IFAP Newsletter January 2012

The Institute of Forensic Accountants of Pakistan (IFAP) (Set up under license of Federal Government of Pakistan issued by Registrar Joint Stock Companies Under the Societies Registration Act of XXI of 1860) January 2012 Monthly The Forensic Accountant (FA) (Official organ of The Institute of Forensic Accountants of Pakistan (IFAP) Look Inside A Articles How to Prevent Financial Fraud in your Organization, 11, 12 President Communication, By: FA Barrister Sohail Nawaz - President IFAP, 4, 5 Recognizing the Elements of Fraud, By: FA Barrister Umer Abdullah - Member Executive Council IFAP, 6-11 Top Corporate Governance Stories of 2011, 12, 13 I IFAP About, 74 Executive Council / Board of Directors, 75 MoUs /Reciprocal Arrangements, 73 Objectives, 74 Recent / New Members, 73 N News International News ACCA News, 71, 72 ACFE News, 48-54 AICPA News, 66-68 AML & Financial Crime News, 54, 55 CIMA News, 72, 73 FASB News, 65, 66 ICAEW News, 68-71 IFAC News, 61, 62 IFAP News, 73 2 IFRS News, 62-65 Serious Fraud Office (SFO NZ) News, 59-61 Serious Fraud Office (SFO UK) News, 57-59 Transparency International News, 55, 56 National News FBR News, 32, 33 Fraud & Corruption News, 13-28 NAB News, 39-41 SBP News, 34-39 SECP News, 28-32 Transparency International Pakistan News, 41-48 3 New laws and statutes regarding information technology often take a long time to prove useful. The technology used by criminals and fraudsters is changing constantly and forensic auditors need to stay on top of their game to prevent and detect these crimes. One caveat." The fast-changing world of information technology and the exponential increase in the use of computer systems threaten the forensic auditing fraternity. Based on the audit risk assessment. in your work. Case law can help to expedite these reforms. The law needs to evolve alongside forensic investigations to successfully transform and allow for the change in technology and the way business is conducted in the world. The education of law enforcement. legislators and the judiciary in computer literacy will also ease the task of prosecuting computer criminals. is that these security tools should not be exploitable by hackers and fraudsters to aid them to commit their crimes. are necessary to bring computer criminals to justice. Through the growth of the Internet and connectivity technology.President Communication Dear Professional Colleagues. The law and the courts are not evolving fast enough to deal with computer crimes. recognizing that condition or events may be found that indicate that fraud or error may exist. the threat of an external attack by the former employee can be minimized. It is expected that the Forensic Accountant/Auditor to implement procedures that will lead to the discovery of errors or fraud without significant impact on the financial statements can not be held responsible for undetected such irregularities. "There's no question that the Enrons and WorldComs of the world have heightened the need for better governance. Forensic Accountant/Auditor should develop programs to audit procedures by which to obtain reasonable assurance that the financial statements in their entirety. the shareholders' crusade for more open. The forensic auditor is only as good as the follow-through with successful litigation. even if the audit is planned and done properly. well-run companies is gaining strength across many major and emerging markets. The Forensic Accountant/Auditor should plan and perform the audit with an attitude of professional skepticism. A risk assessment can also help to reduce the likelihood of fraud. the world is faced with opportunities for crime and fraud that were not available before. the implementation of audit procedures more than usual However the Forensic Accountant/Auditor faces the risk inevitable that some significant errors to be detected. In what some call a worldwide corporate-governance movement. With trillions of dollars in capital sailing the globe in search of investments. all significant errors and fraud have been identified. Employees and ex-employees with a thorough knowledge of the computer systems of an organization can pose a significant risk to the security of the system. Although the Forensic Accountant/Auditor is not and cannot be held responsible for preventing fraud and errors. teaming with investors from different countries and negotiating behind the scenes with businesses. This can be done by employing former hackers to write security tools to aid Forensic Accountants/Auditors. Surprise audits can assist to control the risk of current employees perpetrating fraud. as well as extradition laws and international cooperation. though. shareholders are pushing for stronger corporate-governance laws. Forensic auditing techniques need to evolve just as fast as the techniques used by hackers and criminals. In earlier years. it was hard for shareholders to dig up details from thousands of 4 . he can have a positive role in preventing fraud and errors by deterring their occurrence. Reforms in laws and statutes of specific countries. Prosecuting computer crime and computer-based fraud is becoming increasingly difficult to accomplish. The rate at which the law is adapted to accommodate computer crime needs to be increased if such crimes are to be prosecuted successfully. He should ask the management information concerning any significant fraud or error has been detected in order to detect key problems that could lead to certain activities. By changing access control procedures after an employee has left the organization. Responsibility for preventing and detecting fraud rest with management entities. The Forensic Accountant/Auditor should communicate with the management of his client. and that momentum has carried all over the globe. while standardization of processes throughout the organization improves financial services organizations‘ overall processing efficiency. Financial services organizations that undertake a comprehensive. This tells us how firms operate. Directors. whereas a similar business may have dozens of bank accounts and a straggling group of companies. We now realize that constantly rising share prices is not necessarily a sign of good corporate governance. the Judge and the Jury. other people's money. Activities aimed at improving data quality can support better business intelligence. In fact. Many solicitors working in all areas of the law routinely use Forensic Accountants (FAs) to assist them with the financial and business aspects of a case. Complexity of financial accounts is often cited as a red flag of fraud. This examines why forensic accountancy adds value to any fraud matter. 2012 5 . helping to protect your organization from the financial and reputational loss associated with financial crimes. Many businesses will use a different bank account for each strand of their business operation. forensic accounting would be needed to break things down to a simple level and present almost as if the business was like the single company. the lawyers. This includes the police or other regulators. too many people took their eye off the ball and now we see the consequences. there are many instances where it is essential that a clear and succinct picture is drawn up of any particular transaction. their directors. Complex group structures with inter-company transactions and charges often cloud the simple facts of the business taking place. some solicitors may be faced with the need to instruct an expert accountant for the first time. but also policymakers and the general public. regulators and shareholders. structured approach to the prevention and detection of fraud and financial crime can obtain benefits that contribute to higher performance as well as reductions in fraud loss. holistic management framework that integrates disparate detection systems with alert and case management can automate crime prevention. so that a complete understanding is facilitated for all parties. Then they might have several companies to act as vehicles for different aspects of their activities. When times were good. often having several accounts for each company. executives' pay packages and other information critical to making investment moves. many of whom do not have a clear or detailed understanding of finance issues. who they are accountable to. Financial crimes threaten your organization at multiple points of vulnerability. as recent history shows.global companies on their finances. However. Focusing on a single channel or line of business can hinder management visibility and allow fraud and money laundering to go undetected. remuneration and. Forensic accountancy is often no more than presentation of financial issues in a form that is easily understood – by disputing parties. but often it can simply be the policy of the company owners structuring their business innocently. in the case of many financial firms. Leveraging detection systems for both fraud prevention and detection and anti-money laundering (AML) processes helps reduce risk and improve analyst efficiency. not least in relation to executive pay. Thus one business may run with one company and one bank account. business crime defense or confiscation proceedings. Sometimes business losses are targeted by the regulators as frauds simply because the money trail is confusing! In short. it could actually be the opposite. or must explain to a particularly demanding client why there is a need to spend additional money on appointing another person to the team! Victims of fraud may wonder if spending more money investigating their loss is worth it. And even some top executives have now admitted the lack of relationship between pay and performance and called for a salaries shake-up. Sometimes the reason is to cover up fraud. money laundering or matters of finance generally tend to be more complex than other disputes. The complexity of the group might mean that if a dispute arose. their motives and principles. FA Barrister Sohail Nawaz President – IFAP January 31. A single. or series of transactions. Any criminal or civil dispute involving fraud. The public outcry has been loud and understandable. The reason why loss has occurred is often due to the confusing nature of money transactions hiding somebody‘s attempts to steal. need to pay more attention to corporate governance. their reporting lines. and how they manage profit. receiving. or for the benefit and gain of an organizational entity or program.A federal conspiracy statutes also apply. or indirect (reward of promotions. the lawful duties of that official. a fraud could be prosecuted as a felony under both state and federal laws. the benefits and gains may be direct (receipt of money or property). obstructing justice. When seeking payment. under U. FRAUD occurs when all of the following elements exist:    An individual or an organization intentionally makes an untrue representation about an important fact or event. under U. This includes influencing or 6 .S. forgery or insurance fraud. Fraud can be for the benefit and gain of an individual. and may prosecute other types of fraud under larceny. fails to report the fraud to appropriate authorities. I'd say that agency official is a crook.S. Whenever the U. and helps to conceal the fraud by giving false information. The victim suffers loss of money and/or property as a result of relying upon and acting upon the untrue representation. Because the contract is part of a federally funded program. These laws also usually contain specific statutes for prosecuting fraud. or taking some other positive action.S. The untrue representation is believed by the victim (the person or organization to whom the representation has been made). or failure to perform. Therefore. the contractor bills the hours for non-contract work as having been expended on contract related activity. Generally. Other states may have specific laws to deal with bribery and corruption. anyone who has knowledge that a felony fraud has actually been committed against the U.A government.S.Recognizing the Elements of Fraud By FA Barrister Umer Abdullah (Member Executive Council – IFAP) A government agency official directs the owner of a company doing business under contract to provide equipment and contractor staff that will be used to perform non-contract related work for the agency. which the federal government. the matter falls within the jurisdiction of the US Justice Department and the federal courts. Bribery Bribery is the giving. When an individual commits fraud. power and influence). 1. anyone who engages in fraudulent activity and uses telephones. there are twelve crimes that fall under the umbrella of Fraud.S. and if two or more persons act in collusion to defraud. is also guilty of a felony crime punishable by up to three years in federal prison. in the form of financial gain. offering. or soliciting of any "thing of value" in order to influence an official in the performance of. Some states have specific fraud statutes. telegraph and/or the Postal Service to discuss or either send or receive correspondence or documents in furtherance of the fraud. pays. The victim relies upon and acts upon the untrue representation. In addition to the general laws governing fraud. Also. Some people might say that the agency official is a creative manager. the agency in turn files a claim for reimbursement with the federal government. federal law. embezzlement or other specific statutes.A federal Law. When an organization (actually an employee acting on behalf of the organization) commits fraud.A government is injured through fraud. In addition. the benefits and gains to the organization are usually direct. in good faith. The billing occurs with the knowledge of the agency official.A laws that deal with and/or regulate specific industries and business transactions.S. Some examples would be statutes pertaining to bank fraud. and the agency official instructs lower level staff to approve the bill for payment from agency accounts. there are U. bonuses. U. can be prosecuted for felony mail fraud and/or wire fraud. robbery. concealing facts. even though the contractor's work is substandard. any act that violates the lawful duty of that official. Conflict of interest can exist on its own. In this situation. receiving. the victims are those who expect satisfactory performance of contract terms. the favored contractor wins the bid award at a noncompetitive price. to do. and has. and lower level staff in the organization have legitimate concerns about the cost of the contract and the contractor's ability to perform. 3. the victims are those who rely upon the honest reporting of deficiencies. or collusion to commit. then fraud has occurred. receiving. A senior organization official accepts financial and other incentives from a contractor to assure that a request for proposals is written in such a way that only that one contractor will be able to submit a satisfactory bid proposal. after the fact. or appears to have. or soliciting by an official. Following are examples of bribery and illegal gratuities: A government inspector solicits payment from the owner of a business regulated by a government agency. Illegal Gratuity An illegal gratuity is the giving. In addition. a hidden bias or self-interest in the activity undertaken. or omit to do. As a result. The owner of a company doing business under contract for an organization knows that the manager responsible for overseeing the contractor's activities plays an influential role in deciding whether or not the contractor is satisfactorily meeting the performance terms and conditions of the contract. The contractor secretly gives financial and other incentives to the manager in return. the victims are those who expect a fair and impartial competitive procurement process. any other type of fraud. for which additional illegal gratuities are received. The manager uses personal influence and position to assure that the contractor receives satisfactory performance evaluations and is paid. and the hidden bias or self-interest is not made known to the individual or organization being represented. and the hidden bias or self-interest is actually or potentially adverse to the interests of the individual or organization being represented. 7 . offering or soliciting of any "thing of value" in order to influence a business decision without the victim's (usually a business organization's) knowledge or consent. offering or soliciting. In addition. the senior official uses personal influence and position to persuade other senior officials that a good faith effort to obtain competitive bids has been made. The loss is dollars needlessly spent as a result of noncompetitive pricing and price gouging. In this situation. The loss is dollars paid for unsatisfactory work. the inspector fails to report important safety and financial violations discovered during the last inspection. Conflict of Interest A conflict of interest occurs when a person or organization acts on behalf of another individual or organization. once the contract is in effect. 2.soliciting the commission. Commercial Bribery Commercial bribery is the giving. the same senior official approves and justifies several high cost contract amendments. When a person's conflict of interest results in economic or financial loss to the individual or organization on whose behalf the person is acting. and the loss is salary paid to the inspector for work not performed. of any "thing of value" for or because of an official act that has been taken. In this situation. Conflict of interest laws apply to government employees and those doing business with government. In return. In the non-public sector. or can be an intricate part of other frauds such as bribery and illegal gratuities. plus any damages that result from failure to perform. or influencing an official. Bribery defrauds the victim (usually an organization or political entity) of the right to honest and loyal services from those employed by the victim.   4. below). in good faith. The loss is dollars needlessly spent on overpriced or unnecessary goods and services. When seeking payment. If that conflict of interest results in unnecessary orders being filled or paying higher than fair market prices for the goods or services. The example given is a fraudulent act resulting from conflict of interest because the actions of selfinterest by the contractor and the official acting on behalf of the agency are hidden from the state and federal governments. If the fraudulent billing occurs with the knowledge of the agency official. If the official or employee is in a position to influence the amount of business the vendor does with the company. The victims are the state and the federal government. Example of False Statements and False Claims: An employee prepares and submits a monthly payroll time report. obtain state and federal funds and use those funds for other than intended program purposes. pays. although the criminal results of such conflict would be. This favor and benefit creates a conflict of interest because there is no longer an arms-length relationship between the agency.   The examples given for bribery and illegal gratuities are also examples of conflict of interest resulting in fraud. this more subtle type of conflict of interest could occur if government officials. which acts on behalf of the government. which the federal government. and intentionally falsifies the document by not reporting unpaid leave taken while the supervisor was away on business. from which the funds were obtained. Conflict of interest can also occur and result in fraud without the presence of bribery and illegal gratuities. and the agency in turn files a claim for reimbursement with the federal government. This happens when an individual or organization acting on behalf of another individual or organization has a hidden financial interest in the outcome of an event or transaction. in acting as the conduit of state and federal funds. The victims here are those who expect company officials and employees to act in the best interests of the company. either alone or in conspiracy with providers of services.  Conflict of interest can also exist and result in fraud when an organization has a hidden interest or benefit from the outcome of an event or transaction. then fraud has occurred. for example. This is because the involved individuals will benefit financially through higher valuation of stock or direct distribution of proceeds from doing business with the company. and constitutes obtaining state and federal funds under false pretense (see False Statements and False Claims. the government agency. and the contractor. rather than in selfinterest. who has a hidden financial interest (stock or direct ownership) in a vendor doing business with the company. then the contractor has committed fraud. In a government environment. False Statements and False Claims A false statement fraud and false claims fraud occur whenever anyone knowingly and willfully falsifies a material fact or makes a false or fictitious representation or files a false or fictitious claim that results in economic or financial loss to the party to whom the false representation has been made. In this instance. and/or the agency official instructs lower level staff to approve the bill for payment from agency accounts. and the loss is the funds illegally obtained. if the contractor intentionally bills the hours for non-contract work as having been expended on contract related activity. The typical example is that of a company official or employee. then a conflict of interest exists. As a 8 . then the agency official has also committed fraud under federal law. acting on behalf of the government. An example of this would be the following situation:- An agency official directs the owner of a company doing business under contract with the agency to provide the agency with equipment and contractor staff that will be used to perform work for the agency that is unrelated to the terms and conditions of the contract. or an immediate relative of an official or employee. 5.conflict of interest may not be a prosecutable offense. and unrelated to the federal program under which the contract is funded. has a hidden self-interest that is actually or potentially adverse to the interests of the state and federal government. Though the employees neither benefited from the mischarging. or economic or property losses incurred because of the improper reporting. nor were aware that the mischarging was illegal. the victims are those who rely upon the honest reporting of safety issues and deficiencies. When the employees question their instructions. The employees recognize that the wrong program is being charged for their time. and the loss is the money wrongfully paid to the employee. when the government was billed for reimbursement. result. If the contractor fails to cooperate. favors or services without compensation to the contractor.S. the company managers were able to defraud the government of costs that should have been borne by the company. A company performs contract work for a government agency.  6. false claims mail fraud and conspiracy statutes. Under U. Under the direction of company managers staff charge time to a government program that reimburses 75% of incurred costs.  9 . The loss is salary paid to the inspector for work not performed and the money extorted from the business. instead of charging the time to the actual government program that they worked on. including fear of economic or fiscal loss. The government is subsequently fraudulently mischarged as a result. A senior company official disagrees with a court decision for which all legal remedies have been exhausted. the contractor complies. the victims are those who rely upon the official to carry out duties and responsibilities with honesty and integrity. they are also parties to false statements. As a result of the employees' actions. the company managers tell them not to worry since both programs are paid from government funds. The failure to comply with the ruling results in the chief operating officer filing false statements. Faced with a threat of economic and fiscal loss. The loss is the cost to the contractor of providing non-reimbursed services. and in order to secure the payment. the business owner makes the payment. Extortion Extortion occurs when a person or organization obtains something from another individual or organization under color of official office and/or through the use of actual or threatened force or fear. the employees who filed the false time reports are guilty of conspiracy to defraud. The decision has a significant financial impact on operations. the employee is paid for the time not worked. and the loss is funds illegally obtained or expended. The victims are those who rely on accurate reporting to the government. the official threatens to blacklist the contractor and cut the contractor off from any further work. The senior official knowingly and intentionally continues practices that the court decision has prohibited. An official responsible for contract procurements also has a great deal of influence among contract procurement officers in other companies and government agencies. the employees concealed the fraud. which only reimburses 50% of incurred costs. Examples of Extortion: A government inspector solicits payment from the owner of a business regulated by a government agency. The same principle applies to an employee who falsifies a travel voucher by reporting expenses that were not incurred. In this case. reports and vouchers with the government. law. the contractor must provide special gratuities. and the cross-charging doesn't really matter. and by falsely preparing the time documents. false claims. The employees knew they were improperly charging their time. but are unaware of the differing reimbursement percentages. and which the company must therefore comply with. The official informs a contractor that in order to continue receiving contracts. In this situation. and probably mail fraud. The victim is the employer. the inspector threatens the business owner with charges of severe code violations and heavy fines. The company managers have engaged in fraudulent activity that results in false statements. Faced with a threat of economic and fiscal loss. Whether they knew that the mischarging was illegal is not a consideration. telegraph and/or the U. who is employed by and owes a duty to an organization or another individual. Conspiracy Conspiracy occurs when there is the specific intent that a crime be performed. When two or more persons conspire to defraud the United States. as a civil offense. Embezzlement Embezzlement is the fraudulent conversion of personal property by a person in possession of that property where the possession was obtained pursuant to a trust relationship. 9. the persons who have committed wrongful acts can be sued for damages in civil court. the elements of proof required for conviction are considerably simpler than for criminal fraud. The victim is the organization. An example would be failure to design adequate systems of internal controls that ensure the accuracy of data and information upon which company funds are disbursed. Under U. Examples of Embezzlement: Typical examples are the use of a kiting or lapping scheme to steal money. 