Transparency International demands audit of PIA’s hotels abroad

Pakistan Observer

Transparency International Pakistan (TIP) has pointed out the violation of Public Procurement Rules 2004 in award of renovation contract of Roosevelt hotel New York USA and Scribe hotel Paris France worth over US 25 million as well as irregular leasing out of both hotels by Najib Sami MD PIA.
In a letter to Chairman PIA TIP head in Pakistan said that Pakistan International Airlines Investment Limited (PIAIL) is a subsidiary of PIAC that owns above mentioned two hotels, and it is mandatory for PIAIL to perform similarly as PIA is performing.
Since Najib Sami is appointed as MD of PIAIL about ten years ago, PIAIL has been violating most of the Public Sector Companies (Corporate Governance) Rules, 2013.
According to Federal Government Policy, retirement age is 60 years and in PIA also 60 years is retirement age except for Pilots. But in gross violation of Federal Government retirement age limit policy, PIACL & PIA Boards have many times amended retirement age limit of MD for retaining Najib Sami, from 60 to 63, and then from 63 to 65, and then from 65 to 70, and even now he is still allowed to work as MD PIAIL.
Najib Sami has ordered not to make PIAIL website, so as to successfully avoid hoisting of Annual Reports on the website of Pakistan International Airlines Investment Limited. He has also managed to hide all details of PIAIL for PIA website also. In fact he has made PIAIL an opaque body, as no detailed about its existence, notification, Board of Directors, Annual Meeting, Board Meetings here available on website.
In last ten years or so, family members of hundreds of PIA and PIAIL directors, Ministers, Friends, Politicians, and their friends have been facilitated by PIAIL for free stay in Roosevelt Hotel at New York, USA and Scribe Hotel at Paris, at the cost of exchequer, under MD’s orders. In return to these favours, all of them have managed to keep 71 years old Najib Sami as illegal MD of PIAIL since last 10 years. Complete Audit of last 10 years of hotel guest will disclose the free or concessionary rooms allowed, which may be in thousands of nights.
The Board of Directors of PIA as well as PIAIL has failed to perform their responsibilities, defined in Public Sector Companies (Corporate Governance) Rules, 2013.
Since last ten years, hundreds of millions of dollars contract for renovation of two Hotels have been awarded, without following PPRA Rules 2004. A visit to PPRA website reveals that PIA is posting all Tenders, Planning’s, Evaluation Reports, and Contracts awarded on PPRA website, but no tender or details are posted on PPRA website by Pakistan International Airlines investment limited.
Leasing contracts for the two hotels have also been awarded by MD Najib Sami worth over $ 500 million, without open bidding in violation PPRA Rules 2004, which under PPRA Regulation Rule No. 50, is mis- procurement.
The Audit of Accounts of Pakistan International Airlines Investment Limited, which owns Roosevelt Hotel NY and Scribe Hotel Paris, were never performed by the Auditor General of Pakistan, which is mandatory according to Articles 169 and 170 of Constitution. Not only this, even PIA’s internal auditors have not been allowed by Najib Sami to check the books of accounts of PIAIL, and PIA Board behaved as silent spectators.
Presentations were made to Board on the false profit earned by PIAIL only for the purpose of sanctioning of heavy annual bonus for Najib Sami. PIA Board did not perform its obligatory duty in monitoring affairs of PIAIL.
Najib Sami bought a house in Banigala Islamabad, and thereafter with connivance of political high-ups in the federal government, managed to shift PIAIL office from Karachi to Islamabad in 2013/14, and PIA Head Office is still in Karachi.
In order to facilitate Directors and their families all Board Meetings of PIAIL are held in foreign countries which is against SECP Rules.
Transparency International Pakistan has reviewed the issue on the alleged irregularities committed in Pakistan International Airlines Investment Limited. Following are recommendations for the consideration of Chairman PIA.
Allegations of Irregularity on the Compliance of Public Sector Companies (Corporate Governance) Rules, 2013 by PIAIL and PIA shall be investigated.
Allegations of Irregularity on the Compliance of Public Procurement Rules 2004 by PIAIL shall be investigated.
Appointment of Najib Sami after attaining age of 60 for three times in last 10 years inspire of ban on rehiring notified by Federal Government, shall be investigated. Even Judges of High Courts are retired at 63 years, and Judges of Supreme Courts are retired after 65 years, why and how the services of a 70 years old officer are retained by PIA and PIAIL and the Federal Government allowed this irregular appointment.
10 Years Audit of PIAIL shall be conducted on the Free/Concessionary Rooms given in Roosevelt Hotel at New York, USA & other is Scribe Hotel at Paris, France on the request of Najib Sami. The names and relationships with POH of these beneficiaries shall be checked and declared publicly, similar to the recent list published in newspapers bye Federal Government about the BISP fraud beneficiaries. Incase any or all allegations proves to be correct, actions against all officers and beneficiaries shall be taken to get the exchequers money refunded and measures for the proven irregularities as per violation of SECP, PPRA and Federal Govt Laws, shall also be initiated.

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