ISLAMABAD: Terming Hascol Petroleum Limited fiasco as "fraud", the Senate Standing Committee on Finance on Tuesday directed authorities to conduct forensic audits and initiate criminal proceedings against those responsible for the losses of Rs116 billion.
The committee met under the chair of Senator Muhammad Talha Mahmood here at the Parliament House.
According to the minutes of the meeting, the committee received a comprehensive briefing from the State Bank of Pakistan (SBP) and the Security and Exchange commission of Pakistan (SECP) on the financial reporting issue of Hascol Petrol.
The committee was informed that in 2019, the company’s liabilities increased from Rs24 billion to Rs44 billion as compared to 2018. The company was constantly investing in its new projects. Hascol went into massive losses from profits in a few months. A company which was operating with a profit of 956 million suddenly went to an enormous loss of Rs.116 billion, an official of SECP apprised the committee.
The SECP officials told the committee that the SECP had issued its instructions to the company. Two investigations were underway against Hascol, which would be completed in three months. The criminal or civil proceedings against the company will be done under the SECP Act.
Senator Saleem Mandviwalla said apparently the fraud had been planned for years, and a forensic audit should be conducted.
Senator Kamil Ali Agha said such fraud was not possible if the auditing companies fulfilled their responsibilities in a true sense.
Senator Musaddiq Masood Malik asked why the SECP did not take action as the company had taken illegal steps on such a large scale. The standing committee directed authorities to conduct a forensic audit of the company.
Chairman Committee, Senator Muhammad Talha Mahmood, in consultation with the Senators, gave suggestions regarding forensic audit of the company, auditors, penalties, and steps to be taken to empower the company.
The issue of charges on transactions of funds by banks was also discussed in the meeting.
Senator Saleem Mandviwalla said the proposal to transfer money from banks was rejected in the budget, while charges were levied on transactions above Rs25,000. Deputy Governor State Bank underlined that charges of 0.1 percent or Rs200 were levied on transactions above Rs25,000 or whichever was less. He added that 82 percent of the transactions took place in July without any charges, while only 18 percent of the people were charged.
Chairman Committee Senator Muhammad Talha Mahmood objected to the levied charges and recommended that either the limit of this amount should be increased to Rs50,000 or it be abolished at once. These charges were not justified, Mahmood added.
The committee chairman with the consent of the members rejected the charges on the transaction and directed the SBP to submit a report to the committee within a month. Chairman also said if the instructions of the committee were not followed, the problems might increase.
Mahmood sought the statements of 18 banks from the SBP in three weeks. He also demanded for the list of those officials who have given guarantees to these banks.
The issue of the bank account of politically-exposed persons was also raised with SBP in the standing committee.
Senator Musaddiq Masood Malik asked the SBP to submit a report regarding those who were allegedly involved in money laundering and terror financing. Malik stressed the committee should know how many bureaucrats, politicians, and other entities were involved in it.
Senator Kamil Ali Agha said this issue had been going on for many years and was a source of humiliation for all of us.
Senator Talha Mahmood gave the SBP officials one month’s time to resolve the issue.
The committee members said for politicians opening a bank account had become a daunting task as far as time and the security questions were concerned. To this, Deputy Governor SBP said not only politicians, but officers above grade 20 were also on the list. The standing committee also sought details of cases against politically-exposed persons.
The meeting also reviewed the issue of hacking of Federal Board of Revenue (FBR) data. The chairman of the committee sought a reply from the FBR within three days regarding the data hacking. The committee also directed the Senate Secretariat to write a letter to the Chairman FBR in this regard.
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