8. exchange correspondence with co-conspirators or victims. not a criminal offense. each person is subject to a $10.000 fine and imprisonment of five years. These fall under the umbrella of gross negligence.7. there are various degrees of conspiracy. and making false statements are felony crimes.S. Examples of Breach of Fiduciary Duty: All the previously cited examples of bribery. They are also breaches of fiduciary duty. Examples of Mail and Wire fraud:If any of the perpetrators of the previously described crimes used the postal system to mail reimbursement claims. However. Postal Service to discuss or either send or receive correspondence or documents in furtherance of the fraud. Breach of fiduciary duty is a civil matter. and abuse. conspiracy is a felony. ranging from misdemeanors to felonies. Similarly. submit/return contract amendments. and the loss is the funds inappropriately disbursed. federal law. gross mismanagement. federal law. and there is an agreement with another person to engage in or cause that crime to be performed. depending upon the crime that is committed. anyone who engages in fraudulent activity and uses telephones. 10 . then they can be prosecuted for wire fraud. Breach of Fiduciary Duty A breach of fiduciary duty occurs when a person. or if co-conspirators discussed related activities over the telephones or in any way used telephones or telegraph to carry out the fraud.S. can be prosecuted for felony mail fraud and/or wire fraud. mail bid announcements. or in any way used the postal system to carry out the fraud. if a modem was used to electronically exchange data or file claims related to the fraud. for any purpose or in any manner. illegal gratuities. and one of the conspirators commits an overt act in furtherance of the conspiracy. and it is not necessary to prove wrongful intent. Mail Fraud and Wire Fraud Under U. There are other types of breach of fiduciary duty.  11. then they can be prosecuted for mail fraud. This means that in addition to criminal charges. fraudulent conflict of interest.S. At state and local levels. or any agency of the United States. does something that is not in the best financial interest of that organization or individual. Examples of Conspiracy All of the crimes previously described could be prosecuted under conspiracy statutes if the elements of conspiracy exist. then that individual is guilty of a felony crime punishable by up to three years in U. and fails to report it to appropriate law enforcement authorities a prosecutor could argue that the failure to report is an "affirmative act" by the auditor to conceal the fraud. so there are strict measures in place to govern companies in this industry. thus "lapping" the two accounts. law enforcement authorities. or cash is obtained from legitimate sources. To cover the initial theft. Consider the implications of this for auditors: Since the auditor's primary duty is to examine. In reality. This means following up on references. regardless of its size:- Hire the Right People The first step to stamping out financial fraud is to be vigilant about the people you hire.S. The perpetrator initially steals cash tendered in payment of an outstanding receivable. Even if you are not mandated to follow these standards it is good practice to use them as a guideline for how you conduct business. by writing checks against non-existent account balances. and fails to report the fraudulent act to appropriate U. making false statements to investigators regarding the fraudulent act.Kiting can occur when a bank allows withdrawals to be made on checks deposited by a customer but for which the actual funds have not yet been collected from the bank on which the check is drawn. The fraud is perpetuated by continuous "kiting" from bank to bank checks that are drawn on non-existent funds. Adopt Proper Financial Standards There are internationally accepted standards of conduct surrounding financial transactions and depending on the industry you are in you may be legally required to train your employees to understand and accept them before they are hired. or any other affirmative action designed to conceal the fraudulent act from authorities. The unfortunate truth is that while financial fraud is usually heavily publicized if the company at the center of the controversy is large or publicly traded. and the loss is the money paid out by the bank. and then actively engages in concealing the fraudulent act or evidence of the fraudulent act. federal prison. The following are a few steps that can help any organization to reduce the incidence of financial fraud. If you take the time to choose the right people from the start you are less likely to run into problems later on. directly or indirectly causing others to withhold or suppress information pertaining to the fraudulent act. and the loss is the amount of money stolen. doing background checks if necessary and using proven interview techniques to detect personality traits that may raise red flags before you offer a contract for employment. In a kiting scheme. hiding or destroying official records in order to conceal the fraudulent act. The victim in a lapping scheme is usually the company from whom the money was stolen. Lapping is the use of funds received from payment of accounts receivable to cover a theft of cash. if an auditor becomes aware of fraudulent activity. Failure to Report a Federal Felony to Appropriate U. The financial industry for instance routinely deals with sensitive information and there is ample opportunity for all types of financial fraud to occur. How to prevent financial fraud in your organization Financial fraud affects not only the person who commits the act. Examples of acts to conceal fraud include: changing. these acts of dishonesty can also occur in small and medium sized businesses and perhaps these companies are more susceptible to fraud because there may be a lack of measures in place to prevent them from taking place. but also casts the company involved in a bad light.S. Payment from a third customer is used to cover the second account. Goods and services are then purchased. 11 . 12. the victim is usually the bank that has paid out on uncollected deposits. evaluate and report. suppression of evidence regarding the fraudulent act. a payment made by a second customer is charged against the account from which the initial theft was made. Law Enforcement Authorities If an individual: knows that a fraudulent act has been committed under federal law. the cash could either be in transit or non-existent. and so on.S. For example. Sino-Forest saw more trouble. 2011 Olympus acknowledged that it paid a record-breaking $687 million to financial advisers for its purchase of a U. Top Corporate Governance Stories of 2011 From the collapse of MF Global in the U. 2011 I wrote an article explaining that the company‘s British CEO. Regular meetings and workshops should be held to sensitize employees on the issues and possible breaches of policy that may make room for financial fraud to occur. who had previously said the 12 . An annual audit also provides an opportunity to highlight issues of inefficiency that may otherwise go uninterrupted for a long time. a Canadian-listed Chinese forestry company. a number of institutional investors criticized Sino-Forest for not following globally recognized best practices when it comes to corporate governance. saw its share price fall by more than 80% after activist investor Muddy Waters claimed that the company lacks legal rights to much of the land it claims to own and that there was reason to suspect ―stratospheric‖ fraud. Conduct Annual Audits Although it may not be mandatory for your company to undergo an annual audit this type of action sends a strong message that you are serious about detecting and dealing with financial fraud. like the Ontario Teachers‘ Pension Plan (OTPP) raised concerns about the fact that Sino-Forest never separated the roles of Chairman and CEO. I wrote an article explaining that according to data from GMI.S. Olympus in Focus: Japanese Camera-Maker Faces Serious Governance Criticism In 2011 Olympus found itself at the center of the largest corporate governance scandal in Japan‘s recent history. In June. Other investors. 2011 was a year filled with high-profile corporate governance stories. Sino-Forest. became the target of an investor lawsuit. Governance policies at Chinese listed companies continue to face scrutiny from international investors. compared to 75% in the U.K. company. In October.Make Employees Aware of Rules and Procedures It is not enough to make a high level decision to accept standards to deter financial fraud. but the rules and procedures must be passed down to all levels of the company for them to be effective. The tips listed above can go a long way towards creating a creating an environment that is free from any illegal action and one that engenders the trust of your consumers and clients. only a fifth of the independent directors at major Chinese corporations appear to have significant relevant industry experience. confirming a key allegation made by Mr. Sino-Forest missed a $10 million interest payment. had been summarily fired by the company‘s board. There are a number of things you can do to prevent financial fraud in your organization.8 billion worth of debt. allegedly after he raised questions about massive advisory fees Olympus made in connection to a recent deal. In October. and in December.‖ Furthermore. to a string of bailouts in the European banking sector. In the second half of 2011. Woodford and contradicting statements by the company‘s chairman Tsuyoshi Kikukawa.. and saw its CEO resign. In August the company launched an internal investigation into Muddy Waters‘ claims. Only two major companies in China have appointed an independent director who is a risk management expert. investors have raised concerns about the fact that Sino-Forest director Simon Murray attended fewer than 1/5 of his regularly scheduled board and committee meetings. Below are a few highlights from “Governance Perspective” stories in 2011. In November.S. In 2011. so there are other benefits as well.A Canada-Listed Chinese Lumber Company Comes Crashing Down In June 2011 Sino-Forest Corporation. defaulting on $1. Michael Woodford. the New York City based corporate governance research firm. Canadian regulators opened an investigation into the company‘s finances. ―only 1/3 of the directors at Chinese-listed corporations are independent. to conduct an independent investigation. In 2011 as authorities in the U. In late October. and saw its offices raided by Japanese prosecutors. National News Fraud & Corruption News Expensive Government land on Murree Road allotted illegally Government land costing billions of rupees on the Murree Road has allegedly been allotted. Murdoch. or appoint an independent chairman. While widening the Murree Road in 1998-99.‖ Only three of the company‘s 14 directors are independent. Mr.K. who also holds the post now. Murdoch has held the dual roles of Chairman and CEO. Olympus‘s former CEO. and shown no qualms about appointing his children to senior executive positions. Olympus denied the allegations of misconduct. however. None of the company‘s independent directors have experience in the camera or electronics industries. One of the company‘s independent directors is a medical doctor.‖ Given the company‘s governance structure. 2011 I wrote an article explaining that as the result of an ongoing investigation into allegations of phone hacking and other illegal conduct by News Corp employees and affiliates.‖ but also added that News of the World accounts for ―less than one percent of our company. 2011 I explained that ―News Corp.‘s Serious Fraud Office. The company has yet to explain why it paid advisory fees worth more than a third of the value of the deal to two financial companies. Murdoch to effectively control director elections and other matters that are subject to shareholder vote.‘s parliament. Kikukawa.‖ I explained that ―for a number of analysts… the current scandals are a sign of much deeper management problems. Federal Bureau of Investigation. it was no surprise when at the company‘s 2011 Annual Meeting. Kikukawa resigned as Olympus‘s chairman. rather than looking out to a field of better qualified external candidates. even though he does not own a majority of the company‘s outstanding shares. Rupert and his slate of directors were re-elected to News Corp‘s board. Murdoch‟s Management Style Comes under Fire In July. which employs 55.S. including Mr. Furthermore. On December 21. Murdoch told Parliament that in spite of the scandal. In July. arrested one former employee after another. stifled internal dissent. By all accounts.000 people around the globe. the U. the then Punjab chief minister. the company‘s 71 year old Chairman and former CEO.‖ For decades. 13 . has stated publicly that he commissioned Pricewaterhouse Coopers. The company announced that its entire board would resign by early 2012. to resign. had decided to allot alternate land instead of financial compensation to some of the affected persons.payment totaled about ¥30B yen ($390M). 2011 article I explained that ―it seems clear that the company‘s board has failed to effectively provide independent oversight on behalf of shareholders. and by authorities in Japan. the results of which he distributed to the board of directors. News Corp‘s legal troubles will continue in 2012.K. although publicly traded. the company found itself targeted by investigations by the U. He said that the day before he was fired he had called for Olympus executives. had to testify before the U. one of which is based in the Cayman Islands. but in the end. and saw his management style face unprecedented criticism. In December. has not indicated that he will loosen his grip on the board. Rupert Murdoch. he thinks that he is still ―the best person to clean this [mess] up. Woodford. The company‘s legal troubles will no doubt continue in 2012. Mr. In an October. Olympus announced a $1 billion hole in its balance sheet.‖ In a subsequent article in October. 2011 a 52 year old British police woman was arrested in connection to the News Corp scandal. Murdoch closed down his News of the World subsidiary. Mr. one of the world‘s highest profile media magnates. features a dual class share structure that allows Mr.K. the accounting firm. not one independent director appears to have significant experience in risk management. He told the audience that ―this is the most humbled day of [his] life. 63 per cent in case of SNGPL. revenues from metering plant and Jamshoro Joint Venture as operating income in Dec 2010. the ineptness of those running the sector simply compounds an already critical situation.36 in a matter of days. this was vetoed by OGRA`s member gas. the Highways Department first got transferred six acres of land on the main Murree Road owned by the Agriculture Department in their own names and then transferred it illegally to fake victims. Mohammad Hashim Khan. putting the total estimated loss at over Rs. followed by another 15 per cent increase in August last year and about 14 per cent with effect from Jan 1. These conditions specified that required late payment surcharge meter manufacturing profit. No wonder then that the initial information about this scandal. thanks to an inquiry conducted under the orders of the Supreme Court. the gas companies UFG losses touched eight per cent in case of SSGCL and 9. income from Jamshoro Joint Venture and sale of condensed gas was to be treated as operating income which was to be transferred to the consumer through a subsidy on bills. was ignored. Under the agreement signed by the gas companies and OGRA. A six-member committee consisting of officials of the Revenue and Highways departments in the light of a detailed report of tehsildar Rawalpindi had ruled that all bogus allotments may be cancelled and the land illegally allotted maybe got vacated. there was a 13 per cent increase in gas tariff for that year. son of Haji Manzoor Hussain. Likewise.16. Two other real claimants Mohammad Usman and JamilaAkhtar were also not included in the list. Gas consumers are reported to have suffered a whopping Rs. A perusal of the public record. and set losses at seven per cent for 2009-10.2 per cent respectively.16 on Sept 23 jumped to Rs. Consequently. has galvanized the National Accountability Bureau (NAB) into action. As a result. The bureau has sought permission to start formal criminal investigations with the aim to fix responsibility for the `improper` decision. 2011. He tried to reverse the decision in Dec 2010 by reducing the UFG benchmark to five per cent and treating late payment surcharge.5 per cent. However. The agreement required that the gas companies would bear the burden of loss beyond the agreed benchmark and earn as profit if they surpassed the target. The story. causing over Rs350 billion losses to the national exchequer on account of alternate fuel imports.70 billion. After probe.37 billion ( Rs. As it turned out. The UFG benchmark was increased by the OGRA on the plea that in the absence of a study on UFG and change of ground realities in terms of security situation and expansion of gas network from bulk consumers to retail sale as a result of village gasification. Then OGRA made a substantial departure from its own previous decisions and targets. But this is not the end of this story of wrongdoing and exploitation of the consumer.5-5. according to the documentary evidence available with Dawn.10 billion. The Revenue department had also declared the allotment illegal six years back. The latter were also robbed of their subsidies which were rerouted to the companies instead. This burdened the gas consumers with Rs. Officials said this decision violated the World Bank and Asian Development Bank loan conditions. the shareholders of the two companies reaped windfall profits. the UFG losses were required to be gradually reduced to 5. this `wrong` decision to increase prices was leaked in advance allowing powerful brokers to pick up extra stocks of gas companies from the market and make a killing. Raja Shafqat.70 billion loss over three years thanks to a single decision of the Oil and Gas Regulatory Authority (OGRA) to hike the prices in a violation of then rules. Informed sources said the Sept 2010 decision to increase UFG to seven per cent and to treat revenues from operating assets as non operating income was shared by OGRA leaders with powerful stock exchange brokers sitting on the board of directors of the gas companies. And worse still. it estimated unaccounted for gas (UFG) losses at 4. On the other hand. These losses are now in excess of 9.20 billion on account of Sui Southern Gas Company and Rs.5 per cent and 11.5 per cent in 2009-10 from their actual losses of about seven per cent. was also allotted land while the actual claimant. As the stock players earned over Rs. The committee had also ruled that the genuine affected persons may be given alternate lands elsewhere. the then OGRA chairman tried to reverse the decision after an onslaught of public criticism. it was learnt that land was provided to Raja Abdul Latif without any legal justification ignoring the legal claimant Zia Rashid. starts back in Sept 2010. OGRA`s move robbed consumers of Rs.Working swiftly.70 billion If the gas shortage were not bad enough. son of Raja Mohammad Siddiq. the SSGCL share being traded at the stock exchange for Rs.6 billion for Sui Northern Gas Company Limited). suggests that OGRA in its 2005-06 14 . In the past. however. While during last 30 years. It said the UFG level for similar integrated companies in Australia ranged between 1. Mian Khurram Rasool.90 million under different heads to the complainant and owner of Home Craft. The accused also kept claiming during this period to be a close buddy of Prime Minister Yusuf Raza Gilani. The News has learnt. Khurram Rasool had given cheques for Rs. NRO beneficiaries not entitled to hold Government Office: CJ Chief Justice Iftikhar Muhammad Chaudhry on Thursday declared that the beneficiaries of the defunct National Reconciliation Ordinance (NRO) could not hold government offices. vide letter No. adding that the argument for aging network was also not sustainable for the fact that it has been allowing expenditure on system augmentation and maintenance of gas pipelines. appeared in person. NAB chairman. These companies had consumers in excess of 500. All the checks were dishonored. higher pressure requirements and related factors`. Running under the Labor Department. and said Sharmila had taken relief under the National Reconciliation Ordinance. has complained to the Public Accounts Committee. As such. including socioeconomic patterns. The Chief Justice observed that if she had taken relief under the plea bargain. The chief justice ordered the removal of objections placed by the Registrar‘s office on the application and directed it for regular hearing.100 million from Karachi firm The prime minister‘s former media coordinator. a director of the said company. OGRA said. Audit refused as SESSI fraud surfaces Sindh Employees Social Security Institution (SESSI) has once again refused to get its accounts audited. health and other welfare institutions in the private sector. Petitioner Habib Wahabul Khairi. Ministry of Law and Justice. five Afghan diploma holders had been appointed doctors a few months back in grade 17 in SESSI.100 million from a big business house in Karachi. Rasool took Mian Hamoodur Rehman. Sindh. SESSI had been established in 1970 for welfare of the workers in education. has swindled Rs. to the PM House in Islamabad to 15 . The Audit Department. while such losses in the UK were estimated at 0. 80. Khurram Rasool swindles Rs. The NAB in its inquiry report submitted to the apex court said `unless the decision is reversed Rs7-8 billion will continue to be added on a yearly basis for indefinite period of time` and recommended `conversion of the inquiry into investigation` to scrutinize the record for further deliberations. Sharmila Farooqui and State Bank as respondents. the independent institution known as SESSI had been earmarked Rs 2. Government of Sindh.000 and up to four million. Under formal investigations. Africa.9 per cent and three per cent. In 2011. refusing to provide the required record to the audit team. The OGRA had reported in its 2005-6 judgment that UFG in nine gas companies in the US stood at less than one per cent. Usman Farooqui. the NAB gets the powers to take record into custody and make arrests of alleged persons. 12 companies up to two per cent and another nine companies up to four per cent. Chairman Al-Jehad Trust. the four per cent target for UFG to be achieved in 2011-12 `is reasonable and provides more than sufficient allowance to cater for peculiar local operating conditions.determination had reported in detail the findings of the UFG study. A petition is also being heard in the Sindh High Court against these appointments. established by the Sindh Assembly. in 2008. National Savings Director General. He remarked that her eligibility as an adviser in the provincial cabinet should be reviewed as those who got relief under the NRO were no longer entitled for such benefits now. there has been no audit of the institution during last 30 years allegedly in an attempt to conceal fraud of billions of rupees. then her case was a continuation of the NRO issue.5 billion by the Sindh government last year. Khairi had made the federation. in violation of rules and regulations. DGAS/PPC\SESSI 2011-12 that SESSI officers are avoiding audit of the institution. The Supreme Court admitted a petition for regular hearing against Sharmila Farooqui‘s eligibility as an adviser to the Sindh chief minister as well as member of the provincial cabinet. his sons and different directors of the company. According to sources. The accused got into a written agreement with the said company to import scrap of ships from Ghana. Aneesa Farooqui.7 per cent. Haji Abdul Hameed. the Sindh government provided funds to the institution worth billions of rupees about which reports of embezzlement and mismanagement have come up. According to sources. The OGDCL management has issued LOI of $800 million to M/s Zishan Engineers (Private) Limited (ZEL) for developing three projects. In the meanwhile. a senior functionary of the OGDC told The News. without seeking the reply of grievance committee of the company for pre-qualification of the ZEL for the multi-million dollar contract. Hamoodur Rehman told this correspondent that Rasool kept talking to the prime minister on the phone during a one-hour stroll at the PM House. But the FIA did not act against Khurram Rasool even after one-and-a-half years. M/s ZEL was pre-qualified by the OGDCL to submit the bid against the tender enquiry of KPDTAY project. 24. after which the interior minister forwarded the application to the FIA with his reference. Altaf. In the meantime. Karachi. When FIA Deputy Director Altaf was contacted. he said investigations against Khurram Rasool were in their preliminary stage but it looked the accused was already in deep trouble. Haji Abdul Hameed and the directors of his company have also filed a case against Bank Islami and Maersk in the Sindh High Court in which they have requested the court to order the accused to pay their money back. and that the Federal Investigation Agency or any other department could not act against him.30 million at Bank Islami.49. including KunarPisakhi-Deep.72 billion) for project management consultancy services of three projects to a company without fulfilling the basic eligibility criteria. The media coordinator to the PM kept demanding money from them on one pretext or the other and they sent him the cash through the Western Union. who is looking after the company on ad hoc basis for the past six months. The three projects will altogether add about 500 MMSCFD gas. which will significantly reduce the current energy crises of the country but these have again been endangered by the OGDCL management by awarding the projects to a non-deserving private party. who is also a member of the chamber. oaths. the accused also made Haji Abdul Hameed pay money to his friends and business partners.pressurize him so that the business house would not proceed with litigation against him. making them believe he was a close friend of the premier. Karachi Chamber of Commerce and Industry (KCCI) caretaker President Muhammad Saeed Shafique also wrote letters to Interior Minister Rehman Malik and FIA Deputy Director. Khurram Rasool kept ensuring the victims that he was an honest person and would return their money. Haji Abdul Hameed told this correspondent that the accused opened an LC for Rs. M/s ZEL was not eligible as it does not have the required experience of completing five projects of similar size because allegedly M/s ZEL has not completed a single project of commercial value of over $0. 