PAC holds three ex-generals responsible for NLC losses

ISLAMABAD — In an unprecedented move, the parliamentary Public Accounts Committee (PAC) has held three former army generals responsible for financial corruption — in this case the Rs1.8 billion losses at the military-run National Logistics Cell (NLC).

The three retired generals – Lt-Gen. Khalid Munir Khan, Lt-Gen. Mohammed Afzal Muzaffar and Maj-Gen. Khalid Zaheer Akhtar — along with a civilian chief financial officer, Saeedur Rehman, have been found responsible for the losses at the NLC, a commercial logistics company operated by the military.

“In the light of three inquiry reports, the PAC finds serious violation of rules, the prime minister’s directives and discipline and holds three generals and a bureaucrat responsible,” said PAC Chairman Chaudhry Nisar Ali Khan during the committee meeting.

The PAC postponed a decision on penalties, however, in anticipation of receiving the military’s internal inquiry report. Acting Defence Secretary Air Vice-Marshal Najum told the committee that the military had completed its inquiry, and was reviewing it.

The PAC decision comes after months of wrangling between the PAC and the military hierarchy, which had set up its own inquiry commission in November last year even though the PAC had already been investigating the matter since February 2009. The military had initially asked for a month to deal with the issue. It has now been more than seven months since the inquiry initiated by army chief General Ashfaq Parvez Kayani began.

On June 13, the PAC expressed frustration over the slow pace of the military investigation and said that if the military did not submit a response soon, the PAC would have no choice but to take a unilateral decision without any military input.

The PAC is required to submit a complete review of government accounts by the end of the fiscal year on June 30.

Five people in the NLC management — three retired generals and two civil servants — were responsible for illegally borrowing Rs4.3 billion from commercial banks between 2003 and 2008 and investing the money on the Karachi Stock Exchange, incurring a loss of Rs1.8 billion to NLC, which eventually had to be paid by the national exchequer.

Former prime minister Shaukat Aziz had barred the NLC from making such investments in the stock market, but Lt-Gen. Muzaffar is reported to have continued to do so until his retirement in 2008.

“In March, Gen. Kayani shared certain findings of the (military’s) inquiry which are very much in line with our findings,” said Nisar.

He said military top-brass had been acting “hyper-sensitive” in recent days and he urged them to get over their sensitivity and take action against corrupt individuals to save the institution.

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