich to procure 20 kanal and 2 marla land for the construction of its building and a hotel in Lahore for Rs 1.065 billion at the rate of Rs 53 million per kanal.
Advance payment of Rs 250 million was made to Mohsin on July 8, 2009, he added.
The DG audit said that three companies had submitted bids for procurement of land in response to newspaper advertisements and Mohsin Habib Warriach was not among them.
Mohsin was not the owner of the said property when tenders were invited on April 13, 2009; he purchased it from its various owners, the audit report said.
In July 2009, NESPAK was assigned to carry out valuation of the said property. NESPAK, in its report submitted in January 2011, noted that the NICL had paid Rs 502.885 million extra to Mohsin as the latter had purchased it from different owners at the rate of Rs 1 million per kanal, which came to Rs 20.100 million for the entire 20 kanal and
2 marlas of land.
Thus the NICL faced a loss of Rs 502.885 million due to mala fide intentions of its chairman Muhamamd Ayyaz Niazi in addition to Javed syed, Syed Hur Riahi Gardezi and Syed Naveed Hassan Zaidi and other senior officials, the DG audit observed.
Secretary Commerce Muhammad Shehzad Arbab then told the PAC that Rs 80.400 million had been recovered while Rs 422 million was still recoverable from the accused Mohsin Habib.
He said that the NICL had attached 803 kanal land of the accused which had estimated value of Rs 1.6 billion.
He said that 18 officials were involved in the scam and the services of eight of them, including executive director Muhammad Zahoor and member real estate Zahid Hussain were terminated while former general managers Athar Naqvi and Ijaz Sheikh had died.
The other 10 officials had been issued a warning by the department, he added.
MNA Mehmood Khan Achakzai remarked that the department purchased the land worth millions of rupees in two to ten days while it could not complete the inquiry even after the passage of six years.
The financial advisor of the ministry told the committee that the National Accountability Bureau (NAB) had acquitted a few officials, even though the department had declared them guilty.
To this the NAB representative informed the committee that they were acquitted after the recovery of the amount.
The PAC Chairman, however, directed the NAB to submit a report in next meeting as to how some of the officials had been exonerated.
Discussing a para pertaining to the purchase of property in violation of the rules of Public Procurement Regulatory Authority (PPRA) at high rates amounting to Rs 487 million at Korangi Township Karachi, the PAC directed the Secretary to hold a fresh inquiry and take action against the responsible within two months.
The PAC was also told by the audit officials that the NICL made illegal payments of $20,587,301 for purchase of property in Liberty House Dubai International Finance Centre (DFIC) and violated the provisions of Foreign Exchange Act 1947.
Syed Khursheed Shah ordered the commerce secretary to re-evaluate the land and inform the committee within three months.
It should also be assessed that what benefit the department would get if it were to be rented out, he added.