Committee uncovers Rs1.35b scam at ATH
ABBOTTABAD:
An inquiry committee constituted by the Board of Governors (BoGs) of Ayub Medical Teaching Institute (AMTI) has uncovered widespread financial mismanagement and irregularities to the tune of Rs1.355 billion at Ayub Teaching Hospital (ATH), recommending the termination of five senior officials including a former hospital director from their service and recovering Rs 208.8 million from responsible officials.
The inquiry, initiated in response to allegations of systemic fraud and misuse of authority, also unearthed severe violations of procurement laws, collusion among officials, and substantial losses to the public exchequer.
It also uncovered procurement violations, including fake bids and forged documents, misuse of authority by senior officials, overpayments for surgical items and medicines during the interim government period, and misuse of authority during the 2023-24 fiscal year.
When contacted, BoG Secretary Professor Hamid Khan confirmed that long-awaited inquiry findings have been received, which will be discussed and followed in the next BoG meeting for further process and implementation.
The committee headed by Prof Dr Haq Nawaz comprises pharmacist Sona Khan, senior lawyer and former BoG member Asad Khan Jadoon Advocate and financial expert Umer Abbasi finalised the report after a meticulous investigation, categorised involved officials into three groups based on their roles and recommended stringent administrative and legal actions, including terminations, recoveries, and criminal probes.
The probe report urges the BoG to act swiftly on recommendations, recover losses, and initiate criminal probes to restore public trust. It warns that failure to address these systemic issues could lead to recurring institutional decay.
The inquiry paints a grim picture of institutional malpractice at ATH, demanding accountability for those implicated and systemic reforms to prevent future abuses. The BoG faces mounting pressure to implement the committee's roadmap for transparency and discipline.
Key findings of the inquiry include procurement violations, inflated pricing, misuse of authority, unjustified reappropriation and financial mismanagement. They pointed out that PPRA Rules 2014 were breached by giving favours to companies on forged documents without having NTN and bank statements while manipulating technical evaluations and awarding contracts to ineligible firms.
Similarly, the inquiry report stated that pharmacy supplies and IT equipment were purchased at rates exceeding market prices due to the absence of mandatory market surveys.
It further stated that Rs930m worth of purchases were illegally approved during a government-imposed ban, bypassing BoG authorisation.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
13 hours ago
- Business Recorder
Illicit trade, smuggling: MoC says it doesn't maintain any related data
ISLAMABAD: The Ministry of Commerce (MoC) said on Thursday that it has no role in dealing with illicit (informal) trade and smuggling, nor does it maintain any related data, suggesting a 'Whole-of-Government' approach to address the issue comprehensively. This proposal was put forward by Additional Secretary (Trade Policy), Salman Mufti, during a meeting of the Sub-Committee of the Senate Standing Committee on Commerce, chaired by Senator Sarmad Ali. Senators Faisal Saleem Rahman and Zeeshan Khan Zada also attended the meeting. The sub-committee convened to assess the validity of claims made by the economic think tank PRIME and, if substantiated, to propose sustainable solutions. Pakistan loses Rs750bn tax revenue to illicit trade, smuggling yearly: report PRIME, which includes retired FBR officials among its members, claimed that illicit trade of five items in Pakistan accounts for 56% of total trade, while formal (legal) trade represents only 44%. According to their estimates, the total value of illegal trade is Rs 750 billion annually, including Rs 300 billion in tobacco, Rs 60–65 billion in pharmaceuticals, Rs 106 billion in tyres and lubricants, Rs 270 billion in petrol/diesel, and Rs 10 billion in tea. PRIME also referenced a claim by a member of the Competition Commission of Pakistan (CCP), a former FBR officer with experience in Customs Intelligence, who estimated the volume of illicit trade at $16 billion annually. These figures, particularly the Rs 300 billion attributed to the tobacco sector, raised concerns among committee members, who questioned their accuracy. The Executive Director of PRIME, however, distanced himself from full responsibility for the data, noting that the figures were sourced from various surveys and United Nations reports. Committee members from Khyber Pakhtunkhwa (KP) argued that survey-based data is often perception-driven and lacks concrete evidence. 