ISLAMABAD: It is a known fact that public money in Pakistan does not get the due respect. Whether it is in the form of corruption or untargeted subsidies, the taxpayer’s money finds benefitting a select few.
Most recently one such instance of mishandling of public funds was seen in action at the Ministry of Science and Technology. Pakistan Standards and Quality Control Authority (PSQCA), an entity within the ministry, found itself facing scrutiny following an abrupt decision to invest over Rs 7.5 billion in Term Deposit Receipts (TDRs) at a solitary branch of a commercial bank without fulfilling codal formalities. This move raised eyebrows and has triggered internal discord over the rationale behind the hasty decision-making process.
According to documents concerning the matter, a substantial investment in a specific branch of a commercial bank at Karachi was sanctioned after the approval of the Board of Directors (BoD) of the Pakistan Standards and Quality Control Authority (PSQCA), an affiliated body of the Ministry of Science and Technology.Â
It is important to note that the federal government highly regulates the investment of such a huge amount in commercial banks. In this regard the Federal Government has promulgated the Public Finance Management Act, 2019. According to the provisions of this act, public and even autonomous bodies are prohibited from any kind of short- or long-term investment or deposit into bank accounts. Such unspent balances should be part of the consolidated fund. This Act is featured by an overriding effect i.e. any law contradicting this act is superseded.
“No authority shall transfer public money for investment or deposit from government account 1[including the assignment accounts] to other bank account without prior approval from the Federal Government, ” the Act says.
Earlier instances of fund transfers by PSQCA also drew attention, including the withdrawal of Rs 1000 million from the Main Revenue Account at NBP Sindh High Court Building Branch Karachi for investment in TDRs at the same branch, raising concerns about a pattern of dubious financial decisions.
Notably, the reinvestment process itself was also not fair. No competitive rates for the investments were not obtained from other commercial banks through advertisement/ open competitive bidding. Such is the set protocol for public interest and was followed before 2019.
Insiders alleged that initially, the funds were distributed across various NBP branches in Karachi, with a more prudent approach being to reinvest the matured amount in the same branches with updated interest rates. However, the ministry opted to transfer the entire sum to a branch near the Sindh High Court, raising suspicions of preferential treatment.
An insider suggested that Mr. Khalid Ahmed Bablani, Director Finance, PSQCA, might have sought to favor a connection within the designated branch by depositing this substantial amount. Moreover, allegations have surfaced within the ministry regarding potential undisclosed benefits or kickbacks worth millions of Rupees offered by the bank officials, hinting at clandestine dealings.
Manager of the said bank, when contacted for comments, did not answer the phone despite repeated attempts.
Furthermore, Detailed audit of PSQCA has also made certain observations regarding investment during 2021-22 and 2022-23, which reflect that unfair investment is a systemic issue in PSQCA’s financial governance. Audit authorities repeatedly suggested corrective action to ensure compliance with legal standards.
When approached for comment, acting Director General PSQCA Ismat Gul asserted that the investment in the single branch underwent due deliberation, with two board meetings addressing the matter.
However, sources within the ministry contest this claim and differ, claiming that the meetings were hastily conducted online without fulfilling legal requirements. The Chief Finance Officer of the ministry, Shahzad Iqbal Rana is also said to be a party to the hasty decisions, which may invite audit paras and cases at NAB and FIA.
The Ministry of Science and Technology is now facing demands for a comprehensive investigation into the decision-making process and the potential ramifications of this significant investment besides fixing responsibility for such irregularities and favor at the cost of public exchequer.
