Pakistan’s powerful Sharif family, already facing trial in an accountability court on money laundering and disproportionate assets charges, has become embroiled in yet another scandal involving billions of dollars.
Punjab province is the focus of a story in which Shahbaz Sharif, as Chief Minister, has been running a parallel municipality into which funds have disappeared.
Shahbaz – inspired by the Turkish model of governance – set up six public sector companies to provide civic amenities some nine years ago. By 2016, that number had increased to 63, with capital costs running to US$ 1.5 billion and operating expenses around US$2.5 billion. These public sector companies, established with huge amounts of public funds, have been costly to the exchequer without producing measurable improvements in governance, or to the quality of services and amenities provided.
With pressure mounting on the government over the experiment’s failure, Punjab’s Finance Minister, Dr Ayesha Ghous Pasha, hurriedly called a press conference in Lahore at the end of last month to explain that the provincial government had decided to shut down 10 out of the 63 companies. The remaining 53 concerns, she said, would be scrutinized to detect any financial irregularities.
Ghous had no answer as to why the government had previously failed to conduct annual audits of all the companies. Only 17 companies, she admitted, had been audited. Moreover their audited accounts have not been made public.
“The procedure requires of the public limited company to share its financial affairs with the ministry of finance and the Security & Exchange Commission of Pakistan, which in this case was not fulfilled”
Earlier last month multiple petitions were filed in Lahore High Court against alleged irregularities and financial bungling in the administration of Punjab’s public sector companies. Among other infractions, they question why two Turkish companies – namely Al-Bayraq and Azbaq – were awarded contracts by the provincial government in violation of established procedures and rules. The Turkish consultants were also inducted into various companies on fat salaries, with generous perks.
The picture gets even murkier in light of allegations that the Punjab government appointed a number of serving bureaucrats as heads of these companies and that they drew dual salaries: one from their parent department and another from the companies’ accounts. The seriousness of the maladministration and mismanagement now being uncovered is illustrated by the fact that financial records from at least 38 companies have gone missing.
It is known that Shahbaz’s government appointed 12 sitting members of Punjab’s provincial assembly on the Boards of Directors of the Lahore Transport Company, the Lahore Parking Company, the Punjab Saaf Pani Company, the Lahore Waste Management Company and the Punjab Agriculture and Meat Company. Large funds were placed at their disposal to undertake regular foreign trips and travel in costly bulletproof vehicles.
A source in the Punjab revenue department told Asia Times that the audits of the 17 companies so far assessed have alone unearthed irregularities worth US$761 million. He asserted that the Punjab finance ministry had not been in the loop with regard to these companies’ affairs or running expenses. “The procedure requires of the public limited company to share its financial affairs with the ministry of finance and the Security & Exchange Commission of Pakistan, which in this case was not fulfilled,” he said. The ministry had not bothered to ask for annual audit reports, he added.