LAHORE: A shocking inquiry of the Auditor General Pakistan (AGP) revealed that an amount of Rs53.28 billion was granted as loans to six companies on a very low mark-up rate during the tenure of former chief minister Shehbaz Sharif.
The AGP’s audit report pointed out that the government obtained hefty amount of loans on high mark-up rates from the national and international banks which later on were provided to the companies in terms of loans on much lower mark-up rate.
The process of creating these companies and lending them loans became suspicious in the AGP report. Moreover, it has been evaluated that the performance of these companies did not improve even after borrowing the loans from the government.
The complete report, a copy of which is available with The Express Tribune, disclosed the details of loans taken in billions by the previous government. The AGP also raised questions in a report submitted to the Punjab Assembly.
The audit report depicted that six companies were given more than Rs53.28 billion as loan collectively. However, the companies could not provide documents to validate these loans. The report also revealed that a loan of Rs29.93 billion was given to the Lahore Waste Management Company (LWMC) via Turkish companies. Moreover, in 2016-17, the LWMC acquired an additional loan of Rs310 million.
In the same period of 2016-2017, the Punjab Livestock and Dairy Development department was granted Rs7.65 billion whereas the Rawalpindi Waste Management Company was provided with a loan of over Rs5.93 billion, Punjab Industrial Estate Development and Management Company received Rs6.46 billion. Similarly, the Punjab Mineral Company was granted a loan of Rs1.63 billion.
The Punjab Land Development Company (PLDC) involved in the infamous Ashiana case was benefitted with Rs840 million. Sialkot Waste Management Company received a loan of Rs500 million.
The AGP’s report also indicated that no relevant documents were provided for the audit of loan given to the companies, including balance sheet, profit and loss report and others.
Surprisingly, the loan shuttled between the government and the companies. The contract documents approved by the law department were also not provided to the AGP. All these, commercial companies were given loans on low or soft-term interests while the Punjab government itself borrowed loan from foreign and national banks at exorbitant rates.
The grace period of loans was increased several times to provide maximum benefit to the companies. AGP has declared that the establishment and lending of loans to these companies turned dubious as there was no need to establish new firms in the presence of departments working at the provincial and the district government level.
The finance department informed the AGP that the department concerned has the authority to lend loans according to as per laws prescribed. However, the AGP suggested conducting a comprehensive audit of such a huge amount of loans.
The National Accountability Bureau (NAB) is also investigating the scam of billions that surfaced in these companies. Former chief minister Shehbaz Sharif and son Hamza Shehbaz have been summoned in this regard. The former CM was also arrested in the Ashiana case. More than six officers were also arrested during the investigations.
Published in The Express Tribune, January 1st, 2020.