Auditor General of Pakistan (AGP) has claimed to have detected billions of rupees of financial mismanagement in Zarai Tarqiati Bank Limited (ZTBL) besides declaring Kissan Support Service(s) Limited (KSSL), a company established without the approval of SBP, as illegal.The audit report 2015-16 observed during 2014 audit of ZTBL that the management of the Bank in contravention of the Agriculture Development of Bank of Pakistan (Re-organisation and Conversion) Ordinance 2002, allowed change in the service conditions of ADBP employees introduced through Staff Regulations 2005 on December 30, 2005 for its employees. The employees of ZTBL covered under section 6 of the Ordinance 2002 were also given the opportunity to opt for SR-2005. As a result, the management paid 100 per cent pension commutation to the employees who opted for SR-2005 amounting to Rs 4.514 billion. Moreover, 522 cars amounting to Rs 433.8 million were purchased and allotted to the officers in this category of employees under Car Loan Depreciation Policy (CLDP).According to the audit, the act of the management to change the terms and conditions of service of ADBP employees was not considered lawful by the Peshawar High Court on October 28, 2010 as well as Supreme Court of Pakistan on February 15, 2013.On December 11, 2014, the management reverted all such employees to their previous service conditions across the board except those who wished to continue under SR-2005. The action of the management was against the spirit of section 6 of the ADBP Ordinance 2002 as well as the court decisions. Therefore, audit observed that the ultra vires management decision resulted in non recovery of Rs 4.514 billion and Rs 434 million.The matter was reported to the management and the Ministry on November 27, 2015. DAC in its meeting on January 12, 2016 directed the management to review the matter in the light of Supreme Court''s decision. No further progress was reported till finalisation of audit report.The audit also pointed out: (i) embezzlement in payment of pension funds- Rs 7.028 million; (ii) irregular appointment of officers in KSSL - Rs 84.409 million; (iii) appointment in IT Department in non-transparent manner- Rs 176.530 million; (iv) loss due to irregular appointment of Executive Vice President(EVP) in August 2007- Rs 48.452 million;(v) financial loss on irregular payment due to fixation of pay at higher stage- Rs 18.116 million; (vi) loss due to non-recovery of penalties imposed by the SBP- Rs 9.928 million; (vii) non recovery of the cost of allocated car- Rs 1.392 million;(viii) irregular appointment of Vice President after superannuation-Rs 1.093 million; (ix) outstanding loans in Special Asset Management (SAM) account- Rs 25.741 billion; (x) loans without necessary documents resulting in non recovery to thetune of Rs 75.159 million; (xi) loss due to late filing of intra court appeal- Rs 24.918 million; (xii) non-recovery of loans from the employees of the bank amounting to Rs 16.167 million; and (xiii) non-recovery of special medical ceiling from ex- Chief Operation Officer- Rs 2.904 million.The audit claimed that Rs 8.628 million were paid to the contractors of ZTBL, Vehari building in violation of rules, and a Rs 851.283 million loan was disbursed on forged documents. Wasteful expenditure on acquisition of hardware was Rs 112.742 million, non-recovery of liquidated damages from the contractor of Rs 18.895, appointment of officers without verification of degrees, excess litigation in ZTBL resulting in a wastage of human resources and excess legal and professional charges of Rs 353 million, wasteful expenditure on acquisition of software of Rs 77.550 million and avoidance expenditure on account of services acquired through KSSL- Rs 330.459 million are also part of MFDAC paras.ZTBL BoD is being headed by the private sector, and has failed to improve internal controls. Hundreds of employees have been hired in ZTBL but parked in KSSL. The audit said that the establishment of KSSL was illegal as SBP approval had not been sought for this purpose as SBP, BPD Circular No1 of 2005 serial No(2) of January 28, 2005, states that banks/DFIs desiring to establish any subsidiary must obtain prior approval of SBP.During the audit of ZTBL, Head Office Islamabad, for the year 2014 it was observed that bank management established its subsidiary company KSSL in 2005 without prior approval of SBP. Audit observed that establishment of subsidiary company without approval of SBP and all its activities since its inception viz 2005 are considered irregular. Moreover, issue may be studied in depth with all pros and cons and matter be placed before BoD in the light of SBP guidelines.The matter was reported to the Bank''s management and Ministry on November 27, 2015. DAC in its meeting held on January 12, 2016 directed the management to further clarify the matter and furnish a revised reply and follow up the matter with SBP. No further progress was reported to the audit till the finalisation of report.News SourceNews Collated byPAKISSAN.comCourtesy www.brecorder.com
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