2008. Kharadar branch. the complainants continuously tried to put moral pressure on Rasool to pay the amount after all his agreements. Mirza said.‖ To a question of grievances for eligibility criteria of M/s ZEL filed by the other bidder for this project. Haji Abdul Hameed. senior member KCCI Siraj Qasim Teli also met Rehman Malik in person and informed him about the details of the fraud. and checks were dishonored. ―The reply of the grievances committee of the company is not mandatory for awarding the LoI to the lowest bidder. receipts of which are available with this correspondent. The OGDCL re-tendered this KPD-TAY without returning the technical and commercial bids to ENAR — the other bidder in the tender — to accommodate the said private party. the official added.000 bbls/day oil and about 500 metric tons/day LPG in the production. promises.‖ Mirza further claimed that the losing bidder‘s bid was nearly 100 16 .72 billion oil scam in making The Oil & Gas Development Company Limited (OGDCL) has awarded a Letter of Intent (LOI) of $800 million (Rs. FIA‘s Inspector Nabeel Mehmood called the victims and told them that a case could not be initiated against the accused on the basis of mere claims and refused to register an FIR. After a few days. demanding action against the accused. on May 30. ―There is no PPRA rules violation and M/s ZEL was the lowest bidder.458 million from the victim. Neshpa and Mela. the scrap was sold off from the godowns of Maersk shipping company. Believing this. told this correspondent. and informed them about the details of the fraud. 2008 and December 1. to import scrap from Ghana and made three shipments from the African country to Karachi on November 17. KhurramRasool conned Rs. it was still blessed with the lucrative LOI. Acting Managing Director OGDCL. it was learnt. However. 2010 on behalf of the victim.5 million. instead of delivering. But surprisingly. feared an official of the petroleum ministry who spoke on condition of anonymity. while the accused stayed put in Ghana during this period. 2008. According to OGDCL‘s criteria. November 27. the official said. Haji Abdul Hameed sent his business partners to Ghana. Another Rs. who met Khurram Rasool in his business office there. Basharat Mirza. 300 billion The power sector is losing a whopping Rs. Swiss courts have expanded investigations into frozen Tunisian and Egyptian assets. said a letter of the ENAR to Director FIA and exclusively available with The News. The team of M/s ZEL comprises three ex-management officials of ENAR. It did not name the countries to which money had been returned however. was filed against these individuals. Managing Director of M/s ZEL. amid suspicions that a crime syndicate may be linked to them.18. which was annulled more than three times by the OGDCL management. on gas Rs. Syed Atiq-uddin Shah. but the OGDCL grievance committee called the aggrieved management for a meeting on January 23. M/s ZEL and that is the main reasons that the management had decided to award the contract to the lowest bidders.3. The system suffered a huge loss of Rs. would produce 400 MMSCRFD gas. Pervaiz Rizvi and Sajid Pervaiz have been shown as ZEL employees whereas they are already employees of ENAR Petroleum Refining Facility (EPRF).‖ a spokeswoman for the Attorney General‘s office. 4. Similarly. Switzerland revealed the figures during a meeting of international experts on Monday and Tuesday in Lausanne that focused on the recovery of illicit assets held by autocratic leaders in countries where regime changes occurred.42 per unit and electricity from Iran costs Rs.9 per unit. 1.7 billion Swiss francs (1. A case with FIA. Responding to various queries by The News. He further apprehended that the OGDCL management would compensate the awardee bidders by making changes through ―variation order. told media. the OGDCL had arranged a kick-off meeting on the same day with M/s ZEL for issuing the LOI of the said projects. misuse of power and illegal acts by forming a trust. Electric power distribution companies (Discos) suffered Rs. Meanwhile.83 billion) in illicitly placed assets to countries involved in the Arab Spring regime changes. the government is left with no option but to provide over Rs300 billion tariff differential subsidy as NEPRA has determined the new base tariff of all electric power distribution companies at Rs. whereas the Neshpa will produce 45 MMSCFD gas. ―There is no irregularity in the bidding process‖ and then cut off the call. The NEPRA chairman said the new base tariff was determined keeping in view the massive increase in generation 17 . Karachi.200 bbl/day oil and 40 metric tonnes/day LPG. He said the cost of one electricity unit based on RFO (residual furnace oil) stands at Rs.35 billion losses due to power theft. ―The return of illicit assets is a key component of the system set up by Switzerland to protect its financial sector and to fight against international financial crime. Mela has the capacity of producing 20 MMSCFD gas. these executives have allegedly been involved in malpractices. ―In addition to the suspicion of money laundering.103 billion per annum on account of power theft and nonrecovery of bills.9-10 per unit. Meanwhile. spokesman of the losing bidder also claimed that they (M/s ENAR) had offered 50% lowest bid but they were knocked out on ―technical basis‖ from the bid. The KPD-Tando Allah Yar project. Mahmood Ali Ahmad.41 billion Euros. Works and Services‖ of PPRA. The seminar included experts from international aid organizations in 15 countries.500 bbl/day oil and 400 metric tonnes of LPG per day. However.8 billion to Arab states Switzerland said Tuesday it has returned nearly 1. on high-speed diesel Rs.11. the amount rises to Rs.40 billion.‖ the foreign affairs ministry said in a statement. Switzerland returns former rulers‟ $1.21-22 per unit. Instead of announcing the result to ENAR‘s representatives. the other bidder sought rebuttal from grievance committee of OGDCL pointing out grass-root violation in the pre-qualifying of M/s ZEL. This disclosure was made during the special energy committee meeting of the National Assembly held here on Tuesday. NEPRA Chairman Khalid Saeed told the meeting participants. alleged the official of the other bidder of this multi-million dollar project. only said. change order or amendment in the final MOU‖. hydrogenation at 1.percent more than the awardee i. incurring a huge loss to the ENAR.70 per unit. As per PPRA rule 48 & SOP 46 of ―Manual of Procurement Policies and Standard Bidding Documents for Goods.e.‖ investigators are probing the possible involvement of a ―criminal organization.63 billion in 2010-11 as bills recovery stood at 89 percent with 11 percent losses.92 per unit from Rs. 7.1. $1. 2012.826 per unit due to which the gap between the newly determined tariff and applicable tariff has risen to Rs. Tariff differential subsidy to cost over Rs. And nuclear generation cost stands at Rs. If power theft in the Fata areas is also included. Jeannette Balmer. an attached department of the Ministry of Production.5-6 per unit.500 bbl/day oil and 20 metric tonnes/day LPG. 5 billion The unwarranted delay by the Trading Corporation of Pakistan (TCP) in the release of Rs. the field officers of the Federal Board of Revenue have negated the spirit of the Universal Self Assessment Scheme as envisaged under the Income Tax Ordinance 2001 and STA 1990 by selecting cases of a single taxpayer repeatedly for a number of years. which was later allowed. ―The field officers are also misusing the powers under the Income Tax Ordinance provision to penalize the taxpayers for their vested interests against the spirit of the law. KTBA.17.cost because of a surge in the price of furnace oil to Rs. But consumers who consume 700 units or more are paying the full cost and even paying beyond the marginal cost. 2001 by the officials of the Federal Board of Revenue (FBR).000 per ton. but agriculture consumers are being provided subsidy. President. The NEPRA chairman also told the meeting that the regulator had also proposed erasing of slab benefits of consumers who consume 1.000 units in one month. Saeed said High Speed Diesel is more expensive than furnace oil. Talking to Dawn on Monday. FTO moved against discretionary powers of tax authorities A tax consultant body has moved the office of the Federal Tax Ombudsman (FTO) against tax authorities for misusing powers for selection of cases for audit. the KTBA had urged the Member Audit. than it should not be selected for audit for the next two years from the tax year in which the last audit was conducted and concluded and no significant discrepancy is unearthed during the course of audit. This was also the reason for the recent inflated bills.‖ the FBR was informed. ―Unfortunately. Earlier.45. Millers flay TCP for delaying Rs. saying that if the taxpayer‘s case is selected for audit. It suggested that the cases for audit should be selected only for tax year 2011 as the best practices of tax audit in the world. `What codal formalities are the TCP officials talking about? They are using this excuse just to delay our 18 . ―We are cautioning that the field formations through repeated audits. to intervene into the issue. the same is always conducted for the current year and there is no concept of audit of previous years until there is discrepancy or concealment is detected during the course of audit related to the previous years.‖ it added. The KTBA had urged the FBR to evaluate the results of the previous audits and their fate in appeals. The tax body had forwarded several recommendations regarding the audit.000 per ton from Rs. FBR.‖ it added. in the letter mentioned that the association had sent several letters to the revenue body regarding misusing of powers in case of the audit and multiple tax years selection of single taxpayer for audit with no reason. The tax body urged the FTO for immediate action to save the taxpayers from misusing of discretionary powers of the tax authorities for their vested interests. He said commercial and industrial consumers are paying the full generation cost of electricity.‖ the KTBA said. July on end consumers was earlier banned by the court.65.5 billion as price of 378. ―Repeated selection of cases for audit has resulted in widening the bridge between the taxpayer and the tax department.000 tons of sugar it has procured locally is creating liquidity problem for the mills and jeopardizing payments to growers. but it is also equally important that the same should be strictly in accordance with the provisions of the law under the income and sales tax. The KTBA said that the tax reform process of creating trust is being badly damaged by senseless audits. multiple notices are destroying the tax reforms and as such seriously damaging the goals of the FBR in increasing the tax-to-GDP ratio. He said that passing of monthly fuel oil price of June. Anwar Kashif Mumtaz. The millers allege that the TCP is holding back their payments on frivolous excuses of completing `codal formalities`. Pakistan Sugar Mills Association (PSMA) Chairman Javed Kayani rejected the TCP`s stand that it was completing codal formalities and would release the payment only after completion of the process. The body had said that the audit of the taxpayer is important. The Karachi Tax Bar Association (KTBA) on Monday sent a letter to the FTO Secretariat to redress the taxpayers‘ grievances regarding selection of audit under Section 122(5A) of the Income Tax Ordinance.17. saying `some people at the helm of the affairs in the TCP were trying to delay the release of payments for personal gain` They say the TCP was delaying their payments for more than three weeks despite calls from them for an early release. He said that 100 units slab consumers are highly subsidized while those who consume up to 300 units are also substantially subsidized. did not ask any supplementary question.5 billion allocated by Sindh for the reconstruction of houses damaged or destroyed in the 2010 floods. Mr.15 billion it has received from the Central Zakat Fund in addition to the Rs. The session started soon after the Zuhar azan was sounded at around 1pm.000 tons of sugar and is expected to procure up to 625. The Sindh Zakat Council was working out modalities for the construction of houses.payments for reasons known only to them. Dawn made several attempts to reach TCP Chairman Syed Tahir Raza Naqvi for his views on the issue but he was not available. Jokhio in a written answer said the central Zakat council had provided Rs1. struggling to answer supplementary questions during the question hour of the Sindh Assembly session. Rs. When the question hour. He said Pakistan produced the best quality sugar in the world.3. adding he had sent a letter to the finance minister to apprise him of the delays and its impact on the growers and the industry. A large number of them were busy at a meeting being presided over by the chief minister to discuss a resolution of the NPP`s Masroor Jatoi relating to a proposed amendment to the constitution about the creation of new provinces.1-1. and to let another Jatoi`s resolution to be taken up. Mr.65 billion for 2010 flood victims yet to be spent The Sindh government has not yet spent even a single penny from the Rs. who wanted to know the cause of the delay saying the floods had occurred in 2010 and no house had been built even in 2012. either destroyed or damaged the 19 .2. The whole question hour was completed in 10 to 15 minutes. Arif Jatoi of the NPP.000 tons of sugar from the current harvest. seeing the minister utterly confused.1.Jokhio. rose in his seat in aid of his cabinet member.250 billion to the rural economy this year. Mr Kayani said the TCP officials took no time in awarding contracts and opening LCs without fulfilling codal formalities when low quality sugar was to be imported. `Why? We do not understand. The TCP has procured sugar from the mills in line with a decision taken by the Economic Coordination Committee (ECC) in December to create a strategic buffer stock to enable the government to maintain its ability to stabilize the market in case the product`s prices rise. five initial questions were not taken up as the movers the MQM`s MoinPeerzada and Heer Ismail Soho were not present in the assembly and no one else wanted to ask the question on their behalf. Monday`s session began more than three hours behind schedule as only a few members had arrived in the assembly hall.2 million tons from the current harvest`s output projected to be over five million tons and facilitate the millers make early payments to growers for their crop. said Sindh Zakat and Ushr Minister SajidJokhio on Monday. Have they found any virus in our sugar this time that is holding the TCP from making our payments? `He asked. apparently conscious of the three-hour lost time. who had asked one of the questions taken up. who was present in the house for some other business.000 tons sugar. `he said. Another objective of the local procurement was to lift a part of the expected surplus of 1. He said as a large number of people had lost their homes.000 tons of sugar. which was related to the Zakat and Ushr Department. looked completely out of his depth as he fumbled through a bunch of papers placed before him but did not offer any satisfactory answer until the chief minister.000 tons. It is for the first time that such a long delay has been caused in the release of payments to the millers. particularly on the right bank of the Indus. Chief Minister Syed Qaim Ali Shah. the industry would still be left with around 400.15 billion for the flood affected and that the government of Sindh had been planning to use the amount on the construction of houses for flood affected families in the province. where daily the entire question hour is consumed by three to four questions and never all questions mentioned in the order of the day could be answered. `The ultimate sufferers will be growers whose payments will be delayed due to the TCP`s attitude. He said the TCP officials told him that some results of the tests from the PSQCA had been received and the rest were awaited. an unusual happening in the house. `The so-called codal formalities usually take only a few days to complete. but were taking their time in making payments against the purchase of good quality sugar. He said even after the government`s expected procurement of 700.000-500. did begin. Responding to a question asked by Nusrat Seher Abbasi of the PML-F about the funds provided for the rehabilitation of flood victims and construction of houses for them. came to his rescue and said the unprecedented floods in 2010 had caused colossal damage. The PSMA chairman also urged the government to allow the industry to export up to 500. `he said. The ECC has also decided to purchase another 100. The current crop is estimated to transfer Rs. He had no answer to a supplementary question asked by Ms Abbasi. 90 billion electricity losses The Water and Power Development Authority (WAPDA) has held the board of directors of power distribution companies responsible for failing to improve the distribution system. asking the flood victims to be patient.000 plots by the Capital Development Authority (CDA) has caused a loss of billions of rupees to the national exchequer. report adds.15 billion was received from the central Zakat fund. FBR officials involved in Rs.2. Ramzan Chaudhry. Transmission issues: Power companies blamed for Rs. There should be no political and administrative interferences in Discos.1.74 per unit cost of electricity by public sector thermal plants. To handle the issue in a transparent manner.11 billion per year.6 billion annually in transmission. Poor maintenance by former WAPDA operated power generation companies are producing almost 6 billion less units per annum than the optimum level. Staff report.9. more than the normal standards.1. a committee had been formed which would address the issue. during hearing of a suo motu notice. „Illegal allotment by CDA caused losses of billions‟ Chief Justice Iftikhar Muhammad Chaudhry on Monday remarked. These are the real reasons of existing circular debt which has paralyzed the national economy and made life difficult for the common man. generation companies are burning additional fuel worth Rs. a cost that can be saved if optimum efficiency level is obtained. He was heading a three-member bench also comprising Justice Khilji Arif Hussain and Justice Tariq Parvez. says the report. In year 2010-11. In a report submitted to the energy committee formed by the prime minister. WAPDA also noted that the energy generation mix was equally divided 50-50 between thermal and hydel but in 2010 hydel‘s share dropped to 32 per cent while share of thermal generation increased to 68 per cent. Owing to dismal efficiency level.90 billion annually in the distribution system. he added.government had planned to build houses for them.31 per unit cost of power by rental power plants. but the money had not yet been provided to Sindh yet. which is incurring losses of more than Rs90 billion annually and spiraling the circular debt to record levels. These companies are not even managing to post a revenues of Rs. The step was taken to ensure transparency and to preempt allegations of nepotism and favoritism. He said the federal government had also promised to provide funds for the houses. It also proposed to lease out inefficient feeders of power distribution companies to ensure better bill collection and delivery of services. The chief justice responded by saying that no such policy existed. Quetta Electric Supply Company and Multan Electric Supply Company collectively are losing power worth Rs. He said that keeping in view the number of people affected and houses destroyed.03 per unit. says the report. WAPDA recommends that provincial government representatives should be included on the boards of power distribution companies to share the responsibility and be administratively more involved in controlling line losses along with improving revenue recovery.5 billion for the houses and when Rs. Hyderabad Electric Supply Company. Representing CDA. He said Sindh also had Rs. WAPDA further suggested that keeping in mind that tariffs are already at a high level.1. WAPDA says that the basic issue of majority power distribution companies (Discos) is poor governance and limited accountability.8. Rs.07 per unit by Independent Power Producers and Rs.6 billion tax fraud cases 20 .54 per unit. Rs. WAPDA‘s hydel power is the worst affected due to inefficiencies of power distribution companies and getting collecting merely 55 per cent of its billed amount even after selling it at Rs. a copy of which is available with The Express Tribune. report adds. that illegal allotment of over 4.90 billion in a year. the report says. adding that the CDA should refer the issue to parliament for promulgation of a new law on plots‘ allotment. said that employees had been allotted 20 percent quota under the government‘s 1993 land policy. the Sindh government also added its share to the amount for the purpose. According to the report. the revenue gap should be covered through improving inefficiencies. The CM agreed that around a couple of years had passed since the floods hit the province and. Power generation companies should be leased out or listed on stock exchanges and its industrial consumption should be preferred. Peshawar Electric Supply Company. The National Transmission and Dispatch Company (NTDC) is losing power worth Rs. it would not be possible to build houses for all the affected. hydel power cost in public sector was Rs. He remarked: `Rome was not built in one day`. said that soon the houses would be constructed and handed over to affected people. 1. Action was taken only in one case but that too was reversed within one week following the change of Regional Commissioner Karachi-III. Defense Minister Ahmed Mukhtar informed lawmakers in his written reply submitted to the Senate on Friday that ―PIA suffered Rs. Crashing figures: PIA loses over Rs. who investigated one such case.300.140 million into the account of his son during the period when he was investigating this particular case. The FBR also detected over Rs.000 as compensation to heirs of each deceased pilgrim in phases and the process will hopefully be completed by February 10. 2011.‖ Jamiat Ulema-e-Islam Senator Ismail Buledi and Pakistan Muslim League-Q Senator Begum Najma Hameed questioned why the national flag 21 . causing Rs. 2011. When Member Inland Revenue Service Shahid Hussain Asad was asked why no action was taken against the officials involved in these fraud cases he said that an inquiry would be conducted in such cases and stern action would be taken against those found guilty.6 million have been distributed among 20 legal heirs of deceased Hujjaj on January 18. was allegedly himself found involved in getting favors. who died during the Haj-2011. In a telling development.‖ a top official of the FBR disclosed while talking to The News here on Sunday. checks amounting to Rs.000 cases. he added.676 per day. But when Chief Commissioner Inland Revenue Service (IRS) of Karachi-111 was changed the same suspended official was restored on December 14. The board had sent region-wise cases to all concerned authorities to pursue them in months ahead and come up with the exact loss to the national exchequer.300.000. who nominated in Haj forms. The ministry has collected around Rs. by February 10.‖ the sources added.874 billion loss to the national exchequer.200. who performed the religious obligation under the government and private schemes this year. Another scam surfaced wherein Rs. The News has learnt. also detected Rs. ―We have so far received tax of Rs.000 per day Pakistan International Airlines is suffering a loss of Rs. which suggest the airline has already lost Rs. Such cases were also discussed during the last commissioners‘ conference held a few days ago at the FBR‘s headquarters under the chairmanship of former chairman FBR Salman Siddique.71 million under the scheme from more than 179. The FBR.‖ added the official.000 notices to potential non-filers of whom over 60.000 for the current year. He clarified that the compensation would be applicable to all pilgrims whether they went under the government or private schemes.995 billion frauds in Federal Excise Duty where in two major cases the tax was not deposited fully by the beverages companies. which was collected but not deposited into the national kitty.47 million as compensation to heirs of 158 Hujjaj.2 billion refund fraud cases as well as those involving stuck up withholding tax amount.000 to Rs. the sources said.‖ the joint secretary (Haj) of the ministry told APP.000 pilgrims.70. To a question.19 million losses over the last 273 days.400 million bogus refunds were issued and an official of the Enforcement Wing was suspended on December 7.1. committed through collusion of unscrupulous elements and corrupt tax authorities. 158 Pakistani pilgrims have died in Saudi Arabia due to natural causes. who retired on January 21.47 million to be paid to heirs of deceased Hajis The Ministry of Religious Affairs will pay more than Rs. In the first phase.The Federal Board of Revenue (FBR) has detected tax fraud cases of over Rs. Out of these. ―The ministry is paying Rs.200. The worrying figures are in keeping with recent reports.110 billion over the past three years. an official of Karachi Custom Intelligence.70.6 billion. He said that Prime Minister Yusuf Raza Gilani on the recommendation of the ministry has increased the compensation amount from Rs. ―We have identified the culprits and law will take its course.665 million from these persons who have now become taxpayers. The case came under discussion in the last Commissioners‘ conference and evidence was also handed over to the concerned authorities against the officers involved in these cases but no action was taken against them. The FBR‘s directorate intelligence and investigation has found that SRO 775 was misapplied in 7. 2012. Rs. ―But the FBR has so far taken no action against the officials involved in these cases. Sources disclosed that the FBR has so far sent 300. the amount of compensation was Rs.000 have filed their returns. It was discovered that the persons and companies allegedly involved in this case transferred Rs. Under the Haj Policy 2011. he said that claim forms are being received from heirs of deceased Hujjaj under the procedure adopted to ensure smooth and transparent disbursement. after fulfilling all the codal formalities. replying to questions posed by lawmakers during the question and answer session in parliament. Earlier.30 Percent. Zardari gained the reputation of demanding a certain percent of government contracts issued to business people. this is how the Basel Institute of Governance describes the eminent Pakistani couple: ―A consummate politician.5 billion from the national coffers. awarding of broadcast licenses. worth Rs.100 Percent. aircraft engineers and specialized professionals. observed Senator Najma Hameed.1. said the minister. including: rice export deals. with 1.5 billion. However.