'The figures related to the tobacco sector appear exaggerated. If they are accurate, then action must be taken against the officials of the relevant agencies for failing to curb this menace,' said Senator Faisal Saleem Rahman, who also chairs the Senate Standing Committee on Interior. He referred to the ongoing national campaign 'Behtareen Pakistan,' which also cites the Rs 300 billion figure for illegal tobacco trade. He warned that if the figure is proven incorrect, PRIME should retract its report, which has been used by major cigarette manufacturers to justify the campaign. 'As someone from KP — where districts like Swabi, Mardan, and Charsadda are major tobacco-growing areas—it is my responsibility to safeguard the rights of our farmers. As Chairman of the Interior Committee, I must also uphold the integrity of law enforcement agencies,' he added. Senator Zeeshan Khan Zada supported his colleague, recommending that the reported financial loss figures be independently verified. He called for a joint meeting of all stakeholders—both public and private—to hear diverse viewpoints and reach a well-informed conclusion. Senator Sarmad Ali suggested inviting representatives from Pakistan Tobacco Company and Philip Morris to the next meeting, along with local cigarette manufacturers, tobacco growers, FBR officials, and law enforcement agencies, to provide a platform for all stakeholders to present their perspectives. The committee also plans to hold a separate meeting focusing on the pharmaceutical sector to investigate the causes of illicit trade and its impact on national revenue. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business Recorder
CCP imposes Rs375m fines on six major fertilizer makers, FMPAC
ISLAMABAD: In a landmark decision against cartelisation, the Competition Commission of Pakistan (CCP) has imposed fines totaling Rs 375 million on six major fertilizer manufacturers and their trade association, the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), for colluding to fix the retail price of urea across the country. The penalties follow a suo motu inquiry launched by the Commission, which concluded that the manufacturers — in coordination with FMPAC — had jointly issued a public advertisement setting the maximum retail price at Rs 1,768 per 50 kg bag. The CCP found that this was not a routine awareness campaign but a coordinated act of cartelization, violating Section 4 of the Competition Act, 2010. The order was issued by a CCP bench comprising Chairman Dr Kabir Ahmed Sidhu and Member Salman Amin. The six companies fined Rs 50 million each include Engro Fertilizers Limited, Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Fatima Fertilizer Company Limited, Fatima Fertilizer Limited, and Agritech Limited. Their association, the FMPAC, was fined Rs 75 million, bringing the total penalty to Rs 375 million. The Commission's investigation noted that despite significant differences in gas pricing, economies of scale, and input costs, all companies charged the exact same price — a clear indicator of collusion rather than coincidence. The manufacturers attempted to defend their conduct by invoking the 'state action doctrine,' arguing that they acted under a federal government directive to educate farmers about urea prices. However, the CCP bench found no formal instructions compelling the companies to set a uniform price. Instead, the companies misused the government's communication to justify a cartelised price-fixing strategy. The bench observed that actions taken under the pretext of public interest effectively undermined the forces of supply and demand and distorted competitive pricing mechanisms. The Commission expressed concern that despite repeated warnings issued in 2010, 2012, and 2014 — including findings that two companies had engaged in joint advertising to influence market prices — no long-term corrective measures were taken by the companies or FMPAC. The recurrence of such behavior signaled the ineffectiveness of prior warnings and reinforced the need for stronger enforcement and deeper structural reform. While announcing the order, the CCP reiterated that business associations like FMPAC have no legal authority to set or recommend prices. Their involvement in coordinated pricing decisions undermines market competition and consumer welfare. The Commission warned that any such action — particularly from entities that have long benefited from government subsidies — will not be tolerated. The CCP's order also touched upon broader policy concerns. Pakistan's fertilizer sector, once heavily subsidized to promote local production, continues to operate under the outdated Fertilizer Policy of 2001. That policy had extended 20-year