ISLAMABAD – The National Accountability Bureau has found defects in the $2.6 billion deal for sale of twenty six percent shares of the Pakistan Telecommunication Company Limited with management control to the UAE-based telecom company, “Etisalat”.
A NAB representative informed the Public Accounts Committee on Wednesday that last month the bureau had pointed out some flaws in the agreement but it could not proceed onward because of lack of cooperation from the ministry of information technology and Etisalat.
He said the case had now been referred to NAB chairman Qamar Zaman Chaudhry. The bureau had started investigating the case in May 2013, he said.
As per the 2004 agreement, the government was required to transfer 3,248 properties to the PTCL. The properties were leased, hired and owned by the federal government.
PAC chairman Khurshid Shah, on May 13, had stopped transfer of properties to Etisalat and sought a presentation from the Privatization Commission on the agreement.
The previous PPP government tried to transfer all properties to the PTCL and secure payment of $800 million from Etisalat, but failed.
According to Privatization Commission chairman Mohammad Zubair, the value of outstanding properties is $92 million whereas Etisalat has stopped payment of $800m since 2007.
He said Etisalat had been requested to pay the outstanding money after adjusting the amount of leftover 34 properties, but it insisted to proceed with the matter in accordance with the share purchase agreement under which the government was required to transfer all the properties to the PTCL.
“Aren’t these properties being transferred to Etisalat?” the PAC chairman asked.
Mr Zubair replied: “As per the agreement the properties need to be transferred to the PTCL, and not to Etisalat.”
Mr. Shah said: “If the properties are going to the PTCL, we have no objection.”
Audit officials informed the meeting that Etisalat had got itself exempted from the audit by the auditor general of Pakistan by invoking Section 6 of the Telecom Act, 1996, in the agreement.
They told the committee that after the passage of the 18th Amendment, the auditor general included the PTCL in the audit plan, but the latter refused to get its accounts audited.
The PAC chairman directed audit officials to conduct the audit of PTCL accounts.
He asked the law ministry to give legal opinion on the matter. The audit authorities, however, said the law ministry had already furnished its opinion and had given a green signal to conduct the audit of PTCL accounts.
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