‖ wrote Mukhtar in reply to this point. The highest amount. She returned to Pakistan in October 2007 after reaching an understanding with President Pervez Musharraf by which she was granted amnesty and all corruption charges were withdrawn. Mr.16 billion has been allocated for the Pakistan Space and Upper Atmosphere Research Commission (SUPARCO) in the current fiscal year (2011-12) budget.‖ he said. Between 1998 and 2007 Bhutto lived in exile from Pakistan in Dubai and London. which claims to act as facilitator. the sell-off of state land. ―We are looking to the government for help. The number of people hired by the incumbent government is the highest in the history of the national flag carrier. however it is a fact that the airline is in a sorry state of affairs. will be spent on the Pakistan Communication Satellite System. including other facilities.‖ acknowledged the minister.5 Percent. Despite the crippling losses.‖ The Swiss institute further writes: ―This sum allegedly came from illicit profits through kickbacks in every sphere of government activity. The defense minister also disclosed that over Rs.‖ he added. Former directors and other board members are entitled to 12 tickets in economy and business plus.179 employed in 2010 alone. A memorandum of understanding has been signed between SUPARCO and the Institute of Remote Sensing Applications for scientific cooperation on the operational use of remote sensing technology in the fields of agriculture.‖ The institute had cited references 22 . Zardari is alleged to have masterminded various corruption related activities involving millions of dollars with Bhutto‘s knowledge. privatization of state-owned industries and rake-offs from state welfare schemes. Lawmakers were also informed during the course of proceedings that seven out of 26 airports were closed down due to the suspension of PIA flight operations on account of insufficient traffic load. He served as Minister of Investment from 1993 to 1996. France.20 Percent. has revealed that only $100 million of the $1. oil and gas permits.2.171 people were recruited by PIA. Mr. the written reply stated.5 billion of Pakistan looted: Swiss institute According to the International Centre for Asset Recovery of the Basel Institute on Governance in Switzerland. Benazir Bhutto political life was ended with her assassinated on December 27. sugar mills. PIA employees – both retired and serving – enjoy free travel in Pakistan as well as abroad. he maintained that there would be no reduction of manpower in operational staff such as pilots. $1. thereby earning a succession of nicknames: Mr. ―PIA is not on brink of collapse. Benazir Bhutto was twice appointed Prime Minister of Pakistan (1988-1990 and 1993-1996). Mr. This Switzerland-based institute.5 billion. Some estimates place Bhutto-Zardari loot at more than $1. ―Neither PIA nor any other airline is interested in conducting flight operations from the closed airports. However. coach and legal representative in international asset recovery cases and supports countries in implementing the provisions of Chapter V on asset recovery of the United Nations Convention against Corruption. Asked why PIA was incurring losses despite growing domestic air traffic. Her husband Asif Ali Zardari (now the current President of Pakistan) also played a prominent role in both administrations. Bhutto-Zardari accumulated assets worth over $100 million in the United Kingdom.‖ Giving introduction of Asif Zardari and Benazir.carrier had faced such turbulence for so long.5 billion plundered by the sitting Pakistani president and his late premier wife has so far been traced. In total. Mukhtar said that high fuel costs were a factor. President Asif Zardari and his late spouse Benazir Bhutto were allegedly involved in looting $1. which assists developing countries in making use of international legal assistance to recover their stolen assets. Switzerland.10 Percent. water resources and disaster risk assessment. purchase of planes for Pakistan International Airlines. On both occasions she was dismissed from office for alleged corruption and misrule or bad governance. he said. ―A paradigm shift is needed in PIA. The Civil Aviation Authority (CAA) will consider proposals to make flights operational from the closed airports. It further writes on its website: ―During Bhutto‘s terms as Prime Minister. the ministry of defense revealed that over the past three years 2. the United States of America and the British Virgin Islands (BVI). before the national airline edges closer to the verge of collapse like Pakistan Railways. and Mr. 2007. Ferdinand Marcos (former rulers of Philippines). The contributions offer a diversity of views on roles.12 billion a month or Rs.285 billion by the end of June last year. Arrears of 23 .45. which non-state actors can play in preventing and combating corruption and other forms of financial crimes.60 billion arrears from the private sector and government departments during the first five months of the current fiscal year. DiepreyeAlamieyeseigha (a Nigerian Governor). freeze orders. Daniel arapMoi (Kenyan dictator). the United Nations Office on Drug and Crime.345 billion by the end of November Rs. Tommy Suharto (son of former Indonesian ruler Suharto).of John F. but were able to recover only Rs. Transparency International.271 billion. the United Nations Development Program. It has also invited ‗affected states‖ to submit information on ongoing and past recovery cases for inclusion under country specific headings. The United Kingdom Department for International Development.‖ This book contains essays presented at the meeting.400 million a day. the Council of Europe. Raul Salinas (brother of the former President of Mexico). The paragraph. the Stolen Asset Recovery Initiative of the World Bank and United Nations. Bhutto clan leaves trail of corruption‖ that had appeared in the New York Times and also made use of material in BBC‘s obituary story on Benazir Bhutto and Raymond W Baker‘s 2005 book ―Capitalism‘s Achilles Heel: Dirty money and how to renew the free-market system. which would soon be made available on its website with convenient links to relevant judicial. According to PEPCO`s own figures.25 billion as subsidy from the federal government during the July-Nov period and another Rs. This Swiss institute under review says it is compiling case studies on small and large precedent-setting recovery proceedings. General SaniAbacha (former Nigerian dictator) and Vladimiro Lenin Montesinos (ex-head of Peru‘s secret service under President Alberto Fujimori) etc. The institute maintains on its website: ―As the amount of case information in this section grows. Frederick Chiluba (former Zambian President). The corrupt international rulers/government officials discussed on the website of the Basel Institute of Governance are: Hosni Mubarak (recently deposed Egyptian dictator). etc. read: ―Non-state actors are of fundamental importance in the prevention and combating of corruption within asset recovery processes.331 billion to different consumers during the first five months of the current fiscal year. which comprise asset recovery processes. Jacob Zuma (President of South Africa). ShriSukh Ram (former Indian Union State Minister for Communications). jumped to Rs.25 billion is almost equal to the arrears accumulated during the period. PavelIvanovichLazarenko (former Prime Minister of Ukraine). its receivables. For the sake of knowledge. Jean-Claude ―Baby Doc‖ Duvalier (defamed ruler of Haiti).12 billion in December. which stood at Rs. Omar Bongo (former President of Gabon).‖ However. the International Ant-Corruption Academy. State Secretariat for Economic Affairs of Switzerland. many of which are still stashed in off-shore havens like Switzerland.60 billion arrears The Pakistan Electric Power Company (PEPCO) has failed to recover a staggering Rs. which is bound to raise many an eye-brow. Burns 1998 article ―House of graft: tracing the Bhutto millions — a special report. Nine distribution companies (Discos) of PEPCO billed Rs. Joshua ChibiDariye (a former Nigerian Governor). the Organization for Economic Cooperation and Development (OECD). Their roles and responsibilities were considered during an experts‘ meeting hosted by the Basel Institute in September 2010. a lot of details about two dozen corrupt global rulers and key government functionaries are already available with facts pertaining to the efforts being made by the ruling regimes of the robbed countries to ensure the repatriation of their stolen assets. written by practitioners and academics with extensive experiences in the numerous fields. Arafat Rahman Koko (son of former Bangladeshi Premier Khalida Zia). Pepco fails to recover Rs. Interestingly. Zine El Abidine Ben Ali (former Tunisian dictator). raising further the power sector`s receivables and circular debt.‖ It is pertinent to note that the key partners of the International Centre for Asset Recovery of the Basel Institute on Governance in Switzerland include the International Monetary Fund. criminal or civil. The Basel Institute of Governance website also carries an interesting introductory paragraph about one of the books ―Non-state actors in assets recovery‖ that has been published under its auspices. PEPCO received Rs. the European Bank for Reconstruction and Development.57. Swiss National Science Foundation and the University of Basel (Switzerland) etc. the Swiss Agency for Development and Cooperation. legislative and executive documents. the Centre will index and cross-reference the volume of material by key features such as jurisdiction. The total subsidy of Rs. 000 per month plus 140. it added. The report also elaborates that the approval is not limited to concept clearance but also authorizes expenditures.67 billion. indicating a share of 21 percent in the overall allocation of PSDP size. followed by Azad Kashmir with Rs.000 facility in case of visiting Islamabad any time.000 and 200.9.37 billion arrears.11 billion to Rs. stating that in some instances. `The figures reflect the reality of power sector which has become a rudderless ship over the past few months.142.3per unit -an average increase of almost 30 per cent. MNAs enjoyed Rs.142 billion to Rs. Therefore. the anticipatory approval circumvents the approval and sanctioning process. An analysis on Public Sector Development Program (PSDP) stated that the method of anticipatory approval was used to utilize money on development projects executed on directives of President and Prime Minister.000 for office expenditure. Its arrears increased by Rs. These projects were undertaking by the government without even waiting for the approval from relevant forums. He said all of them jointly. Rules abused in funding Rs.7 billion for un-funded important projects. This contravenes principles of fiscal responsibility and good governance. on top of this.95 billion from Rs. `No-one knows who is running the sector? Officially.856 billion. In addition they were allowed free medical facilities and Rs. each MNA elected by the poor masses had drawn a monthly salary of Rs. The members not at all needed some of the perks given. it should be the water and power ministry. a copy of the yet un-released report available with The News.50 billion while employing the method of anticipatory approval to accommodate directives of president and prime minister.government departments increased during the period from Rs.242 billion. In addition during legislation each member had drawn another 100. according to the report. He was also granted unlimited railway tickets in first class air-conditioned along with wife and children and 40 air tickets.6.50 billion projects The government undertook politically motivated development projects worth Rs. sponsoring agencies by-pass established procedures through what is euphemistically referred to as anticipatory approval.13 billion and non-funded projects with exact amount of Rs.000. A review report prepared by the renowned economist Dr. PEPCO tariff was raised by Rs. out of the total PSDP of Rs. dissolved PEPCO but it still existed and no-one knew what kind of relationship the company had with distribution companies. According to the Cabinet Division. which have not been budgeted for thus skewing 24 . an official report available with The News disclosed. The Karachi Electric Supply Company remained the biggest defaulter.88 billion. It is recommended that this process should be discarded. On the contrary under the current situation plans are being made to extend some more attractive concessions to the MNAs. there is a separate box titled By-Passing Standard Operating Procedures.40.120 billion perks in four years Members of the National Assembly have secured perks worth Rs.644 billion to Rs. goes on to point out that. and officially.50 billion allocations were slated for politically motivated projects. but practically the finance ministry is running the show because of huge subsidies involved. The report states that the Planning Commission (PC) itself encourages this mechanism and has formalized the process through a Performa for such requests for both new and ongoing projects. Rs. local and international telephone calls worth millions of rupees were also allowed.51. the forms will no longer be required and may be abandoned the report further recommends.120 billion during the last four years and an equal amount was spent on the house and its staff. says a PEPCO official.89 billion. A former member (power) of WAPDA said seven of the nine distribution companies were being run by officials working on an `acting charge basis. presumably in anticipation of directives from President and Prime Minister.10. unlimited residential facilities in different cities.2. In fiscal year 2010-11. free electricity and telephone up to 50. it further states. packages for different cities such as Multan Package and others Rs. The Federally Administered Tribal Areas was second on the list with Rs. Moreover mobile phone calls. are Peoples Works Program (PWP)-1 and PWP.93 billion and of private sector consumers from Rs. In this detailed review report of PSDP. The politically motivated programs.172.000 units respectively.171. According to the report. there is somewhat surprisingly inclusion of a provision of almost Rs.120. Hafeez A Pasha along with experts on directives of Planning Commission.48. It does not have the required expertise. During the first five months of the current fiscal. thus relegated the sector to the Planning Commission. Both types circumvent stated procedures. The project has four main components which are: establishment of a national targeting system. Sources told Dawn that the loan from the International Development Association (IDA). with co-accused Muhammad Munir.the allocations for development. fictitious guarantees and mortgage deals executed by fictitious persons. Rs.9 billion loan given to Harris Steel Mills – was reluctant to reveal the name of the political family behind the scam despite being pushed by the panel.9 billion from 2005 to 2007 using fake documentation. Bank of Punjab (BOP) President Naeemuddin Khan revealed that a ‗political family‘ was behind the Rs.2 grams and 14 gold and diamond watches. the soft window of the World Bank group. A salvage committee constituted by the apex court under Justice (Retd) Syed Jamshed Ali has so far been able to locate 24 locally seized vehicles.4 billion has been recovered through a plea bargain and voluntary return. According to the investigators. The Supreme Court took the suomotu notice of the case and got former Bank of Punjab president Hamesh extradited from the US. Ali Ijaz. This would be the second blow to Pervaiz – who is the senior minister for industries and defense – since his son Moonis Elahi is already accused in the multi-billion rupee scam in the National Insurance Corporation Limited (NICL).9 billion BOP loan scam Without naming. enhancing safety program management. strengthening safety net operations. a director of Haris Steel. accountability and evaluation and developing social protection policy and strategy monitoring. The BOP president claimed that Hamesh has claimed that Punjab Chief Minister Shahbaz Sharif has been pushing him to take Pervaiz‘s name but the investigators found his claim untrue. Additionally. It also states that yet another method for sanctioning projects is the special directives or those nominated by the legislators. gold bars weighing 5177. Moreover. The report also claims that directors Mughis Sheikh and Khuram Iftikhar were instrumental in the scam since both were rubber stamping ‗credit approvals‘ for the company via circulation. Hamesh had fled the country despite being named on the Exit Control List. the UK Department for International Development (DFID) will provide $95 million for the project. a change of lending instrument from a technical assistance loan to a specific investment loan to introduce result-based 25 . His sole reason for recommending Hamesh for the said job was that he liked him as a banker while he worked for the Kunjha Textile Mills in Gujrat which was owned by family of former Punjab chief minister Chaudhry Pervaiz Elahi‖. Abid Raza and Irfan Ali.9 billion loan scam — disclosing that the name was on page 306 of the BOP scandal report. is expected to be approved early next month. The BOP president — who was called by the Senate Standing Committee on Finance to give updates on the Rs. Politically motivated projects can be justified as long as they are well thought out. BISP seeks $150 million loan for poverty project The Benazir Income Support Program (BISP) is seeking about $150 million from the World Bank to set up an effective national safety net and foster human development of the poor in the long term. in connivance with Hamesh and other officials opened 23 ‗fake‘ accounts with forged national identity cards and obtained loans of approximately Rs. The new proposed funding will be an addition to the original credit amount of $60 million for the project which was approved in May 2009. Sheikh Afzal. and executed under a robust project governance model. The BOP report is based on the investigation carried out by the Punjab police additional inspector general on the directives of the apex court. Spotlight on Elahi in Rs. bogus collaterals. According to page 306 of the BOP report obtained by The Express Tribune: ―Kamran Rasool (the Punjab chief secretary during Pervez Musharraf‘s regime) was instrumental in the appointment of Hamesh Khan as the bank‘s managing director in the year 2003. The committee has directed the BOP management to recover the looted amount along with markup. such approvals subsequently create de facto situation when the formal request for approval is submitted. This practice needs to be curtailed the report recommended. aligned with Medium Term Development Framework (MTDF) and Medium Term Budgetary Framework (MTBF). The report further stated that all the firms used or established by Afzal – the main accused – were just facades for obtaining paper loans. In total. planned and monitored properly. changes in the component and its cost. the new funding will bring restructuring and entail changes in the project which include renaming of the project to reflect the expanded and restructured scope. However.2. 15 million per month. is planning to call a strike. The new funding will also support BISP in taking the pilots of technology-based payments to scale for enhanced transparency and accountability.110 million monthly. which involves IDA credit of $81 million and $53 million from DFID. everyone knows what the financial condition of PR is. which many feel is the reason for its greater efficiency. The IDA funding will support the expansion of the basic cash transfer program to eligible poor families and to introduce a co-responsibility cash transfer for BISP beneficiaries linked to primary education. but PRACS earns only about Rs. the World Bank says that the potential positive social effects of the project are expected to be significant. and to expand the focus of safety net operations to the introduction of a conditional cash transfer component. said that the loan installments will be around Rs.6. It will support the additional surveys needed to measure the impact of the conditional cash transfer and the expanded period of cash transfers and help to make public the results of the BISP evaluation for both future policy making and public information on results. With a small team of 800 officers and workers. up to a maximum of Rs. Bashir added that almost 90% of officials are worried about the future of PRACS and are planning to protest. The project design relies heavily on international experience as well as on work undertaken as part of the impact evaluation of a conditional cash transfer program pilot implemented by Pakistan Baitul Maal as well as findings from various analytical background papers prepared for the draft social safety net report currently under preparation by the World Bank and results of the impact evaluation of a conditional cash transfers pilot program implemented by Baitul Maal. will be expanded to build on progress made to date. which is an objective stemming from the country`s social protection strategy. and a co-responsibility transfer of Rs. assistant director PRACS. Pakistan Railways has already 26 . If PR refused to do this. The National Targeting System and Expanding Coverage of Basic renamed from the National Targeting System will add support for the expanded coverage of BISP`s basic income support program and will cover additional costs for data processing analysis. however. As the National Bank of Pakistan has agreed to provide Rs. Khalid Bashir. PRACS will rehabilitate and make records of all the spares purchased. Pakistan Railways Advisory and Consultancy Services (PRACS). as they think that PRACS does not have the resources to pay back the loan. We have to make sure that the credibility of PRACS will not be spoiled due to the agreement. Top officials fear that the step will default the profitable ancillary in no time. although Railways officials claimed the installments would be paid by PR finance division. the PR management is now working out how to spend the money.6.600 for three children in a specified age range.1billion loan It‘s a very happy new year for Pakistan Railways (PR). The PRACS management fears that the rehabilitation of locomotives will open a new door for corruption. Quraishi added.000 in continuation of the present income support. Most of these 800 officers and workers are working on a contract basis. is a profit-earning ancillary of PR thus it was decided by top PR officials to use the ancillary to take a loan. He said that. The management of PRACS. PRACS Managing Director Junaid Quraishi said that it was due to the goodwill of PRACS that PR was getting loan. With this package. The BISP intends to provide all beneficiary families with primary school children ages six to 12 years a benefit with two components: abase transfer of Rs. PRACS has been a profit-earning company. The initial plan was to buy 40 new locomotives from China.6. Quraishi said that things are not finalized but PRACS would only accept the loan once PR signed an agreement agreeing to repay the loan on time. as no-one will know about the exact numbers of spare parts that will be purchased to fix the engines. however. PR has tried in vain to take a loan from various banks and financial institutions. No-one has been willing to back the failing organization. PRACS.financing mechanism and extension of closing date till June 2016. the loan would never be accepted. He said it would be his duty to make sure that the funds were used for the repair of locomotives and not for other purposes.1 billion from a banking consortium through its ancillary. he added. Appraising the project. The strengthening of safety net operations.1. the BISP intends to counter the long-term poverty cycle and reduce beneficiary dependence on the income support program.1 billion loan to PRACS. Now the thinking is to use the loan to rehabilitate 96 locomotives currently lying off track. PRACS was established in 1976 and is currently run by retired and on-duty PR officers. though not everyone shares the mirth. The stateowned corporation has received a loan of Rs.200 per month for each child attending primary school. in marked contrast to PR. Railways rides on ancillary success to net Rs. under the Public Sector Development Program in December. which will also be spent on locomotives rehabilitation.received Rs. 27 .4 billion from the Planning Commission. No one in the PPP government is paying much attention to UFG. the â��unaccounted-for-gas (UFG) accumulates to an annual loss of over Rs. breaches of trust assets beyond known sources of income.30 billion or Rs. primarily initiate proceedings in offences covered under the provisions of National Accountability Ordinance 1999. According to a World Bank report. and are more environment friendly. As many as 164 references were disposed of with punishments awarded to the accused persons. NA told The National Assembly was informed on Monday that as many as 684 cases including 25 those of politicians were pending with the National Accountability Bureau (NAB). worth approximately Rs. 334 cases of government servants. The offences against which the NAB acts include accepting or offering gratification. The Express Tribune has learnt. There have also been reports that the Oil and Gas Regulatory Agency (OGRA). obtain pecuniary advantage through illegal means. willful default. 