Terminally ill Pak Steel displays might of corruption in Pakistan

By Kamran Khan in The News, Jan 12
KARACHI: Corruption has been taken to new heights in Pakistan as Prime Minister Yousuf Raza Gilani’s government has allowed key accused persons in corruption cases worth billions of rupees registered by his own government to continue managing the affairs of the collapsing and bankrupt Pakistan Steel.

The business group accused by the government investigators of causing billions of rupees of losses to the national institution has not been blacklisted or even barred from doing business with Pakistan Steel.

Pakistan Steel, a national institution of critical importance, was making profits just two years ago with Rs 11 billion of deposits in the banks. Today, Pakistan Steel is facing closure under debt of about Rs 30 billion and a severe shortage of raw material that has dropped the production capacity to a dangerously low level.

This may be for the first time in the corruption ridden history of Pakistan that not one person nominated in four separate FIRs registered by the Federal Investigation Agency (FIA) in corruption cases worth billions of rupees has been arrested, while business remains as usual for all those identified as partners and collaborators in an official investigation. The government’s tolerance for corruption looks more bizarre in these specific cases because the Pak Steel corruption investigation by the FIA followed a suo moto notice by the Supreme Court of Pakistan that had taken notice of rampant corruption in the organisation and had ordered the FIA to launch a thorough probe. After several weeks of investigation, the FIA had registered four corruption cases under FIRs 36, 37, 38 and 39 of 2009 on December 23 and had nominated former chairman Pakistan Steel Moeen Aftab Sheikh, current Managing Director Pakistan Steel Rasul Bux Phulpoto, former director Commercial Samin Asghar, four directors of Abbas Steel Group, run by influential dealer Riaz Laljee’s family and Rashid Abro who represented Nobel Resources of Singapore and Pacific Chartering and Trading Company as the main accused persons.

According to these FIRs the top Pakistan Steel brass in collusion with some of the key dealer suppliers of the organisation caused an estimated loss of about Rs 5 billion by manipulating purchase of coal without tender; purchase of metallurgical coke at exorbitant rates; award of freight contract for delivery of raw material from foreign countries at exorbitant rates and manipulation of the prices of billet, the most important Pakistan Steel product.

Shockingly, Rasul Bux Phulpoto, a key accused person in the FIR 39/2009, is still running the affairs of Pakistan Steel as its Managing Director while no restrictions have been placed in Pak Steel business dealings with Riaz Laljeeís Abbas Steel Group, whose three directors figured as accused persons in the same FIR. Similarly, there is still no bar on Pak Steel relationship with Noble Resources and Pacific Chartering and Trading Company whose representative in Pakistan Rashid Abroís name appeared in FIRs 36, 37 and 38.

The FIA investigation also made a stunning revelation that Moeen Aftab Sheikh, the former chairman Pakistan Steel, another principal accused in these four corruption cases, formerly served with the Abbas Steel Group of Riaz Laljee, an important alleged beneficiary of the scam. Informed official sources said it was the involvement of this group in Pakistan Steel cases that had resulted in the surprise transfer of Tariq Khosa as Director General FIA last month.

Mr Khosa, an officer of impeccable integrity, was transferred on a Sunday last month following his reservations on Ministry of Interiorís decision to neutralize the focus of probe by changing the terms of reference of the FIA investigation. It is still not clear what prompted FIAís slackness in making efforts for the arrest of accused persons in Pakistan Steel case. The delay allowed many of the accused persons to comfortably seek bail before arrests from relevant court while a few of the accused persons including an important director of Abbas Steel Group left the country with an unprecedented official protocol at Islamabad airport last month. www.thenews.com.pk/top_story_detail.asp?Id=26614