ISLAMABAD: Prime Minister Nawaz Sharif referred on Monday a scam involving ‘misappropriation’ of Rs1.27 billion in an export promotion organisation, a subsidiary of the commerce ministry, to the Federal Investigation Agency to collect evidence and initiate criminal proceedings against officials, exporters and companies allegedly involved in it.
He also accepted recommendations of the commerce ministry and cancelled the contract of chief executive of the Trade Development Authority of Pakistan (TDAP), Abid Javed Akbar Ali, for his involvement in the scam.
According to an official statement, the prime minister ordered disciplinary proceedings against the officials responsible, including former TDAP secretary Abdul Kabir Kazi, a DMG officer currently working as joint secretary (administration) in the commerce ministry.
Disciplinary action has also been ordered against TDAP director general (facilitation) Abdul Karim Daudpota, an officer of the commerce and trade group, also involved in the scam.
The prime minister ordered special audit of last two years’ accounts of the organisation.
The orders have been issued on an inquiry report prepared by the commerce ministry. It was submitted to the Prime Minister Secretariat last week.
According to the report, senior officials of the TDAP withdrew Rs767.67 million on April 5, which was disbursed in single day. It said 96 cheques had been issued for the payment of subsidies in back dates by the officials in an attempt to evade the April 8 order of the commerce ministry asking the TDAP to stop further payments for the time being.
DG facilitation Daudpota had initiated the cases, secretary Kazi referred these to chief executive Abid, who gave approval the same day. Of the Rs767.67m disbursed, Rs694m (90 per cent) went to 32 companies under three incentive schemes — opening retail outlets abroad, exporters’ offices abroad and freight subsidy for live seafood.
According to the inquiry report, some of the payments were second or third instalments of the claims for which earlier instalments were paid in 2011 and 2012 by the TDAP.
The finance division had released Rs1 billion in 2011 and Rs2bn in 2012 for the three schemes. Of the 32 companies, 25 have been found to be fraudulent. They were paid Rs594m in April this year, Rs140m in 2012 and Rs147m in 2011.
In another scheme for setting up warehouses abroad, an amount of Rs28m has been paid fraudulently.
The incentive schemes were announced in the first three-year strategic trade policy framework (STPF-2009-2012) by the previous government. The policy carried a string of proposals for providing subsidies in cash to exporters for promotion of trade and exports.
This is the second biggest scandal after the multi-billion-rupee National Insurance Company Limited scam, another subsidiary of the commerce ministry. But the ministry did not initiate internal investigation into the NICL scam.
According to the inquiry report on the TDAP scam, most of the payments were made on conspicuously fabricated documents, violating the criteria laid down in public notices and business procedures.
“The writing and signing of backdated cheques, endorsement of the AGPR on uncrossed cheques and encashment of uncrossed cheques by the bank in favour of beneficiary companies smack of an active collusion between the cheques’ writers, their signatories, AGPR Karachi and officers of the National Bank’s FTC branch in Karachi,” the report said.
A source in the commerce ministry said it had constituted a three-member committee, headed by additional secretary Sajjad Ahmad, to investigate the disbursements made under the three incentive schemes in 2011 and 2012.