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NLC major victim of 2005 stock market crash, PAC told - LahoreEstate - 02-18-2009 08:57 AM
* Organisation fears half of its Rs 4.3 billion investment wiped out in crash
* Committee demands inquiry report into matter by April 15
By Muhammad Bilal
ISLAMABAD: The National Logistics Cell (NLC) on Tuesday emerged as yet another victim of the 2005 stock market crash when the Public Accounts Committee (PAC) was informed that the NLC had invested around Rs 4.3 billion in the market. The PAC found out that the cell now feared losses of more than Rs 2 billion.
The committee, which met under the chairmanship of Nisar Ali Khan, observed that the previous regime had created an 'artificial boom' in the stock market by investing huge amounts of public money, adding the NLC was an appropriate case to expose the financial mismanagement of past rulers.
NLC Director General Imtiaz Ahmed informed the PAC that an inquiry had already been initiated into the Rs 4.3 billion investment.
Fears: He told the committee that according to rough estimates, more than 50 percent of the investment had been wiped out in the market crash.
The committee members expressed more surprise on learning that the amount invested was predominantly borrowed.
Ahmed said the cell had hired services of a professional consultant to ascertain the exact amount of losses suffered by the NLC and the inquiry report would be ready soon.
Report: The PAC allowed two months to the NLC to come up with exact figures of its investment, its losses and present value of its investment in the stock exchange.
The NLC management has been directed to submit details by April 15 about the authority that took the investment decision in violation of rules and regulations.
Pakistan Muslim League-Nawaz (PML-N) leader Khawaja Asif said stern action should be taken against those responsible.
He said former prime minister Shaukat Aziz had 'fooled' then president Pervez Musharraf by investing public money in the stock market to show its improved performance.
The committee was earlier informed that the NLC appointed Saeedur Rehman as chief financial officer (CFO) in June 2004 on a salary of Rs 150, 000 per month, which was in violation of prescribed rules, on the directions of the then prime minister.
PAC member Ayaz Sadiq said most of the NLC investments were made during Rehman's stint as CFO and he should be specifically investigated during the inquiry.
The PAC also expressed its displeasure over the financial management of the Ministry of Planning and Development.
PAC Chairman Nisar Ali Khan said the committee was considering several recommendations, including framing rules to transfer the ministries’ federal secretaries if they failed to conduct monthly meetings of the departmental accounts’ committees.
http://www.dailytimes.com.pk/default.asp?page=2009\02\18\story_18-2-2009_pg7_27