174 cases of business and 151 those of others. misuse of authority. the Law Minister Maula Bakhsh Chandio said that the NAB while pursuing its mandate. leaked or illegally sold to enrich private pockets at public expense. some four years ago UFG was one-third of what it is now. NAB recovered Rs. The CDA has awarded the LED lights contract. while adding that he had asked the CDA chief to revisit the award decision as transparent procedures were not observed. The total number now stands at around 3. TI Chairman Adil Gilani confirmed the development and said that TI is still investigating the project. According to the State Bank of Pakistan (SBP).8 billion for light bulbs The capital managers have decided to execute a multi-billion-rupee plan that has been panned by all and sundry within the Planning Commission and Transparency International (TI). the Bureau took up 871 inquiries and out of those 587 inquires were completed. according to the World Bank. Intriguingly. The suggestion seems to have fallen on deaf ears. In written reply to a question from Dr Muhammad Ayub Sheikh. around 65.5 billion for the two gas distribution companies). The Capital Development Authority (CDA) Chairman Farkhand Iqbal seems bent on getting the wheels turning on a Light-Emitting Diode (LED) project. Transparency International (TI) expressed concern over the opaque manner in which the contract was awarded. illegal connections and CNG stations (particularly the ones owned by parliamentarians).250 Crore a month. As many as 335 which were completed were pending for the last many years while 253 references against accused were filed in courts on completion of inquiries. in connivance with gas thieves.52 billion from culprits in the last three years. but have lower operational costs.000 conventional streetlights in the city will be replaced by LED lights. cheating members of public at large. the worst is yet to come as SBP fears gas crisis to worsen in 2016 when shortfall is expected to hit 3. The All Pakistan Textile Mills Association (APTMA) claims that it lost Rs.100 Crore in December because of gas and electricity outages.80 million gas stolen per day Pakistan has the largest number of CNG refueling stations in the world. has been aiding gas theft.Rs. He said that during this period. Stolen gas or UFG. longer life.9. For SNGPL and SSGC.2. The number is estimated at around 2 million vehicles.52 billion in three years. to a firm backed by an influential Islamabad-based businessman with close ties to the upper echelon of the ruling Pakistan Peoples‘ Party. The main culprits in Pakistan are gas theft. every month of the year. Blown fuses: Cash-strapped civic body to pay Rs. is a major contributor to the gas supply crisis and if the volume of lost gas could be channeled to power generation the furnace oil substitution value would be three times higher. Pakistan also has the highest number of CNG-powered vehicles-on-road. The minister said the 684 cases pending in the NAB include 25 cases of politicians. UFG in Organization for Economic Cooperation and Development (OECD) countries is typically 1-2 percent while the same at Pakistan two gas distribution companies has now risen to as high as 13 percent (every percent gas loss amounts to a loss of Rs. The other truth that Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) want to hide is that more than 500 million cubic feet of gas per day is stolen.8 billion.000. Under the project. which cost significantly more than normal lights.9.021 billion cubic feet per day with no big discoveries in sight. The project was also discussed by the 28 . tampered meters. the Law Minister said that NAB recovered Rs. To a question from Shireen Arshad Khan. both of which have been delayed due to the agency‘s inability to finance them. When The Express Tribune approached Faisal Butt. while adding that he had nothing to do with the project. which in turn led to his replacement with Farkhand Iqbal. The sources also said that Iqbal‘s name was forwarded by Faisal Sakhi Butt. He expressed the belief that the new Board would deliver in the best interest of the capital market adopting a coherent approach and discouraging any compartmentalization of the Board while benefiting from the extensive knowledge and expertise of individual members. He emphasized that the investors‘ interest should be supreme. Muhammad Ali. met the outgoing and newly constituted Board of Directors of the Karachi Stock Exchange on Thursday.Senate Committee on the Cabinet Division. Finance Minister appreciates SECP‟s initiative The Federal Minster for Finance upon invitation of the Securities and Exchange Commission of Pakistan (SECP) had a visit to the Karachi Stock Exchange. CDA Chairman Farkhand Iqbal did not answer his phone when contacted. While 29 .secp. The sources added that the. during a recent meeting. The sources believe that Iqbal‘s background in the Planning department could help get the project pushed through. In his address to the Board members he appreciated the valuable services rendered by the outgoing Board. which are bleeding in the red at the moment. he said the LED lights project is vital for the city based on donors‘ recommendations and the fact that the project would save the CDA 30 to 40 per cent on its power bills (around 18 megawatts) that could be used for other purposes. Another historic first may be connected with the deal. a post usually occupied by civil engineers.pk) SECP Chairman meets KSE Board of Directors The SECP Chairman. SECP. However. saying that his comments had previously been ―distorted‖ in the media. over and above members‘ interest and the management and Board are jointly responsible for the protection of investors. who is also in charge of the project. SECP News (www. Seminar on corporate compliance and eServices The SECP organized a seminar in collaboration with the Institute of Chartered Accountants of Pakistan (ICAP) at the ICAP House in Lahore. who was the senior chief of the Planning Commission‘s energy wing. It is the first time since the CDA was set up that an electrical engineer has been appointed member engineering. who touched on the governing statute for the companies and the SECP‘s role as an apex regulator of corporate sector and capital market. Mr. A senior CDA official said priority should be given to dozens of public-interest projects including new sector development and the replacement of water supply lines. The project will be financed by a loan from the Asian Development Bank. Haq would not comment on the project. Nazir Ahmed Shaheen. Nadeem ul Haq on the city‘s proposed energy system.gov. the chairman of the new Prime Minister‘s Task Force on CDA and a well connected member of the ruling party. The purpose of the seminar was to make practicing members of the ICAP more aware of the corporate compliance requirements in the wake of the modernization in corporate compliance culture for companies operating in the eServices regime. as CDA Electrical and Mechanical Director General Abrar Shah. and he would not be making any statements on the issue. Dr. CDA officials said the proposed loan would severely impact the already weak finances of the CDA. Executive Director (Corporatization & Compliance) Department. with Committee Chairman Shahid Hussain Bugti referring to the project as a ―scam in the offing‖. When approached for comment. but sources said that it has already been awarded to an international company. CDA officials would not confirm the final award of the project. Sources in the Planning Commission told The Express Tribune that former CDA Chairman Imtiaz Inayat Elahi could not ensure the early execution of the project. The keynote address regarding ‗Corporate Compliance & its importance‘ was given by Mr. was recently promoted to member engineering. Butt told The Express Tribune that he had only suggested Iqbal‘s name from a list of potential candidates and that the final decision was the prime minister‘s alone. CDA spokesperson Ramzan Sajid said that Iqbal was busy preparing a presentation for Planning Commission Deputy Chairman Dr. today. The Minster highlighted various financial and economic reforms undertaken by the Government of Pakistan over the last few years. This will enable them to tap into the large market which refrains from conventional insurance products considering them un-Islamic.appreciating the SECP‘s initiative for improving liquidity in the market. They will also be available on the SECP website. Now investment in associated companies can be made after prior approval of the SECP. The requirements for mandatory website have been approved after extensive consultation with both internal and external stakeholders. However. website of companies shall disclose maximum information comprising of comprehensive profile and contact details of the company and its management. financial facts. The following solutions have been agreed upon for a more balanced and investment friendly CGT approach. period. regarding allowing of investment in associated companies. This will help achieve the following objectives:- 30 . reports and symbol of the company. figures. Investments in associated undertakings – SECP approves regulations to ensure transparency The SECP has approved the Companies (Investment in Associated Companies or Associated Undertakings) Regulations. which will be published in the official Gazette of Pakistan to elicit public opinion. formulation of risk management and rating procedures by takaful operators. amended the said condition of license. It is expected that after the promulgation of the new rules. it has been observed that the condition was causing problems for transactions backed by genuine reasons. The said notification also details minimum information required to be disclosed on the website. SECP to consult public on new takaful rules The SECP has approved the draft Takaful Rules. 1984. These companies have a wide distribution network in the country. shall be required to maintain a functional website―an initiative aimed at providing investors with cost-effective. in its associated companies except with the prior approval of the Commission and subject to such conditions as it may deem fit to impose. amount of investment and terms and conditions attached to investment by a company in its associated companies or associated undertakings. whatsoever. The SECP had been in dialogue with the Ministry of Finance and the FBR on the rationalization of CGT. At present three general takaful (non-life insurance) companies and two family takaful (life insurance) companies are operating in Pakistan. and separate solvency requirements for each participant takaful fund. he announced the approval of SECP‘s proposal on revamping of Capital Gains Tax (CGT) submitted to the FBR last week. The regulations prescribe disclosure requirements and specify conditions and restrictions on the nature. Consequently. as of May 1. the above condition shall read: ―The Association shall make no investment. The SECP has. was originally imposed to restrict improper use of funds by the associations. whatsoever. For purpose of convenience of stakeholders. allowing conventional insurers to have takaful windows. 2012. which will be given effect through notification in the official gazette. After amendment. in its associated companies. SECP relaxes condition of license to non-profit associations under Section 42 The SECP has made amendment to the conditions for grant of license to not-for-profit associations under Section 42 of the Companies Ordinance. Updated website declared mandatory for all listed companies All listed companies.‖ It is hoped that the amendment shall facilitate genuine transactions by the not-for-profit associations which was earlier not possible. The SECP has approved notification for mandatory requirements for listed companies to have a functional website. The 2012 draft Takaful Rules have suggested the establishment of a Central Sharia Board at the SECP. enhancing investor education and awareness and the brokers‘ capacity to trade. it would increase the insurance penetration in Pakistan. therefore. The condition in this regard required that the not-for-profit association shall make no investment. easy access to information. the number of takaful service providers in Pakistan will increase substantially as all life and non-life insurance companies will also be allowed to offer takaful products. Ali outlined the SECP‘s role. Muneer Kamal. He also requested the honorable members for support in finalizing pending legislation. Dada. fiscal and regulatory reforms. both as a result of government requirements and to avoid the reputational risks involved. has over 28 years of extensive experience of the banking and financial sector during which he has served locally and internationally on senior positions at various renowned banks. Insurance companies directed to combat money laundering The Securities and Exchange Commission of Pakistan (SECP) has issued a directive to the insurance companies on the anti-money laundering (AML) regime. He highlighted the importance of a robust legal and regulatory framework for the development of the financial markets as it provides the necessary structure for product innovation. It was an interactive session during which the members provided suggestions and sought clarification on various issues. This directive is applicable to all public and private sector insurance companies. Barclays Bank PLC. To curb the unfair practices that have been observed in such transaction by imposing certain restrictions and conditions felt necessary based on regulatory experience. Mr. NBFC and insurance sectors. Pakistan is a 31 . the amount of money laundered each year is in the billions dollars and poses a significant policy concern for governments. especially with regard to legal. objectives and responsibilities. It is pertinent to mention that such regulatory directions on AML are already enforced and applicable by the SECP in the non-banking and finance sectors in Pakistan. the financial institutions also make efforts to prevent and detect transactions involving laundered money. In the larger interest of the insurance industry for customer due diligence and to combat money laundering. The directive has been issued to address the gaps related to the threat of money laundering in the insurance industry. Shazad Dada. market integrity and enables the regulator to maintain investor confidence. it is important that the regulator and insurance industry join forces for the implementation of this directive and other future course of action on the AML. Revenue and Planning and Development on its functions and performance in a meeting held at the SECP head office on Thursday. Mr. CEO. The SECP Chairman welcomed the honorable members and thanked them for taking time out to visit the SECP. Muhammad Ali. briefed the National Assembly‘s Standing Committee on Finance. Many regulatory and governmental bodies have taken measures to prevent this practice and regardless of the difficulty in measurement. Fauzia Wahab. KSE Board: SECP names independent directors The Securities and Exchange Commission of Pakistan has re-nominated/re-appointed Mr. including the customer due diligence/know your customer (CDD/KYC) policies and designation of compliance officers. They had also served on the KSE Board last year as independent directors and their appointment can be seen as a fair balance of the requisite qualifications and skills on the board. Ali also discussed the future roadmap and strategy of the SECP. Mr. SECP briefs NA body on its functions and performance The SECP Chairman. Shazad G. Ms. It may be added that money laundering refers to the process of concealing the source of illegally obtained money and the methods by which money may be laundered. Asif Qadir and Abdul Qadir Memon on the Board of the Karachi Stock Exchange (KSE) for the 2012 term. Chairperson of the committee chaired the meeting. As the governments and international organizations undertake efforts to deter prevent and apprehend money launderers. Mr. presently vice-chairman of the KASB Bank Limited. Mr. and To introduce detailed and standardized requirements in order to avoid ambiguities and fill the gap in the perspective of the corporate sector vis-à-vis that of the regulator in respect of investments in associated companies or undertakings.   To ensure transparency in transactions involving investments made by companies in their associated companies or undertakings through adequate and standardized disclosures to the members. He also briefed the committee on major issues faced by the capital markets as well as the corporate. Muneer Kamal. In his detailed presentation. In order to promote the anti-money laundering practices such directions are prescribed and implemented by regulators globally in the financial sectors. Fellow of the Institute of Taxation Management Pakistan and President. 7 and four companies respectively. each. 28 public unlisted companies. Of the three foreign companies.596 companies were registered during the calendar year 2011 as compared to 3. education with 14. These companies constitute 3. The SECP registered 271 companies during December 2011 The Securities and Exchange Commission of Pakistan (SECP) registered 271 companies during the month of December 2011. and food and beverages with 10. 1969 and to a brokerage house of KSE under Section 22 of the Securities and Exchange Ordinance. 88 followed by CROs Islamabad and Karachi registering 78 and 67 companies. 2001 whereby the registration of the said brokerage house was suspended for 15 days for non-compliance to the Commission‘s earlier orders. During December 2011. global experience and diverse expertise that the above professionals possess. 255 single member companies.137 during 2010. transparency and will be instrumental in bringing about various capital market reforms. 1969. 22 investor complaints pertaining to brokers and 4 complaints pertaining to listed companies were resolved. During the month. warning letters were issued to two brokerage houses of KSE and two individual investors for execution of Wash Trades.seasoned banker and a prominent capital market professional. president and CEO. 2 warning letters were issued to the directors of a listed company for non-compliance to Section 224 (4) of the Companies Ordinance 1984. 19 32 . It is hoped that the directors will continue to contribute positively to promoting principles of good governance. is a senior resource and is a renowned tax and corporate laws expert. 10. communications with 12.06 million. is Rs. Asif Qadir. 15 foreign companies. will continue to benefit from the mix of extensive knowledge. A total of 3. and services sectors and by nationals from Singapore and Afghanistan in two new local companies in tourism and communications sectors. two are from Turkey and the USA and have been registered in Islamabad. three not-for-profit associations and foreign companies. Foreign investment by nationals from China is witnessed in three new local companies in the auto and allied. Pakistan Tax Bar Association. respectively. Mr. Mr. The sector-wise position shows that the trading sector has the highest new incorporations with 39 companies. and a trade organization.e. An order was passed against Zafar Moti Capital Securities Ltd. It is expected that the KSE Board in particular and the capital markets in general. tourism with 11. 51 not-for-profit association. In two separate instances. Further. reflecting an increase of 15%. Company Registration Office (CRO). 5 trade organizations and 3 companies limited by guarantee. i. 1984 to issue. private companies have the highest share in new incorporation totaling 239 followed by 20 single member companies. has over 30 years of management and marketing experience of the chemical and fertilizer sector and has served in key management positions on the chemical giant Engro Corporation Limited. During the month. the Securities Market Division of the Securities and Exchange Commission of Pakistan took enforcement actions and penalized the market participants for non-compliance to the regulatory framework during the month of December 2011. member KSE. five public unlisted companies. SECP granted approval under Section 57(1) of the Companies Ordinance. Abdul Qadir Memon. Warning letters were also issued to two brokers of KSE and LSE for execution of Blank Sales. possessing an in-depth knowledge about the various aspects and implications of the corporate matters and company laws. while a foreign company from Netherlands is registered in Karachi. Remaining CROs at Peshawar. three amendments were approved in the regulatory framework of NCCPL and ISE. construction and information technology with 13 each.53 billion and Rs. respectively. circulate and publish the prospectus for issue of 12. Moreover. SECP issues orders and warning letters In order to develop an efficient and dynamic securities market and to safeguard the investors‘ interest. mineral.The copies of all the warning letters are available on the SECP‘s website. The authorized capital and paid up capital of 271 companies. Engro Polymer and Chemicals Limited. He has over 20 years of major national and international financial markets‘ experience.475.. followed by services with 35. Lahore registered the highest number of companies.239 private companies. hajj and umrah services with 20. a show cause notice was served to a commercial bank under section 15E of the Securities and Exchange Ordinance. Quetta.4. Further. Multan and Faisalabad registered 17.50 million ordinary shares by Next Capital Limited. under the Brokers and Agents Registration Rules. while the Senegalese delegation was headed by Mr. accordingly. Islamabad. for further processing. is also being considered for implementation and is expected to be operational in the coming months. As soon as the user shall make payment at the designated bank branch of MCB.3. The negotiations were conducted in a cordial and friendly atmosphere at FBR Headquarters.e. As a way forward. ―Documentation of Economy & Tax Evasion‖ and ―e-services for Taxpayers‖ followed by a detailed Questions and Answers session. Sindh-Balochistan Rice Millers Association. Pakistan‘s delegation was headed by Mr.1. and is only available for online applications. El Hadji Ibrahima DIOP. as normal working days in order to facilitate the trade and industry in getting their cargo cleared for imports and exports. at least one day was required in e-Challan verification after payment by the depositor at the bank. The port authorities/port operators have also been advised to synchronize their working. This new procedure is expected to enhance facilitation to the SECP‘s eServices users and substantially improve the turnaround time in disposal of online applications. During the Questions and Answers session. Chambers of Commerce & Industry of Hyderabad. The negotiations will continue in its second round to reach an agreement between the two countries in near future. Taxpayers‟ Interaction Seminar held at RTO Hyderabad Facilitation and Taxpayers Education (FATE) Wing of the FBR arranged a Taxpayers interaction seminar at Regional Tax Office (RTO) Hyderabad today. Shahid Hussain Asad. 2012 FBR has ordered that all the Model Customs Collectorates shall remain open on Saturday 28th January. the option of direct transfer from the depositors‘ MCB accounts to the SECP account in case of fee for online applications. The SECP enables automatic verification of e-Challans for payment of fee The Securities and Exchange Commission of Pakistan (SECP) has enabled automatic verification of eChallans for payment of fee to it. Central Sindh Tax bar. detailed presentations were made on working of the Facilitation and Taxpayers Education (FATE) Wing. Federal Board of Revenue. During the interactive seminar. the bank branch shall automatically send intimation to the SECP of receipt of payment. as part of a series of seminars currently being arranged under Taxpayers Awareness Initiative and was attended by members of Hyderabad Tax Bar Association.fbr. Customs collectorates to remain open on Saturday 28th January. FBR News (www. Member (Inland Revenue). its economy and the 61 Conventions/Agreements for Avoidance of Double Taxation that Pakistan has signed with other countries so far. Both sides presented and appreciated each other‘s respective positions.companies increased their authorized capital with the aggregate authorized capital increment of Rs. representatives of Pakistan Tax Bar Association and FBR officials.57 billion and 42 companies raised their paid up capital with the total paid up capital increment amounting to Rs. The new procedure shall be implemented with effect from January 3. The management of State Bank of Pakistan and National Bank of Pakistan has been requested to provide banking facility by the designated branches on the above mentioned dates to ensure the payment of duty and taxes.gov. 2012. in coordination with RTO Hyderabad. Under the new procedure. Mirpurkhas and Thatta.. i. Director of Legislation. Previously. Studies and Litigation. the participants voiced their concerns over the topics covered in the 33 .pk) Negotiations held between Pakistan and Senegal on Avoidance of Double Taxation First round of four-day negotiations concluded here today at Islamabad between the delegations of Pakistan and Senegal on the draft Convention for Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income.15 billion. The Senegalese delegation was briefed about the tax system of Pakistan. tomorrow. The seminar was arranged by FATE Wing. This initiative is another step towards switching over to online environment as only the process of payment to the SECP is presently carried out offline. 2012. representatives of major withholding agents. systems of both the SECP and MCB have been linked online and now payments can be verified automatically within a few hours‘ time. 05 per cent. the participants voiced their concerns over the topics covered in the presentations and highlighted their general and specific issues. Misri Ladhani.presentations and highlighted their general and specific issues.201. Islamabad. Sections8 and 9 of the Civil Servants Act. He also appreciated the efforts of FBR officials of RTO Hyderabad for arranging the event and thanked the FATE Wing for providing an avenue for interaction between the taxpayers and the Federal Board of Revenue. 1973 read together with section 4(1) proviso (b) of the Service Tribunals Act. He also appreciated the efforts of FBR officials of RTO Hyderabad for arranging the event and thanked the FATE Wing for providing an avenue for interaction between the taxpayers and the Federal Board of Revenue.That the FBR/Government may make promotions on the principle of seniority discussed above and the embargo imposed by the FST in that regard is lifted. Promotions in Inland Revenue Service were made on the recommendations of Central Selection Board (CSB) and with the approval of the competent authority. During the Questions and Answers session. A civil servant may not be able to file an appeal to get seniority or promotion but he can definitely file an appeal to get meaningful consideration for his seniority/promotion.2011 regarding promotion of IRS officers from BS-19 to BS-20 and BS-20 to 21. The participants also appreciated the initiative of Taxpayers‘ interaction. Federal Service Tribunal in its decision dated 02.12.7 billion during the month of December 2011. as compared to Rs. Islamabad. 