gas supply contracts at concessionary rates to fertilizer plants commissioned after 2001. Although these subsidies expired in July 2021, pricing across companies has remained inexplicably aligned. According to a study by the Pakistan Institute of Development Economics (PIDE), the government has been spending approximately Rs 200 billion annually on fertilizer subsidies — yet the intended benefit has largely failed to reach farmers, who continue to face high prices and supply shortages. The Commission stressed that this uniformity in pricing, even after deregulation and subsidy withdrawal under IMF conditions, raises serious concerns about the lack of true market competition. Despite differences in technology, plant age, and gas costs, the six companies maintained identical prices, suggesting that collusion — not competition — drives pricing in the fertilizer sector. Separately, the Islamabad High Court (IHC) has reserved its verdict in a related case concerning the CCP's direction for fertilizer companies to submit cost audit reports. As part of its investigation, the Commission had required these reports to assess pricing behavior. However, the companies challenged the directive in court, claiming that cost audit data was confidential and could not be disclosed. In response, CCP's legal representative argued that all companies are already required to submit cost audits to the Securities and Exchange Commission of Pakistan (SECP), and questioned why the same data could not be provided to another statutory regulator. The court has now reserved judgment after hearing both sides. It is also worth noting that in a separate case involving Dalda Foods, the Supreme Court of Pakistan upheld the CCP's jurisdiction to seek information, monitor market conduct, and conduct investigations—further reinforcing the Commission's legal mandate. Under the Competition Act, any agreement or practice that fixes prices, limits output, or divides markets is prohibited. Violations may lead to fines of up to 10% of annual turnover or Rs 75 million, whichever is higher. Repeat violations can result in criminal prosecution under Section38 of the Act. The CCP has urged the federal government to comprehensively review the Fertilizer Policy 2001, disengage from price coordination through trade bodies, and let market dynamics—not collusive agreements — govern the industry. The Commission reaffirmed its commitment to promoting open markets, safeguarding consumer interests, and holding violators accountable. To report cartel behavior or anti-competitive practices, members of the public can contact the CCP's Market Intelligence Unit at 0304-0875255 or email [email protected]. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business Recorder
Customs refuse to release bus used for smuggling
LAHORE: The customs department has declined to redeem the vehicle being operated and driven by the owner himself for smuggling purposes, said sources. The owner was ready to pay redemption fine equivalent to 20 percent along with personal penalty of Rs 25,000. The information was received by the anti-smuggling organization of collectorate of customs that smuggled goods are concealed in the built-in cavities of a passenger bus. A team was constituted to check the same. The team spotted the bus on the road and stopped it for checking purposes. The driver of the bus, who was also owner of the same, was asked about the presence of non-duty paid goods, which he denied. However, when the staff thoroughly checked the bus they found out built-in secret cavities full of smuggled goods. The customs team brought the bus to the warehouse and executed legal formalities to issue a show-cause notice. When the owner of the bus was confronted with regard to presence of non-duty paid goods, he showed his willingness to pay the duty and taxes. The department ordered to confiscate the smuggled items but declined to redeem the vehicle on payment of fine on the ground that the said vehicle was used in smuggling by the owner himself. The bus owner filed an application for redemption of the vehicle on the plea that he had not denied the presence of smuggled goods in the bus and was ready to pay fine. But the department maintained that in the cases where secret cavities are available in the vehicle and the owner of the vehicle is in full knowledge of those secret cavities besides having the understanding that his vehicle was being used in dealing with smuggled goods, no facility of redemption can be offered. Instead, only in the cases where owner of the vehicle is not in the knowledge of the fact that his vehicle is carrying smuggled goods and being operated and driven by some other person, a relaxation of redeeming the vehicle can be extended. Copyright Business Recorder, 2025
