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April 5, 2021

Multi-million dollar scam: Ex-MD PLL Adnan Gilani, CFO Nadeem Nazir found guilty

ISLAMABAD: The multi-million dollars scam on excess payments to LNG suppliers has been put on way to its logical end as former managing director of Pakistan LNG Limited (PLL) Adnan Gilani and its Chief Financial Officer (CFO) Nadeem Nazir, currently made OSDs (official on special duty), have been declared guilty and held responsible for excess payments amounting to US$27.526 million in the head of port charges.

Both the top officials of PLL that deals with import of LNG, have also been declared guilty of gross willful negligence and failure to protect the interests of the 100 percent government-owned company. So much so, Adnan Gilani and Nadeem Nazir have also been found guilty of giving preferential treatment to Singapore based Gunvor and Italian company ENI viz-a-viz other LNG suppliers. The relevant investigation agencies such as NAB and FIA have been recommended to initiate proceedings to ensure the appropriate action against both the officials.

This all unfolded in the 31-page inquiry report of a four-member committee headed by Sr Joint Secretary Sajid Mehmood Qazi, notified by the Ministry of Energy (Petroleum Division) on January 15, 2021 on the request of Pakistan LNG Company. The report has been deposited with the Board of Directors (BoDs) of Pakistan LNG Limited for action against the ex-managing director Adnan Gilani and chief financial officer Nadeem Nazir.

The Sajid Mehmood Qazi report also provides a startling disclosure about Adnan Gilani, saying that Gilani is also the President of a virtual currency American Company, namely BitLeague dealing with Bitcoin when he was the Managing Director of Pakistan LNG Limited and, to this effect, the Ministry of Energy (Petroleum Division), in June 2019 requested the BODs of PLL to probe Gilani’s dual charge. However, Gilani resigned from his position as MD/CEO PLL on August 16, 2019, which was accepted during the 56th meeting of the PLL’s BoDs held on 22nd to 23rd August.

The inquiry report says a total amount of US$27.526 million was overpaid to LNG suppliers. Of this, over US$22.3834 million was paid to GUNVOR and ENI, which is the 80 percent of total excess payments. The story does not end here as main LNG suppliers that include GUNVOR and ENI were also given preferential treatment versus other suppliers in the treatment of port charges. So much so, both the top officials (MD and CFO) who first came to know in October 2018 about the fact that PLL was making excess payments to LNG suppliers kept the Board of Directors (BoDs) in the dark until August 2020.

In another development, NAB has also swung into action and sought the Sajid Mehood Qazi inquiry report on excess payment made to the LNG suppliers by Adnan Gilani and Nadeem Nazir.

NAB wrote a letter on March 24, 2021 to the Petroleum Division seeking the certified true copy of the inquiry report under Section 19 of National Accountability Ordinance. According to the copy of NAB letter, Adnan Gilani is already under investigation by NAB regarding the illegal appointments of favorite persons in public limited companies of Islamabad and provision of funds of billions of rupees in violation of relevant rules. The name of Adnan Gilani is already on the exit control list (ECL) and NAB after getting a report from the Petroleum Division is also likely to put the name of CFO Nadeem Nazir on ECL.

The Sajid Qazi report in its findings said that the top management of Pakistan LNG Limited was fully aware by October 2018 that excess amounts were being paid to LNG suppliers under the contract category of Port Charges. And there was sufficient internal clarity from PLL’s legal department for the top management to take action and to stop these overpayments.

The report also finds that the-then MD PLL Adnan Gilani and CFO PLL Nadeem Nazir did not take action to stop the overpayments but engaged in unnecessary and extensive back and forth communication with the Port Qasim Authority and LNG suppliers in connection with this matter.

The Inquiry Committee believes that the MD and CFO overstepped their powers (i.e. they did not seek the Board’s approval) in recommending continued over-payment to all suppliers.

Since the stoppage of over-payment in October 2020, PLL has recovered USD1,761,368 from various LNG suppliers. An additional amount of USD4,385,145 has been saved (for cargoes delivered between October 2020 and January 2021) by PLL’s new management by taking the correct stance to make payments strictly as per the contract. No over-payment has been made to any supplier except one i.e. ENI (a term supplier also participating in spot tenders) that was done upon the recommendation of the Board of Directors of PLL. Subsequently, upon the management’s request to reconsider the approach with ENI, the board conceded and no over-payments were subsequently made to any supplier.