1973 are very clear on that However. FBR promotes officers of IRS to BS-20 & 21 on the basis of FST.e. The Honorable FST vacated the stay order imposed on promotions with the following remarks: .12.7 billion up to December 2011 According to the provisional figures. However.7 billion collected during the corresponding period of the last year i. showing an increase of 27. The FBR officials present in the seminar addressed those concerns and noted down the suggestions for further perusal. Islamabad and the final promotions were made in compliance of the orders of FST.12. awareness and facilitation undertaken by the FATE Wing of the FBR and said that this should be made a regular feature. to be considered for promotion and seniority is a vested right. the FBR through cash reporting system has collected Rs.840. thanked the participants for attending the seminar and making it a success.7 billion of revenue estimates up to December 2011. awareness and facilitation undertaken by the FATE Wing of the FBR and said that this should be made a regular feature. The FBR officials present in the seminar addressed those concerns and noted down the suggestions for further perusal. Farooque Azam Memon and DC (HQ) Mr. Recognizing the jurisdiction of FBR.840. up to December 2010. the Honorable FST has further given observations as under:. FBR Collects Rs. The senior officers if recommended for promotion would be re-assigned seniority in next scales as per their seniority upheld by the Honorable FST. Islamabad. The participants also appreciated the initiative of Taxpayers‘ interaction. Additional Commissioner Mr. The cases of those officers which could not be presented to CSB and so not considered for promotion due to seniority dispute or being junior in seniority in the impugned seniority list would be presented in the next CSB according to their seniority based on the list upheld by the FST. The Chief Commissioner RTO Hyderabad Mr. Peer Khalid also addressed the seminar. The Chief Commissioner RTO Hyderabad Mr.12.2011 had inter-alia observed that "Promotion and seniority are definitely not vested rights. Additional Commissioner Mr.2010 is now valid for all practical purposes. thanked the participants for attending the seminar and making it a success. Peer Khalid also addressed the seminar.12. Farooque Azam Memon and DC (HQ) Mr. Misri Ladhani.2011 & 03. Federal Board of Revenue (FBR) collected Rs. Islamabad Seniority List dated 14. Promotions already made from BS-20 to BS-21 and BS-19 to BS-20 vide Notifications dated 02. they could definitely make a prayer that they should have been considered correctly for their seniority/promotion.That the Government/FBR is fully competent to decide this assertion of the appellants and respondents that some promotions have already been made in violation of seniority rules and even the aggrieved parties can seek remedy in appropriate forum. In the present case the appellants could not claim safeguard of their right to seniority and promotion. Islamabad decision The Federal Board of Revenue (FBR) strongly contradicts the false impression created through a section of the press on 29. 34 ." In light of the decision of FST.2011 have not been rejected/nullified by FST. alleging that the promotions were made in gross violation of the verdict of Federal Services Tribunal.661. owing to both domestic weaknesses and the international financial upheaval.0 billion.125. which has led to crowding out of private sector and is acting as a disincentive for banks to perform their role of financial intermediation.11. it said.8 billion. Nevertheless. helped in keeping demand-driven inflationary pressures at bay.8 percent increase in their expenditures. which could 35 . the amount collected up to end-Dec 2011. adding that meeting end-year revenue targets would also depend upon the realization of CSF and sale of 3G licenses (around Rs.5 percent during the same quarter last year. the end-year average inflation is likely to fall close to 12. SBP remains vigilant that pressure on the Rupee is not translated into market speculation. says State Bank‘s First Quarterly Report on the State of the Economy released today. which was 85. bilateral assistance from the US. which was supplemented by the easing of food prices. compared with 1. The Report said that in the past. currency swap arrangements.org.7 percent) in December.150. the Report added. As a result circular debt issue is likely to persist. Non-tax revenues also recorded impressive growth of 50. Specifically. it would be difficult for the government to contain the fiscal deficit within its annual target. The Report noted that the government is. the current account deficit for Sep 2011 alone was over US$ 1. due to recent developments. Nevertheless. The most recent policy decision to keep the policy rate unchanged was influenced among others.1 billion in the corresponding period last year. The Report said the government‘s efforts to keep its borrowing from SBP in check during the initial months of FY12. which were recently formalized with the central banks of Turkey and China.pk) Government making headway towards improving its finances: SBP First Quarterly Report Recent fiscal figures show that the government has been making some headway towards improving its finances. however.7 percent growth in FBR revenues.sbp. easing the stress on the country‘s reserves. It said that this reduction in the budget deficit was caused primarily by 29. by the weakness in external accounts during Q1-FY12. This has important implications for monetary management and price stability.3 billion. sustaining this performance in FY12 was always going to be difficult. and the privatization proceeds of PTCL will be received. a part of the current account deficit is likely to be financed through reserves as was the case during July-October FY12. As a result. on the basis of seasonal trend in FBR revenues.0 billion). it said. it cannot add to the stress on the economy arising from weaknesses in other sectors. adding to the country‘s economic vulnerability. it added.‘ the Report added. due to 52. 2011. the pace at which the current account deteriorated during the first quarter of FY12 took many by surprise. ‗Any short fall in the contribution by the provinces would make achievement of the fiscal deficit target more challenging‘. This amount includes Rs. However. against Rs. despite the drying up of FDI and other foreign investments. which has now been transferred on to the government‘s books. will also facilitate bilateral trade and investment. there was a net increase in its FX reserves. The Report said that the federal government has budgeted a surplus of Rs. recent weakening of Pak Rupee and the base effect may increase inflation in the coming months. Unfortunately. adding that while some financial inflows are expected. financial flows have almost dried up.6 billion surplus up to Q1-FY12.1. Furthermore.736. it said.336. Government borrowing from the banking system up to end-Nov 2011 was Rs. adding that unfortunately. While SBP has shown its willingness to relax its policy to support the private sector as it did in July and October. It said that Pakistan was fortunate in FY11 that its current account ended up in a surplus and.0 percent as projected earlier. optimistic that the 3G telecom license fee will be realized. the Report observed. In addition.391. however. the Report said. on the back of increased tax collection efforts and higher revenues from imports. The budget deficit for the first quarter of FY12 was 1. While the increase in energy prices.State Bank of Pakistan News (www. provinces managed only Rs.0 billion on part of provinces. in absence of which. the Report cautioned. the Report observed. ‗Given the rigidities in the trade account and the vulnerability of the financial account.2 percent of GDP. 2011 after remaining in double digits for the last two years. falls short of the amount needed to meet the annual target of Rs.4 percent.7 percent lower than the corresponding period last year. YOY CPI inflation declined to single digit (9.0 billion borrowed from banks to retire PSE debt. According to the Report the lack of external funding has put the burden of financing the deficit disproportionately on the banking system. PSEs continue to hemorrhage as a credible restructuring plan has not been put into action.952. Pakistan has sustained larger current account deficits without losing its foreign reserves due to healthy inflows in the financial account. there is still optimism that parts of the CSF. ZTBL and SBP Banking Services Corporation. (The complete text of the Report both in English and Urdu languages is available on SBP website: www. around 68% whereas credit to non form sector including livestock sector is only 32% as compared with its contribution of 55% to agriculture GDP.become self-fulfilling. Yaseen Anwar. The credit requirements of farmers have also increased significantly besides adjustment of existing agricultural loans. 2010 to December. farmers‘ representatives and other players in value chain also need to create credit absorption capacity of farmers through adoption of best modern farming practices. Anwar highlighted the key initiatives taken by SBP during July. high oil prices and decline in global prices of agricultural commodities. he added. rescheduling & restructuring of loans of the affected borrowers in addition to providing fresh credits for the rehabilitation and revival of the economic activities in the affected areas. financing as viable business model Mr. Mr. The SBP Governor announced the setting up of an Implementation Committee to ensure timely implementation of the action plan prepared by the ACAC Special Committee. he said. Anwar said that in order to ensure timely and quick loan disbursement to help the agriculture sector and revival of economic activities in the affected areas. Mr. SBP Governor said that banks need to develop a comprehensive agricultural finance policy for settlement. Presiding over a meeting of Agricultural Credit Advisory Committee (ACAC) at SBP. ‗SBP will continue to monitor the forex market closely to remove any excessive volatility in the Rupee. in 51 agriculture intensive districts covering 75% of total farm households in the country. farmers representatives. he said the relevant federal & provincial government departments. which was a difficult one for the economy. The Report observed that realizing the 4. not only due to the devastating floods that hit the country early in the fiscal year. 36 .550 million of the borrowers of ZTBL) have been settled by insurance companies in 2010 and 2011. adding that agriculture remains the mainstay with a contribution of more than 21% to the GDP and around 60% of the population depends on agriculture related activities for its livelihood.2 percent growth target for FY12 GDP looks difficult due to a host of factors that include. ‗Banks were also allowed to restructure the existing loans and write-offs in cases where the recovery of loans is not possible‘. Yaseen Anwar asks banks to adopt agri. ‗The federal & provincial governments would also need to initiate support & relief packages for the affected areas‘. Mr. development of storage & marketing systems and resolution of other real side issues.pk). gas shortages. State Bank of Pakistan (SBP) has urged upon the banks to adopt agricultural financing as viable business model through development of specific products/ schemes and disseminate best practices through grass-root level programs for farmers. SBP in collaboration with banks has taken a number of initiatives including Refinance Scheme at discounted rates of 8% coupled with Credit Guarantee Scheme for loss sharing of banks up to 40%. The Committee will also collaborate with Regional Agriculture Focus Groups of SBP-BSC offices to get feedback on the implementation strategy and ensure timely implementation of decisions/ recommendations. State Bank of Pakistan and include members from provincial agricultural departments. He said the crop loan insurance scheme introduced by the government for production loans for five major crops has also supported the sector whereby claims of around Rs 800 million (including around Rs. Karachi today. This Implementation Committee will be headed by the Executive Director. 2011 that include: Introduction & completion of Pilot Project Phase III with 87% achievement of set targets. Pakistan Banks Association (PBA). but also due to the lack of external financing and energy shortages.org.sbp. Mr.e. He said that heavy rains of 2011 and devastating floods in 2010 have greatly affected the national economy in general and agriculture sector in particular. He pointed out that agricultural credit is highly skewed towards farm sector i. constituted in December.‘ the Report added. Governor. Anwar added. 2010. among others. The update on the progress of implementation would be made to the ACAC in its next meeting. The Report said the policy makers were hopeful that the country would put up a better economic performance in FY12 after last year. the Report said and added that striking a balance in managing a flexible exchange rate driven by economic fundamentals and by market speculation (within the context of sharp currency movements in the global economy) is challenging. developed Guidelines for Efficient Water Management Financing. fair & transparent price mechanism & postharvest financing system (the assignment has now been shifted to Pakistan Mercantile Exchange for its implementation).5 billion by Microfinance banks as compared to the last year‘s Rs. investments. Arrangement of Knowledge Sharing Session with Central Bank of Indonesia for learning their key success factors in the area of agricultural/ rural finance. SBP and DFSD. Delivering his key-note address at the launching ceremony of the Program at SBP Learning Resource Centre. Launching of 6-week specialized Internship Program for students of Agricultural Universities/Departments from 5th July. total disbursement registered an optimistic figure of Rs. which was issued vide AC&MFD Circular No. 2010.2 of 2011. SBP-BSC. Yaseen Anwar. State Bank of Pakistan has said the Nationwide Financial Literacy Program (NFLP) will work towards improving financial inclusion and also serve the interests of all financial sector stakeholders. financial products. initiatives taken by SBP to enhance the outreach of agricultural/ rural finance. Karachi today. 102 billion for the same period with 23% overall growth rate. training 178 senior officials of agricultural lending banks. To ensure timely disbursement of agricultural credit to the farming community. Governor. related policies. branchless banking and consumer rights & responsibilities to about 50. In order to revive SMEs‘ & agricultural activities in flood affected areas. He said the above mentioned initiatives of State Bank are important but the real benefits can only be reaped through collaborative efforts of all the stakeholders including banks. 16 of 2010 for improving access to finance in 78 flood affected districts notified by National Disaster Management Authority (NDMA). Pakistan‘s first-ever Nationwide 37 . An amount of Rs 285 billion is the indicative agricultural credit disbursement target for banks and Microfinance Banks (MFBs) for 201112 which is 8. Finalization of a primary framework of commodity operations after deliberations with key stakeholders which will evolve proper storage. revised the list of documents to be obtained by banks against various kinds of agricultural loans and streamlined the turnaround time for agricultural loan processing through ACD Circular No. He said the NFLP pilot will impart financial education and awareness on six personal finance themes that include budgeting.4 percent higher than 2010-11 targets. build capacity of banks in enhancing outreach of agricultural credit. savings.000 beneficiaries from low income strata. Arrangement of Agribusiness Finance Workshop at Netherlands for senior officials of SBP & SBP-BSC and agricultural lending banks to create awareness. issued a Refinance Scheme vide SMEFD Circular No. schemes. 5. The meeting was informed the mid-year (July-December 2011-12) performance of agricultural credit remained satisfactory wherein. debt management. This positive trend indicates gradually building trust of formal sector towards agricultural financing because of its sustainable nature and showing signs of recovery after overall recessionary environment. relevant departments of Federal and provincial governments and farmers representatives. 2010 at SBP to facilitate provision of quality human resource for banks in agricultural financing to achieve the overall objective of access to finance to the farming community. To ensure availability of credit to the farmers for the purchase and maintenance of efficient systems and techniques.         Successful arrangement of six Training Workshops for CAD/Risk Management Departments of Banks on Agricultural Loan Documents/Procedures. 125 billion which included additional Rs. To educate agriculture graduates about the basic structure of agricultural financing. 02 of 11th August. arranged eight ―Policy Adequacy and Awareness Seminars on Agricultural Financing‖ so far at different agriculture universities of the country. Financial Literacy Program to serve the interests of all financial sector stakeholders: Yaseen Anwar Mr. he said it will initially impart basic financial literacy to poor and marginalized people of Pakistan. the project has formed international partnerships with international financial education programs including Microfinance Opportunities. Mr. therefore. Microfinance Banks (MFBs) and Microfinance Institutions (MFIs) based on their interest and pre-defined qualification criteria. Association of Microfinance Institutions of Uganda (AMFIU). he said. Finmark Trust. adding that focus of financial literacy program should be broader than financial inclusion. he said.‘ he emphasized. SBP introduced Microfinance Banking Regulations in 2001 to specifically meet the demands of low income consumers. best practices in this area are still evolving. professional fees and out of pocket expenses of partners will be reimbursed from the program budget.Financial Literacy Program (NFLP) has been launched with the support and collaboration of Asian Development Bank (ADB).‘ Mr. only 32 percent are informally served and 56 percent are completely excluded. Upon completion of the pilot phase. Sewa Bank. the dissemination strategy involves street theatres. SBP introduced Basic Banking Account (BBA). Anwar said that many poor and non-poor people do not have a bank account and very few of them understand why this puts them at a disadvantage when it comes to their personal financial management. ‗The survey has been helpful in development and adaptation of curriculum and dissemination strategy. Whereas of the remaining 88 percent. vulnerable and not willing to participate in financial markets. board games. Anwar said that in addition to focused training sessions of beneficiaries. Pushto and Balochi. Anwar added. inclusive and robust financial sector. Pakistan Banks‘ Association. Microfinance Innovation Centre for Resource and Alternatives (MICRA). and the ADB. SBP Governor said that the Program is financed under the ADB-funded Improving Access to Financial Services Fund (IAFSF) and implemented under the oversight of the IAFSF Committee which has representation from SBP. obligations and mechanisms for recourse to build a fair. he said and added that in order to encourage and incentivize participation from partners.‘ he added. and others. adding that based on the experience and assessment of the pilot. Pakistan Poverty Alleviation Fund. He briefly touched upon various conventional and non-conventional measures adopted by SBP to boost financial inclusion which are as under:i. ‗This clearly identifies the need for financial education as a systemic area to be addressed to tackle financial exclusion in a big way. a simplified financial product for low income consumers. ‗According to Pakistan Access to Finance Survey (A2FS). Pakistan Banks‘ Association (PBA). an impact assessment of the pilot will be conducted by a third party. adding that according to the A2FS analysis. Aflatoun.‘ he said. only 12 percent of the population has access to formal financial services. Pakistan Microfinance Network. ‗It should aim to increase consumer awareness about their rights. activity-based competitions website and media campaigns to reach out the masses on a larger scale. The curriculum will also be translated into national and main regional languages including Urdu. Sindhi. comic strips. Pakistan Microfinance Network (PMN). Punjabi.‘ he said and added that financial literacy has assumed greater importance in recent years for both developed and developing countries. He said the program has been developed after the Financial Literacy Gap Assessment Survey of beneficiaries. Pakistan Poverty Alleviation Fund (PPAF) and Bearing Point. 38 . ii. World Bank Institute. about 40 percent of the financially excluded population reported lack of understanding of financial products as the main reason for financial exclusion. Intermediaries should fully disclose their terms and conditions to clients before selling them a product or service. ‗Besides involvement of local institutions. He said: ‗I would like to encourage financial service providers to partner in the NFLP rollout and exercise proportionate level of accountability and responsibility to act in the best interest of their clients.‘ Mr. It is now clear that policies which focus entirely on changing the supply of financial products and services can leave consumers ill-informed. the program will be scaled-up to target more than half a million beneficiaries all over the country. The training sessions will be sourced from banks. education sector. SBP Governor said that consumer protection and financial education should be vital components of any financial inclusion initiative. composition. which was held under the chairmanship of the Federal Finance Minister.‘ he said. The study contains four patterns of innovation proposed by the United Nations Industrial Development Organization – product innovation. iv. The State Bank Spokesman today said that the issue of debt swap deal with commercial banks was not discussed in the meeting of Monetary and Fiscal Coordination Board. The Institutional Strengthening Fund (ISF) providing grant funding to microfinance (MF) providers to top and middle tier MFBs and MFIs for key investments in HR.iii. d. Dr Abdul Hafeez Shaikh in Islamabad yesterday. supply and demand side issues. According to the study. c.163 billion debt with them does not arise. However. Therefore. SWOT analysis. The SBP Spokesman said that since the matter regarding the debt swap deal was never discussed in the meeting of Monetary and Fiscal Coordination Board. and recommendations on increasing access to finance for the fan cluster. whose mandate should 39 . And the Improving Access to Financial Services Fund which is supporting today‘s program. Mr. available growth opportunities. b. accounting practices. process innovation. LUMS study to help increase lending to SMEs The State Bank of Pakistan (SBP) today launched an important study on fan industry in collaboration with the Lahore University of Management Sciences (LUMS). business plans and branchless banking development. The Spokesman regretted the linkage of the reports between the so-called SBP comments and the Prime Minister‘s policy statement in the Parliament yesterday in which Syed Yousuf Raza Gillani presented the proposed debt swap deal as a solution to the circular debt. including branchless banking through retail agents and harnessing technology via mobile-phone banking. product development. research centers. The Microfinance Credit Guarantee Facility to link microfinance with financial markets for mobilization of wholesale commercial funding through partial guarantees. SBP has adopted innovative solutions to overcome geographical barriers. risk management systems. ‗What has been missing is a demand side solution – a program to impart financial education and awareness to consumers. which will help Pakistan‘s banking sector expand access to finance for the Small & Medium Enterprises (SMEs). The study covers important aspects of fan industry including historical growth trends in the industry. SBP has been managing various market interventions funded by donor agencies that include:- a. adding this recognizes that the very low level of financial awareness and confidence of financially excluded groups remains a strong barrier to their access and use of financial services. 2012) which stated that it (SBP) opposed the debt swap deal with commercial banks. enable systems and procedures to be more efficient and provide new ways of meeting the larger demand for financial services. contribution to national economy. the question of SBP Governor. Yaseen Anwar conveying his reservations about the government‘s move to strike a deal with commercial banks to swap Rs. Similarly. The study also recommends for the setting up of an implementation committee. the most essential point for the sustainable development of the fan industry in Gujrat and Gujranwala is to improve the capacity for independent innovation to help the industry reach a higher place along the global value chain. its linkage with the Prime Minister‘s policy statement is un-called for and highly mischievous. State Bank‟s Clarification The State Bank of Pakistan (SBP) has categorically denied reports appearing in a section of the press today (January 20. new & advanced technology and universities. he said that these are mostly supply side interventions aimed at increasing the financial services by removing bottlenecks and have raised financial inclusion to a certain extent. function innovation and interdepartmental innovation – and emphasizes the role of inter-organizational R&D departments. IT. SBP. banking and financing needs of the sector. the Financial Innovation Challenge Fund (FICF) for grants to innovative projects and testing new markets to lower cost of delivery. it was decided to ask the M/o Religious Affairs to inform the NAB about any action taken so far against such like travel agents.53/million loan of ABL. The Board also allowed the closure of inquiries against Muhammad Saeed X-EN PWD. reliable and credible data on existing SME clusters is lacking.be to develop an implementation plan with clear time-lines and targets based on the strategy paper. Muhammad Ashraf Khan. It also approved the voluntary return of Javaid Nazir and Brothers (Private) Limited Lahore for the willful default of Rs.pk) NAB Board Meeting Held The NAB Board meeting today discussed thread bare case of Parliamentarian‘s Enclave Housing Scheme. Today we are here to unveil findings of research report on fan cluster and emphasize upon banks to make maximum use of the study findings while designing banking products for the industry and fulfilling their financing needs.55/.nab. Ashraf Khan commented that in Pakistan. Muhammad Ejaz Ex-DCO.pk/departments/ihfd-ifc. The Plea Bargain request of Haji Sharif Ullah contractor of KPK for construction of sub-standard road was also approved.