Hascol scam: Parliamentary Panel grills company

Aftab Ahmed

Islamabad: The Hascol oil marketing company has been blamed for Rs 15 billion scam.

Member Senate Standing Committee on Petroleum Afnanullah Khan alleged Hascol for corruption of Rs 15 billion.

Who is responsible for such massive corruption? Member Committee Senator Mohsin Aziz said and said Don’t ignore this issue, talk about it in detail.

A joint meeting of the Standing Committees on Finance and Petroleum should be convened on this issue, Mohsin Aziz said

Secretary Petroleum Dr Arshad Mahmood said that Hascol is claiming more than Rs 60 billion in losses in three years.

If that had happened, the company would have already collapsed, Secretary Petroleum added.

On Eid, petrol had run out at Hascol pumps in different cities of the country, Secretary Petroleum said

If so many losses are happening then what are their boards and general managers doing, Secretary Petroleum questioned.

Senate Standing Committee on Petroleum on Monday met under the chairmanship of Chairman Muhammad Abdul Qadir.

The unemployment of Balochistan engineers and diploma holders in the petroleum sector was on agenda.

The parliamentary body also took up the matter of daily wages employees in Sui Southern Gas Company (SSGC) and Pakistan Petroleum Limited working for the last 16 years.

The issue of cancellation of coal mine lease agreements in Balochistan also came up on the agenda.

The elimination of various taxes on imported LPG was also on agenda.

Senate Standing Committee on Petroleum continues meeting

Sarfraz Bugti said that Pakistan Petroleum Limited did not hire Dera Bugti engineers in light of MoU and added that they did not even receive the full amount of salary.

Bugti thanked OGDCL for regularizing 13 old engineers from Balochistan.

The petroleum officials informed Senate Standing Committee on Petroleum that Pakistan has a daily supply of four billion cubic feet of gas. This also includes 1.2 billion cubic feet of LNG.

Sindh produces 2.2 billion cubic feet of gas and KP 400 million cubic feet of gas per day.

Balochistan produces 800 million cubic feet of gas.

Secretary Petroleum said that local gas production in the country is declining which is a matter of concern.

More investments are required to create more jobs in Sui, MD Pakistan Petroleum Limited said.

We also pumped up to one billion cubic feet of gas per day from Sui that has declined to 340 million cubic feet per day now, MD Pakistan Petroleum Limited said.

Fida Muhammad Member Committee said that oil and gas exploration companies should take steps for the employment of locals.

Chairman senate body Senator Muhammad Abdul Qadir stressed completing Pakistan Stream Gas Pipeline on a priority basis.

He urged courts to assist in the recovery of arrears of gas infrastructure development cess. Efforts should be intensified on the discovery of indigenous oil and gas.

He expressed serious concerns over the declining gas reserves in the country. He said that exploring local oil and gas resources will reduce the import bills.

Earlier,  the Hascol Scam had made its way to Parliament, as the Senate Committee on Petroleum has taken note of the oil marketing company’s prior financial bank default.

In a letter to the Chairman of the Petroleum Committee, Senator Dr. Afnan Ullah Khan drew attention to accusations of an alleged scam in Hascol and bank default.

He claimed that Hascol and its management team, in collaboration with Vitol (a major shareholder in Hascol), had successfully completed Pakistan’s largest financial default (74 billion rupees).

These are significant changes that deserve the Committee’s attention because public funds are involved, he said, adding that, in addition to Hascol, a UAE-based business called Noir Energy DMCC is reportedly participating in this scheme.

Worryingly, the suspected perpetrators of this fraud have established new businesses called Fossil Energy and Clover Pakistan, and he claims that further schemes are on the way.

More Read: HASCOL defaults on Rs54bn bank loans

He recommended convening the Senate Committee on Petroleum as soon as possible. The relevant officials from OGRA, FIA, FBR, SECP, National Bank, and the Ministry of Petroleum be present to inform the Committee about the facts in the current case of the Hascol scam and to clarify the accuracy of news reports.

They should also explain how such a massive swindle and Hascol bank default (if any) could have gone unnoticed. I propose that the personal riches of the persons involved be compared to the income they created in order to determine whether or not any corrupt activities occurred, he added.

Hascol did experience large losses in 2019, which were disclosed in the company’s financial statements. These losses were mostly caused by currency and interest rate risk, as well as high volatility in international oil prices, which impacted Pakistan’s entire oil marketing industry.

Furthermore, in an effort to be completely transparent, Hascol’s new Board recently disclosed to the PSX that they had possibly discovered some fraudulent purchases against fixed assets and that the company was in the process of concluding its investigation to see if there was any impact on the accounts.

Unfortunately, some individuals have linked that to oil imports, which is completely false because all oil imports are managed through a well-structured and strictly regulated process. As a result, these charges are false, and Hascol reserves the right to sue the suppliers for this misinformation.

Read More: Hascol receives 25,000 tons furnace oil import contact

In 2020, a new CEO and Chairman were selected to assume the leadership of Hascol and bring it back to profitability in an effort to turn the firm around and get it back on track. Sir Alan Duncan, a former UK Minister with extensive experience in the oil industry, was appointed Chairman.

Hascol’s new CEO is Mr. Adeeb Ahmad, a corporate investment and restructuring professional with a proven track record. Sir Alan Duncan and Mr. Adeeb Ahmad are both working relentlessly to get HPL back on track, in collaboration with the Board of Directors and the rest of the management team.

This endeavor has become increasingly difficult, particularly in light of the consequences of the COVID-19 epidemic on Pakistan and the rest of the world, as well as Hascol’s large outstanding debt levels and working cash squeeze.

Hascol is making good progress toward improving its financial position, thanks to the perseverance of the newly formed board of directors and Hascol’s management team, as well as the support of the Company’s commercial partners.

Until recently, Hascol had the biggest market share of all Pakistan’s Oil Marketing Companies, and it has played a significant role in Pakistan’s growth. Even as these negative rumors circulated, Hascol was actively arranging furnace oil on an emergency basis so that Karachi would not have blackouts.

Hascol is in discussions with its banking partners on a financial restructuring plan for the company in order to address its present financial challenges, and we have enlisted the help of a team of recognized restructuring professionals from Alvarez & Marsal Europe LLP.