KARACHI: The sale of majority shareholding of K-Electric to Shanghai Electric Power has been opposed by the Federal Investigation Agency (FIA).
FIA investigation revealed K-Electric owed outstanding dues of Rs78 billion to the federal government and owed dues amounting in billions to Sui Southern Gas Company (SSGC) in terms of bills and late payment surcharges from previous twelve years, reported Express Tribune.
FIA has asked the authorities to not let the sale of K-Electric go ahead till the company clears all outstanding dues to the government and SSGC.
The Corporate Crime Circle of the FIA started a probe into alleged wrongdoing regarding provision of gas from SSGC upon receiving an application against K-Electric in 2014.
Following privatization of K-Electric in 2015, both companies were unable to enter into a gas supply agreement with SSGC.
As per the regulations, SSGC cannot provide gas supply without signing of a proper GSA.
But flouting its own regulations, SSGC has been providing gas supply to K-Electric’s grid situated at Bin Qasim.
According to FIA’s application, SSGC bill amounts and K-Electric figures provided in their annual financial reports didn’t tally and greatly differed.
It provided an example of financial year 2011-12 and 2012-13 in K-Electrics annual report showed gas purchase of Rs56 billion from SSGC compared to SSGC’s figures of Rs9 billion worth of gas supplied to the power company in its annual financial statements.
Leaving aside these accusations, FIA’s investigation revealed K-Electric is defaulter of SSGC and owes around Rs78 billion to the company.
The probe from FIA also revealed SSGC senior officials admitted no gas supply agreement had been signed between K-Electric and the SSGC.
And the previous agreement in this regard is said to have been signed forty years ago for supply of 10 million cubic feet of gas.
K-Electric’s financial report also clearly stated that it isn’t bound to make any interest payment to SSGC on the dues owed to SSGC.
A written letter from FIA clearly highlights that both SSGC and K-Electric are profitable entities in which the federal government holds a share.
And FIA recommended the constitution of a high-level committee which should include its officials to ensure clearance of outstanding dues owed by K-Electric to SSGC before its sale to Shanghai Electric Power is concluded.