‘.1035/.gov. due to lack of substantial evidence. Project Consultant from LUMS. he said. Mr. It was decided that if no action is taken by the Ministry against such tour operators NAB will take the action against them in future. A dissemination seminar was held at SBP. Mr.451/. Islamabad for payment to the affectees by former senator Ayaz Khan Mandokhail. The meeting also approved the plea Bargain of Seth Nisar in Bank of Punjab case for an amount of Rs.htm provide important guidance to banks on increasing lending to SMEs through customized and low-cost product programs.million from him. he added.sbp. Karachi. Usman Khan.million out of which NAB has already recovered Rs. Syed Ghazanfar Ali Sherazi Advocate. On a complaint against Gerry‘s travels by the pilgrims for not providing the services to them as promised during pilgrimage. Mr. the accused backed out from his commitment and now after 4 years he has given a commitment to the Accountability Court that if his assets are released. It was noted that earlier a refund or Rs. against Mohammad Saeed Khan DEN Pakistan Railways for corrupt practices. The Ministry should secure financial arrangements with guarantees from tour operators in future. It was decided that NAB would proceed as per law to ensure the payments to the victims of housing scheme. Liaquat Ali Jotoi former Federal Minister. Later on. against Taj Muhammad Sarparah AFC / Incharge PR Centre Sariab Godown Quetta and others for taking away wheat from the government godowns illegally. Ghulam AKbar Khichi EDO. In this backdrop.org. Executive Director. officials of City Distt Govt. Ali Asghar DSP. Addressing the participants. NAB Executive Board Meeting Held The Executive Board Meeting of NAB today took a serious notice of getting no response from AG‘s Branch GHQ despite four reminders in case of NLC scam involving huge losses worth billions of rupees 40 . and Muhammad Mumtaz Khan Asstt Electric Inspector. The meeting approved the filing of references against Rana Muzammal-ul-Haq for misappropriation of public funds from Punjab Cooperation Board for Liquidation.million to the affectees has been made. NAB NEWS (www. the State Bank has been collaborating with reputed research institutions/consulting firms to conduct research on key SME clusters to facilitate financial institutions in better understanding of the sectors and accordingly come up with improved products for these clusters. which hampers banks‘ understanding of SME sub-sectors dynamics and resultantly makes them shy of lending to the SME sector. The Board Meeting was chaired by Chairman NAB Adm (R) Fasih Bokhari. which was followed by a question-answer session. Ameer Zada Khan Kohati Ex-DG MDA. Karachi today to share the major findings of the study with banks and other stakeholders. which was attended by senior executives of banks and other relevant SME stakeholders. he would make the payment to affectees. The booklets of these surveys placed on http://www. gave a detailed presentation to the participants covering the important aspects of the study. The study report on fan cluster is latest addition to the surveys of 10 important clusters recently conducted by SBP in collaboration with International Finance Corporation (IFC). On specific complaint verification the Chairman observed that an affidavit from the complainant will precede the verification in order to avoid the frivolous complaints. State Bank of Pakistan chaired the seminar. incurred by Lt Gen (R) Afzal Muzaffar, Lt Gen (R) Khalid Munir and Maj Gen (R) Khalid Zahir Akhtar. The meeting decided to write a letter to M/o Defense in the matter to inquire whether any proceedings are going on against these officials in this case or not. In case no response is received from the Ministry within a week, NAB will take cognizance of the matter and proceed according to law. The meeting held this morning was chaired by Adm (R) Fasih Bokhari. The Board authorized to conduct the investigation against misappropriation of funds through the acquisition of land by Workers Welfare Board for the construction of labor complex at Kot Najeeb Ullah at District Haripur. The meeting accepted the voluntary returns of Farrukh Ali Shah X-EN, Wapda and Abdul Hafeez Nagi Superintending Engineer GEPCO. The Board also approved the closure of inquiries against Fazal Dad Kakar DG and Muhammad Shah Bukhari, Project Director National Museum Karachi due to lack of evidence and on the report of PWD that work done on the project was of quality. In another case of traffic police Karachi when it was found that no proof of corruption was available in imposition of fines in lieu of fine charges from owners of vehicles parked in no parking zones, the inquiry was closed. It also closed inquiries against Nisar Ali Sheikh retired Chief Inspector Explosives, Aman Ullah Khan Jadoon, Former Minister Works and Services, KPK on the lack of substantial evidence. A case against PDA officials was also closed after the market price of a commercial plot by a buyer was paid to PDA as a result of settlement. NAB Board Meeting Held The Executive Board Meeting today authorized inquiry to be conducted in the CDA plot allotments case in which plots were allegedly allotted to the favorites for building of schools, who are already managing schools in Islamabad. There were irregularities reported in such allotments. The Board meeting was chaired by Chairman NAB Adm(R) Fasih Bokhari here this morning in NAB HQ. In another case of tax evasion in Duty Free Shop at Sialkot, the Board decided to check the possibility to recover such amount by the customs department. In case of any difficulty the case would be considered for cognizance by the NAB. A case for plea Bargain of Naeem Akhtar of TMA Kohat was turned down as the original culprit Noor Daraz was trying to escape through this plea bargain. In the case of fake auto loans of Bank Alfalah, the Board decided to refer the case to FIA for finalization of inquiry. The Board decided to close inquires against Ismail Meman former DDO, Garo Sindh, Akhlaq Ahmad former X-EN KBCA, Dr. Affaq Ahmad Khan, Director APWA KPK, Dr.Abdul Qadir Retd MS DHQ Hospital D.I. Khan and Arshad Majid former DCO Kohat due to lack of evidence in these cases. NAB starts Inquiries on the Orders of Supreme Court in Significant cases of Corruption NAB has started conducting inquiries and investigation on the order of Honorable Supreme Court of Pakistan, against highly significant cases of corruption which included corruption in the affairs of Pakistan Railways, ISAF missing containers scam involving colossal and huge loss of duties/ taxes worth billions of rupees and corruption/misuse of authority in OGRA subsequent to the appointment of its last Chairman. Proceedings in all these issues have been initiated under the provisions of National Accountability Ordinance 1999 and significant progress has been made on some important aspects including recoveries in Pakistan Railways. In the scrap case, Railway officials and contractor are under custody of NAB out of which contractor has agreed to voluntary return of Rs.47 million as a difference for the scrap lifted so far from Railways and another Rs.240 million more as a difference in addition to the amount already agreed for the material / scrap to be uplifted by him. Negotiations are going on with Royal Palm Golf Club and its management has agreed to pay a substantial amount as increase to Railway authorities annually. Inquiry about the purchase of spares for Chinese locomotives is at the final stage which in fact was the major cause for halting the Railway operations. The Bureau is also conducting important matters of Bank of Punjab as per the directives of the Supreme Court of Pakistan. In this case NAB has so far recovered more than 5 billion rupees from the accused persons out of the defrauded amount of Rs. 9 billion and the process of further recovery is underway. As per the judgment of the apex court about revival of NRO cases, all of the terminated cases were revived and are being pursued in accordance with law. In this respect more than 100 weekly progress reports have been submitted on revived NRO cases before the Supreme Court of Pakistan. The matters pertaining to grievances of the general public and referred by the Honorable Court for redressal are being given due priority and 41 compliance reports are being regularly submitted to the apex court. This shows the commitment of the Bureau towards its obligations on matters particularly entrusted by the Honorable Supreme Court of Pakistan. The Bureau is conducting its proceedings on the complaints received from various sources and matters referred by the Superior Courts. The matters related to high level corruption and particularly referred by the Honorable Supreme Court of Pakistan are being given high priority whether the referred matters are pertaining to corruption or redressal of grievances forwarded through Human Right Cell of the Apex Court. NAB Forms Committee on Land Revenue System to Suggest Preventive Measures against Corruption National Accountability Bureau, being apex anti corruption agency of Pakistan is committed to eliminate corruption and corrupt practices from society through focused approach as enunciated in National Anti Corruption Strategy. Since inception, NAB has been taking various initiatives to create awareness and devise preventive measures against corruption besides enforcement operations. At present the land revenue management system of Pakistan is perceived to be one of the highest corruptions prone areas which not only affect the agricultural community in the rural sector but also it is a source of perpetration of mega land scams in urban areas. To resolve the issue of illegal allotment of state land, the Chairman NAB, under the provision of section 33-C of National Accountability Ordinance 1999, has ordered to carry out a preventive study of land revenue management system. In the Executive Board Meeting at NAB Headquarter Islamabad, a case regarding ―grabbing Government land though illegal and dishonest means‖ was put up for authorization of investigation. The other factors relating to corruption of revenue department were also discussed. The Chairman NAB Admiral (R) Fasih Bokhari thus ordered to form a committee under section 33-C of NAO 1999 to prevent the malpractices in the department by identifying inherent weaknesses and other grey areas causing corruption in the land revenue management system. Director General Awareness and Prevention Division Lt Col (R) Siraj ul Naeem has been assigned the subject task. Findings of the committee, after approval of the Chairman NAB will be forwarded to concerned quarters for incorporation in legislation, rules and procedures. All the stakeholders including Members Board of Revenue of all provinces will be taken on board. This effort of NAB will streamline the land revenue management system. It will not only help in minimizing the corruption from the system but will also reduce the number of litigations thus reducing the burden from the courts and provide substantial relief to millions of people. Transparency International Pakistan News (www.transparency.org.pk) TI Pakistan urges CJP to take Suo Motu action against PIA for 'deliberate losses' (Part 2) Hence, the available seats/cargo capacity gets restricted revenue shall be calculated on 75 percent of the available seats and cargo capacity, if available, Pax yield will be taken as 8.7 cts, Purchase Option Price, Benefit/Adjustment of any support package, considered of value by PIA. Violations are of Rule No 8 & 9 as PIA proposed procurement is not available on PPRA website of the Annual Procurement Planning, Rule No 38 as instead of Pakistani Law, the Governing Law of the Lease Agreement by PIA shall be Law of United Kingdom. That the former Managing Director of Pakistan International Air Lines Corporation (PIAC), Muhammad Aijaz Haroon, on September 26, 2010 told the Public Accounts Committee that PIA is suffering cumulative losses of Rs.144 billion. And National Assembly's Standing Committee on Defense on December 9, 2011 was informed by the present Managing Director, Nadeem Yusafzai that financial losses of Pakistan International Airliners have swelled to approximately Rs.100 billion. That such divergent and self-contradictory financial figures submitted by Chairmen to the National Assembly Committees needs to be seriously examined by the Chief Justice in the light of allegations made against the management for misguiding the nation as well as Parliament by the Pakistan Airlines Pilots Association (PALPA), Society of Aircraft Engineers of Pakistan (SAEP), Aircraft Technologists Association of Pakistan (ATAP), Flight Engineers National Association (FENA). On October 27, 2011 it was reported in United News that the Pakistan International Airlines (PIA) had to reduced its flights by 23 percent because nine of its 39 aircraft had been grounded for want of spare parts, which 42 are to be supplied by a Dubai-based US firm, Transworld under a controversial multibillion-dollar agreement. That it was reported in newspapers on November 6, 2011, that PIA had allegedly committed corruption in 2010 Hajj operation by giving bribe to Saudi Officials. Adil said: It has also been reported in the press that PIA would be getting ten A321 aircraft and ten A320 aircraft in 2012. In 2013, PIA would acquire as many as four ATR-72 and five 777-300ER aircraft while it would get six A321 planes in 2014. The manner in which losses appear in PIA books reflect some foul play like Steel Mills (from plus Rs.12 billion to minus Rs.100 billion in 2011) and Pakistan Railways losses (Rs.56 billion loss in last 3 years), and similar Ministry of Water & Power case of RPP's in which LCs were mandatory, and daily rent was contracted to be paid whether the RPPs were operational or not (Loss of Rs 2.0 to Rs.2.5 billion monthly), KESC (illegal benefit of over Rs.50 billion per annum under amended agreement of 2009) and therefore needs a thorough probe into affairs of PIA as well to determine the factors causing loss to the national flag carrier which has a monopoly in Pakistan's skies and on face of it no one can say that this airline is running in huge loss. Gilani said who is responsible for corruption, and who is benefiting from such corruption and corrupt practices cannot be determined unless the Supreme Court of Pakistan takes suo motu notice of the facts and circumstances so that the persons responsible be punished and money pocketed by them at the cost of national flag carrier be recovered. TI Pakistan urges CJP to take suo motu action against PIA for 'deliberate losses' (Part 1) Transparency International Pakistan has requested the Chief Justice of Pakistan to initiate suo motu proceedings against Pakistan International Airlines for "deliberate losses being incurred by PIA at the cost of public money". In a letter sent to Chief Justice Iftikhar Muhammad Chaudhry, on December 12, 2011, Transparency International Pakistan Adviser Syed Adil Gilani said that PIA is following in the footsteps of Pakistan Railways, and is minus Rs.144 billion and in deliberate default of payment on repairs, which has resulted in the grounding of 12 aircraft, and is fabricating excuse for buying 39 aircraft at an estimated cost of $2.5 billion in violation of Public Procurement Regulatory Authority (PPRA) Ordinance 2002 and Public Procurement Rule (PPR) 2004. PIA employees' associations--Pakistan Airline Pilots Association (PALPA), Society of Aircraft Engineers of Pakistan (SEAP), Aircraft Technologists Association of Pakistan (ATAP) and Flight Engineers National Association (FENA)--have also alleged that "deliberate losses are being incurred by PIA at the cost of public money." The affairs of PIA are very strange, with contradictory statements given by PIA in National Assembly, which gives impression that nothing is right in PIA. Following serious facts/irregularities have been brought to the knowledge of the Chief Justice: That on February 24, 2011 Ahmed Mukhtar, Minister of Defense, informed the National Assembly (NA) that the national flag carrier, Pakistan International Airlines (PIA), was only operating in 27 countries out of more than 250. "The reason for not operating in other countries is that it is not economically viable." He further said that PIA currently had a fleet of 40 aircraft, insured with the National Insurance Company Limited (NICL), which are in operational condition. He said that although all the 40 aircraft are in operational condition; they are taken out of service for short durations for routine maintenance as per the maintenance schedule. However, on December 7, 2011, PIA tendered for leasing of 39 aircraft, with 12 aircraft to be introduced in next 4 months. The questions raised by Pakistan Airlines Pilots Association (PALPA), Society of Aircraft Engineers of Pakistan (SAEP), Aircraft Technologists Association of Pakistan (ATAP), and Flight Engineers National Association (FENA) is that there are no funds for purchase/lease of these planes, and also there is no need, as the Minister himself had declared that all 40 aircraft are operational. The allegations made by them against PIA management are the current status of PIA cancellation of flights, long delays, nonpayment of bills for firms repairing aircraft engines, viz. JALCO Amman, where four PIA engines were repaired and are ready for delivery for last five months, and two PIA engines of A 310, which have been repaired and are ready for delivery for last five months. But due to non-payment of dues, they have not been delivered. Instead, two aircraft were leased during hajj on huge payment made more than the dues for the six engines which would have made two A 310 and one B 747 operational. Many more allegations of corruption have been made by Joint Action Committee of PIA Employees (JACPIAE) in its letter of November 15, 2011. That the specifications and evaluation criteria tender documents for procurement of 39 aircraft are tailor-made for using discretion by PIA in evaluating the tenders which are violation of Rule No 10 as Specifications shall allow the widest possible competition and shall not favor 43 many of which are very grave in magnitude and depth. In a country where irrationality abounds. based on some econometric models.900 million project of converting importable water into potable by bringing it on surface of the ground from underground in Tharparkar. While the law of large numbers may in general regress towards truth. Assuming that the general public will be impressed by slogans of eradicating corruption from the country.9%) as compared to the period of the previous government led by General (Retd) Pervez Musharraf (average annual growth of 5. TIP challenges Rs. For seats above 143. but the perception of corruption in the country is undoubtedly exaggerated. It is possible to come up with a quantitative estimate of corruption.900 million water project in SC The Transparency International Pakistan (TIP) has challenged Rs. In periods of lower economic growth. However. If Pakistan Railway 44 . Evaluation of financial proposal is not based on the lowest offered cost. In many cases. The TIP expressed strong fear that it was stressed to observe transparency in a new way on this Rs. which prohibits PIA to introduce any condition. While GDP growth has been significantly lower during the last three years (average annual growth of 2. The present government has failed miserably to manage the economy. If supply of power and its rationing has increased in size and frequency. It must be stressed that the CPI is not based on a quantitative measure of corruption. corruption is such a concept that it is almost impossible to quantify it in an objective way. 75 percent seat factor of the seating configuration but limited to 143 seats.e. Even. it does not help to study the phenomenon of corruption based on the perception of individuals. which discriminates between bidders or that is considered to be met with difficulty. If CNG is in short supply.any single contractor or supplier nor put others at a disadvantage. 15 percent of additional seats will be taken for revenue calculation on year round basis. and Asian Development Bank Rules. it is again not due to an increase in corruption. Transparency International does not attempt to do so. Busting the myth: the perception of corruption in Pakistan There is no doubt that Pakistan is facing a lot of economic problems.900 million project but the issue was stuck in the office of the Sindh. i.. and Rule No 33. It must be noted here that the present article does not attempt to probe into the direction of causality between corruption and GDP or its growth. Likely delay in delivery schedule will carry revenue penalty. which helped in creating this widespread perception of rampant corruption in Pakistan. Strongly criticizing the process of awarding contract of the project for installation at the vicinity of Thar Coal Project. Transparency International. which is the basis of PPRA. some political parties have started giving timelines for getting rid of top-level corruption within 90 days of coming into power (for example. if we accept Transparency International‘s rankings the corruption score is actually slightly better than the last few years of the previous government. lack of information and an asymmetrical access to it gives rise to a lot of speculation on the part of the general public. less or ill-informed economic agents tend to attribute the so-called ―unexplained‖ gap between potential and actual gross domestic product (GDP) to corruption. Imran Khan while addressing the Karachi rally). It is based on a survey of perceptions. it is not because of an increase in corruption. Cargo revenue shall be calculated at 60 percent load factor for available capacity after accommodating passenger baggage. the TIP has accused that the tender documents for the supply of the Reverse Osmoses Water Desiltation Plants and Submersive Pumping Units were made so difficult that 12 companies purchased the tender documents but surprisingly only one company submitted documents with 100 guarantee and the contract was awarded to it. the size of corruption is directly proportional to the level of economic activity. one would expect a decline in opportunities that may fall under the purview of corruption. In fact. has a methodology for ranking countries in terms of incidence of corruption. World Bank. which sums up subjective views of a large number of respondents drawn from different segments of society. It is evident from the global Corruption Perception Index (CPI) annually published by Transparency International that the incidence of corruption as perceived by people is negatively related with the level of GDP of the countries. With a slowdown in GDP growth. low income countries tend to have more corruption as compared to the ones falling in the higher income categories.2%). taking the payload into consideration. there is no reason to assume that the level of corruption has gone up. medical services (20 percent). They would not have to work hard to point out other areas of failure of the present government and its policies on almost all fronts. judiciary (29 percent). some survey findings show interesting results. This is in line with the authoritative literature on corruption that emphasizes that the impact of the corruption is differential as it hurts the poor and the disadvantaged sections of the society more and favors the rich. the legitimacy of the state will also be jeopardized. which. This is what Marcus Walker wrote in his article published in the Wall Street Journal titled ―Tragic Flaw: Graft feeds Greek crisis‖. Greek tragedy and Pakistan (Part one) Jamil Nasir Analysts say that the underlying causes of the current Greek financial crisis are political cronyism. If this is the case. followed by registry and permit services (52 percent). which I will briefly discuss even at the cost of a bit digression from the main topic. corruption and culture of patronage has permeated our daily lives as well. The main findings of the survey have already been widely publicized in the media and need not to be repeated here for space constraints. However. According to Transparency International‘s (TI) survey titled ―Daily Lives and Corruption: Public Opinion in South Asia‖ released recently. According to the findings of the TI survey the highest proportion of the people in Pakistan reported that they trust nobody to fight 45 . and Marcus‘ information is correct. thereby meaning that those paying the bribes were otherwise entitled to the service but the same was delayed either due to complex and non-transparent bureaucratic procedures or due to overregulation or lack of accountability of the service providers or the combination of all. ‗Fekelaki‘ means ‗little envelopes of bribes‘ that pervade every Greek institution and without such envelopes it is exceedingly difficult for a Greek citizen to get a service. an increased level of corruption cannot explain these phenomena. we need to dive into the basics. which he is entitled to legally. The first result relates to the anatomy of the bribe payers with respect to gender. induce inefficiency in the economy. certainly holds. Findings suggest that the people in the high quintiles of income are more eager to pay bribe than those in the lower quintiles of income. Marcus says that many Greeks are of the view that the answer to the above posed question lies in two Greek words ‗fekelaki‘ and ‗rousfeti‘. The financial crisis that has gripped Greece is seemingly due to ballooning debts and unsustainable fiscal deficit. People become less optimistic about the future. ―Why does the state spend so lavishly but collect taxes so poorly?‖ is the key question that needs to be answered in a bid to understand the real causes that characterize the Greek financial turmoil. tax revenue (43 percent). If the perception prevails that growing inequalities are the result of the growing corruption. as a nation. utilities (49 percent). On the contrary. customs (50 percent). But in order to determine as to what led to the huge fiscal deficit in Greece. According to the survey. those highlighting an increase in corruption under the present government must look for other credible objections to build a case against it. About two thirds of them feel that corruption has increased in the last three years. corruption and a culture of patronage. bribery. Growing inequalities will threaten the social fabric of the society. This results in erosion of confidence in the government and its institutions. The writer is an economist (PhD from Cambridge University). ‗Rousfeti‘ means expensive political favors doled out by the political elite. The findings of the survey also suggest that in most cases bribery was paid to speed things up. 54 percent of Pakistanis are reported to have paid a bribe in their interactions with various public sector service providers in the last 12 months. in turn. Another policy implication is that the policies aimed at tackling poverty and inequalities will remain ineffective if corruption is not controlled simultaneously. 63 percent of the respondents rate police and the land administration as the highest corrupt departments. they are more idealistic in their outlook than males (my apologies to those who may think otherwise). Alternatively. then we. Disaggregated gender analysis shows that women were less likely to pay bribe than their male counterparts. The reasons for this may only be guessed as the survey report does not give any details (it is not supposed to). Thus the argument that the elite may perpetuate corruption in a society by design as it suits their interests. Another is with respect to income. Thus the underlying causes of the current Greek tragedy are linked to a deep-rooted culture of bribery and corruption. all these are results of the mismanagement of the economy. For example women are less exposed to public life due to peculiar socio-cultural norms of our society. need a serious introspection as bribery. and education (17 percent).and PIA are not performing. So. especially from the political elite.‖ Sohail Muzaffar. Maaksons. 2010. would discourage the potential invest on. Habib Rafique. ―This time. Transparency International advisor Adil Gilani said the military had been included ―to dispel the impression that our surveys are biased‖.The technical bids have been opened while the financial bids have not yet been made public. to address the complaints of bidders according to the requirement of rule-48 of Pakistan Procurement Regulatory Authority (PPRA). The scheme is located just four kilometers from Islamabad Club near the intersection of two 600-foot wide roads.3 billion contract of infrastructure works in Park Enclave.‖ he said. told AFP. Former CDA chairman Imtiaz Inayat Elahi while launching the project had claimed that it would be completed in a record period of time. the predominant majority believes that government leaders or media can make a difference in their fight against corruption. including underpasses. of which the authority short-listed four. `said CDA`s member planning Tahir Shamshad. with proper powers and authorizations. An insider said delay in documentation process for selection of the firm could put on hold the development work since the same had been witnessed in other residential sectors. bridges and residential sectors. But in order for them to do so. The CDA had prequalified four contractom. This finding is peculiar to Pakistan as in other South Asian countries. It is possible only through demonstration of strong commitment against the culture of corruption and cronyism. TI Pakistan chairman. `Kindly institute the committee comprising of odd number of persons. Park Enclave housing project would involve the construction of 700 houses in phase-I and another 600 in phase-K the cash starved CDA has offered 700 and 500-square-yard residential plots in the first phase. It also asked CDA Chairman Farkhand Iqbal to ensure that its officers did not violate PPRA rules. institutions are perceived to be corrupt and urgent steps of revolutionary nature are needed to regain the confidence of the people. ―Our land revenue and police departments are on top in corruption. He said it was for the first time that the CDA was awarding the contract on the basis of design and build proposals under which the successful bidder would have to prepare its own design and site plan and lay infrastructure facilities in the housing scheme. Transparency issues Pakistan corruption survey report Corruption watchdog Transparency International for the first time has included Pakistan‘s military in an annual survey.corruption.` the letter said. About 15 construction firms had applied for pre-qualification. Cosmetic changes and slogans will not work. But one thing is encouraging that 89 percent of the survey respondents believe that ordinary people can make a difference through their fight against corruption. `We have formed two separate committees. What are the implications? Simply. we have ranked the military according to popular response about corruption in it. a housing scheme launched in Zone-IV five months back. Next time we will have more comprehensive details. The delay. one for evaluation of contractors/bids and the second for opening of bids to ensure transparency. Bidding for housing project Transparency seeks probe into complaints The Transparency International has sent a letter to the Capital Development Authority (CDA) informing its bosses about serious objections raised by three contractors to prequalification criteria set for awarding the Rs. These three firms have executed mega uplift projects in Islamabad. The TI said the principal accounting officer of the CDA shall conduct administrative review under PPRA notification dated February 10. The judiciary is ranked fourth while military is in ninth position followed by the education department. the authority has been asked to form a committee to probe into the objections raised by Ghulam Rasool & Company. and re-advertised the tender to avoid charges of non-procurement if the complaint was found to be correct. which is possible by facilitating their access to political. on the findings of the complaints and take action in accordance with the conduct rules in the event of unfair and nontransparent procurement process. The Pakistan chapter of Transparency International reviews and ranks government departments according to the prevalence of graft in the system. This is the first sector the CDA has launched for private citizens after decades. ―It is public perception that others are more corrupt than the armed 46 . their real empowerment is a sine qua non. and the committee shall investigate and decide upon the complaint within 15 days of the receipt of the complaint. listing it as a notch more corrupt than the country‘s education department. he said. Mohammad Ayub Brothers and Matracon. Echowest and SKB and received their technical and financial bids. According to the TI letter. social and economic opportunities. Instead. the judiciary came in sixth. in Pakistan things were totally different. its decisions are far from being implemented. PIA. I should be given time some day to explain real story behind the TIP. Last year. Rampant corruption Transparency International Pakistan (TIP) has released a stunning survey. Mr. Although government functionaries spend much of their time paying lip service. most of the work in the revenue department was still being carried out manually. Therefore. Pakistan was no more on the watch list of countries where significant cases of human smuggling took place. The police force has fallen to the second position from first. The question is that if ministers and secretaries are found to be involved in corruption scandals. In its national corruption perception survey released at a press conference on Wednesday. When a legislator drew Mr. on and off they come up with such reports. These findings are a source of terrible embarrassment for the nation.‖ said Gilani. Mr. `he asked. there was no need to believe what the TIP had said in its report about corruption in various government departments. third. In an attempt to substantiate his argument and respond to questions of lawmakers.‖ he added. he said there were many loopholes in the existing law of evidence which was exploited by terrorists to get themselves freed from courts. he added. Malik said: `TIP is not a big gun. Be it NICL. In reply to a question. Malik`s attention towards the TIP survey report. KESC. WAPDA. Railways. Another federal minister returned millions of rupees to save his skin. he said. For example. remittances sent by overseas Pakistanis through legal means had reached over 11$ billion. but the government was making every possible effort to curb it. putting land administration at the top of the most corrupt government departments while police. it is just a non-governmental organization which works for its own vested interests. Speaking at a question-hour session in the National Assembly. Malik said after the FIA had taken action against people like Hanani and Kalia involved in illegal transaction of money. Malik threatens to expose corruption watchdog Interior Minister Rehman Malik severely criticized the Transparency International Pakistan (TIP) on Thursday for what he said working against the interest of the country and threatened to reveal `real truth` behind such organizations working. he said unlike the developed world where all departments were computerized on the basis of which the TI could prepare its report. fourth and fifth positions respectively. Yet another former federal minister is accused of accepting huge funds 47 . he added. When such organizations will say Pakistan is a corrupt country who will come here for investment. and education and military the least corrupt departments. Moreover. maintaining they respect the Supreme Court. therefore. taxation. has so far taken suo moto action in at least half a dozen cases of corruption and recovered billions of rupees plundered by those holding official positions. The ruling PPP and the opposition PML-N have differences over the bill.forces. the TIP had said that land administration and police were the two most corrupt. Malik said: `If the house agrees. ―Delay in case proceedings and punishment has heavily contributed to the development of a perception that the judicial system has also fallen prey to corruption. The Supreme Court starting with the NRO. after the education sector. `About corruption in the Federal Investigation Agency. judiciary and the power sector occupy second. taxation climbed up by five places from last year‘s eighth. Over the past four years. In addition to this. The same minister has gone so far as to accuse the Prime Minister‘s son of accepting a very expensive automobile as graft. Steel Mills. `Some people and organizations don`t wants foreign investment coming to the country and. the government has chosen to adopt a defiant attitude. `I strongly request this house to adopt necessary amendments to make the law of evidence an effective tool in the hands of lawenforcement agencies. the government had terminated some 40 employees of the FIA who were found guilty of serious dereliction of duty. he said. the officials concerned have ruthlessly looted the national wealth. the minister said he did not rule out corruption in the agency. the TIP has observed that the military is least corrupt. then who will guard the guards? A federal minister and a director general Haj are languishing in jail on serious charges. judiciary moved to the fourth position as compared to last year‘s sixth and the power sector improved by two positions to end up at fifth. The minister urged the legislators to approve a bill seeking setting up of a powerful national accountability commission. Mr. Similarly.5 percent of its GDP on education. Universities are being ranked for the first time. 2. Among other countries having higher accessibilities are Turkey (38 percent). Javaid R Laghari Creation and application of literacy.000 passing HSSC. two universities are now among the top 300 technology universities of the world. while 85 quality enhancement cells established at the universities are working to improve quality of education. More focused on the adult population. Eleven accreditation councils are functioning and focusing on improved curriculum. Pakistan spends only 1. Iran (36 percent).7 percent in class 1 to 3. This is lower than Ghana‘s at 9 percent and Cameroon‘s 11 percent. with 1.6 million in SSC and 1.2 million in secondary schools. on higher education alone. which is quite an achievement. 5. Over 1. Even though the Pakistan Education Policy 2009 plans to increase accessibility to 10 percent by 2015. Enrolment figures according to the Economic Survey of Pakistan 2010-11 show about 19 million are enrolled in primary schools.5 percent. The number of adult illiterates is actually rising. failed to achieve the MDG in education. The Pakistan Education Task Force 2010 reports that one-third of primary age children are not in school.000 enter degree colleges. Finland at 94 percent and Israel at 60 percent. colleges and universities! The only real difference is in the domain of higher education. only about 100. We‟re killing education-Opinion Dr.03 percent. In the last five years.7 percent of GDP on education. Out of 600. India is spending 3. a recent study by AKU IED found that around 70 percent of teachers teach for only 15 minutes in a 35-minute period. And yet the president. education and knowledge through higher education is not one and the same thing. On the other hand.3 percent in class 10. India is at 15 percent and increasing due to its heavy funding of higher-education.22 percent of the GDP (about 13 percent of the total education spending) goes to higher education. Pakistan falls significantly behind many countries in literacy. respectively. literacy has risen by only 3 percent to 58 percent. Pakistan‘s commitment to the higher education sector was scaled back by 10 percent this year while India has raised its higher-education budget by 25 percent. This federal allocation through 48 .2 million in HSSC. Pakistan‘s share of research publications worldwide has gone up three-folds in the last eight years. It also reports that 35 percent of those children who do attend school and make it to grade 3 cannot do single-digit subtraction. and as a result of these reforms. Education. This reduction in the HEC budget was in addition to the 40 percent cut imposed last year. and will not be able to achieve the MDG of 100 percent literacy by 2015. The examples of governance go from bad to worse. only 0.for granting contracts to a foreign firm for producing electricity. while another 200.000 are admitted as private students and distance students. and therefore will probably reach 60 percent by 2015. The Education for All (EFA) Development Index ranks Pakistan at 118 out of 129 countries. Literacy in Pakistan amounts to someone‘s being able to read a newspaper and write a simple letter in a language. claimed having implemented 80 per cent of his party manifesto and the Prime Minister speaking on the floor of the National Assembly declared that all his pledges for the welfare of the people had been fulfilled. which falls within the jurisdiction of the provincial governments. universities and campuses have opened in farflung areas and new academic programs and technologies have been introduced.000 enter universities and 180. the government has reduced HEC funding. or $11. Within this already reduced pie for education. or less than half of what Vietnam‚ Malaysia‚ Thailand‚ and Indonesia spend. Only six countries in the world spend less than Pakistan does on education. The Annual Status of Education Report 2010 shows drastic reduction in school enrolment from 16. in his speech at Garhi Khuda Bukhash.5 billion. and that more than half the children surveyed could not read even Urdu or a local language properly. An unsettling claim to have made given the state of affairs. About 4.400 HEC scholars have completed their PhDs and joined the universities. Accessibility to higher education in Pakistan for age-group 17-23 is still among the lowest in the world. Also. Malaysia (32 percent) and Indonesia (21 percent). about 7. There are just not enough room at schools. and to 15 percent by 2020.8 percent. which has now been devolved.000 ―ghost schools‖ exist in Sindh alone. South Korea enjoys among the highest accessibility at 98 percent. the Prosperity Index ranks Pakistan at 105 out of 110 countries in the education category. and 10 percent teach for less than five minutes. respectively. HDI 2011 ranks Pakistan 145 (out of 187 countries) showing gross enrolment ratios for primary and secondary education at 85 percent and 33. The NCHD. is in a sorry state of affairs in Pakistan. Despite scarcity of funding. Nine new prestigious IITs have been established in the last three years in addition to the seven original ones. Email: jlaghari@hec. Psychologists and linguists studied the language and word choices of subjects in controlled experiments and found predictable differences between truthful and deceptive statements. on the other hand. Transparency places military on its list for the first time Corruption watchdog Transparency International has for the first time included Pakistan‘s military in an annual survey. listing it a notch more corrupt than the country‘s education department. TI Pakistan chairman. grammar and syntax a subject uses to describe an event to detect any anomalies. such as eye contact and hand movement. The army is widely considered perhaps the most professional institution in Pakistan. The manager had reported a similar robbery at the restaurant about six months earlier. Susan Adams. Recently. investigators can apply it to written as well as oral statements. Transparency International adviser Adil Gilani said the military had been included ―to dispel the impression that our surveys are biased. The Pakistan chapter of Transparency International reviews and ranks government departments according to the prevalence of graft in the system. Because text analysis evaluates only the subject's words. to investigate whether the manager is filing false police reports to cover his thefts.‖ Sohail Muzaffar. and a strong and centralized UGC. International News ACFE News (www. Text analysis. You begin your investigation by asking the manager to write a description of the evening's events. No other witnesses were present at either alleged robbery. The manager said the gunman had stolen the entire day's cash receipts — a little more than $4. an instructor who taught text analysis (which 49 . DETECTING ANOMALIES Linguistic text analysis involves studying the language. a FA/CFE.000. and in some cases providing up to 80 percent of the university budgets. gov.‖ he added. The restaurant owner learns from police investigators that armed robbery is extremely unusual in the surrounding neighborhood. Pakistan must invest foremost in education with renewed vigor.pk. The writer is chairman of Pakistan‘s Higher Education Commission. considers only the subject's verbal behavior. the Indian cabinet approved setting up the National Commission on Higher Education and Research (NCHER).‖ he said. we have ranked the military according to popular response about corruption in it. India has a Knowledge Commission headed by a world-renowned expert serving as an adviser to the Prime Minister. Experienced investigators are accustomed to studying interview subjects' nonverbal behavior. following the HEC Pakistan model. the owner knows that the manager's wages have been garnished for the last year for nonpayment of child support. Any other direction will be suicidal for Pakistan‘s education. Here are ways to detect possible deception in written and oral statements. ―This time. while the HEC must be supported to raise Pakistan‘s knowledge workers‘ level to world standards. told AFP. ―Our land revenue and police departments are at the top in terms of corruption. Text analysis is based on research originating in the 1970s.com) The 10 Tell-Tale Signs of Deception the Words Reveal Suspects and witnesses often reveal more than they intend through their choices of words. In fact. India‘s political leadership is sending out all the right signals.acfe. The manager of a fast food restaurant calls the police late at night to report that an armed robber had entered the restaurant while the manager was alone in the office finishing some paperwork. Next time we will have more comprehensive details. The judiciary is ranked fourth while the military is in ninth position followed by the education department. ―It is public perception that others are more corrupt than the armed forces. Also. The owner hires you.the UGC is in addition to the states financially supporting university budgets. a ministry of human resource development. many investigators prefer to analyze suspects' written statements for signs of deception before conducting face-to-face interviews. The lower education must focus on improving quality. One common method of dodging questions is to respond with a question of one's own. you try to identify all the outstanding checks and deposits in transit." This brief statement contains the pronoun "I" four times in three sentences. Consider this statement by a husband who claims his wife was killed accidently: "I picked up the gun to clean it. a guy jumps out of the bushes and yells at me. When I stopped the car and rolled down my window." The first three sentences describe the employee's drive to the bank in the past tense. One way to reduce self-references is to describe events in the passive voice.000 in cash was stolen before she could deposit it at the bank (I have emphasized certain words. The statement also contains few personal possessive pronouns." Another way to reduce self-references is to substitute the pronoun "you" for "I." The husband acknowledges in the first sentence that he picked up the gun. altering or fabricating information. Deceptive people sometimes refer to past events as if the events were occurring in the present. The last I saw him he was headed south on Elm Street. Lack of self-reference Truthful people make frequent use of the pronoun "I" to describe their actions: "I arrived home at 6:30. Deceptive people often use language that minimizes references to themselves." "The shipment was authorized" rather than "I authorized the shipment.): "After closing the store. Investigators should pay particular attention to points in a narrative at which the speaker shifts to inappropriate present tense usage. TEN SIGNS OF DECEPTION 1. Secondly. The phone was ringing as I unlocked the front door. Something bumped the trigger. Answering questions with questions Even liars prefer not to lie. then drove to the bank and called the police from the bank parking lot to report a phony theft. "something" rather than "I" bumped the trigger. (See another example in "Antics with Semantics" at bottom.she called statement analysis) at the FBI Academy for many years. Verb tense Truthful people usually describe historical events in the past tense. Describing past events using the present tense suggests that people are rehearsing the events in their mind. In the third sentence. I entered the parking lot and drove around back to the night depository slot. I talked to my mother for 10 minutes before noticing that my TV and computer were missing from the living room.) 3." Question: "Can you tell me about reconciling the bank statement?"Answer: "You know. It was raining hard so I had to drive slowly. Moved it to the left hand to get the cleaning rod. I called the police on my cell phone and reported the theft. Consider the following statement made by an employee claiming that a pouch containing $6. The witness refers to "the" gun and "the" left hand where we might expect "my" to be used. I put the cash pouch in my car and drove to the Olympia Bank building on Elm Street. I can see he has a gun. October 1996). investigators determine what is typical of a truthful statement. "The safe was left unlocked" rather than "I left the safe unlocked. Before answering a question with a lie. a deceptive person will usually try to avoid answering the question at all. "I" has been omitted from the beginning of the sentence. Outright lies carry the risk of detection. After he was gone. The following section describes deviations that suggest a subject may be withholding. they look for deviations from the norm. But the next three sentences describe the alleged theft in the present tense. hitting my wife. An alert investigator might suspect that the employee stole the day's cash receipts. He grabs the cash pouch and runs away. First. so I walked straight to the kitchen to answer it. deceptive witnesses sometimes simply omit self-referencing pronouns. Investigators should be alert to responses such as: "Why would I steal from my own brother?" "Do I seem like the kind of person who would do something like that?" "Don't you think somebody would have to be pretty stupid to remove cash from their own register drawer?" 50 . 2. described it as a two-part process ("Statement Analysis: What Do Suspects' Words Really Reveal?" FBI Law Enforcement Journal. The gun went off. But the second sentence is grammatically incomplete. but sometimes when you're really busy you just post the differences to the suspense account." In oral statements and informal written statements. Wendell Rudacille. Noncommittal verbs are: think. they try very hard to convince interviewers that what they say is true. maybe." 7. sort of." Did the employee back up her computer? Did she copy her files onto the network drive? Did she put her papers in the desk drawer? Did she lock the customer list in the office safe? The employee alluded to all these actions without saying definitively that she completed any of them. perhaps. Deceptive subjects often use mild oaths to try to make their statements sound more convincing. 1994). Equivocating adjectives and adverbs are: sort of. about. a deceptive person wants to minimize the risk that an investigator will discover evidence contradicting any aspect of his or her statement. and our memories store dozens of facts about each experience — the new shoes we were wearing. guess. At least some of these details will show up in a truthful subject's statement. guess. Last Tuesday. believe. the woman at the next table who reminded us of our thirdgrade teacher." "borrowed" instead of "took. suppose." "on my honor. refers to seemingly inconsequential details as "tangential verbal data" and considers their presence to be prime indicators that subjects are telling the truth. 8. An attentive investigator should not assume that subjects perform every action they allude to. could. 51 . approximately. Oaths Although deceptive subjects attempt to give interviewers as little useful information as possible. mainly. Plus. Statements made by guilty parties often include mild or vague words rather than their harsher. some of which may not even be relevant to the question asked. Vague qualifiers are: you might say. Vague statements and expressions of uncertainty allow a deceptive person leeway to modify his or her assertions at a later date without directly contradicting the original statement. Lack of Detail Truthful statements usually contain specific details. 5. figure." and "warned" instead of "threatened. Euphemisms Many languages offer alternative terms for almost any action or situation. This happens because truthful subjects are retrieving events from long-term memory. more or less. Equivocation The subject avoids an interviewer's questions by filling his or her statements with expressions of uncertainty. perhaps. Deceptive people are more likely than truthful people to sprinkle their statements with expressions such as: "I swear. more explicit synonyms. almost. assume." "cross my heart. the song that was playing in the background. I decided to copy my files onto the network drive and started putting my papers in my desk drawer. Euphemisms portray the subject's behavior in a more favorable light and minimize any harm the subject's actions might have caused. I also needed to lock the customer list in the office safe. maybe. the author of "Identifying Lies in Disguise" (Kendall/Hunt. Alluding to actions People sometimes allude to actions without saying they actually performed them. the better." Truthful witnesses are more confident that the facts will prove the veracity of their statements and feel less need to back their statements with oaths. Few liars have sufficient imagination to make up detailed descriptions of fictitious events. weak modifiers and vague expressions. 6. about.4." "as God is my witness. Those who fabricate a story. tend to keep their statements simple and brief. the fewer facts that might be proved false. Investigators should look for euphemistic terms such as: "missing" instead of "stolen. Consider the following statement from an employee who was questioned about the loss of some valuable data: "I try to back up my computer and put away my papers every night before going home. might. Investigators should watch for words such as: think." "bumped" instead of "hit. however. the conversation that was interrupted when the fire alarm rang. promised Wednesday to move aggressively to coordinate investigations into the causes of the subprime mortgage market meltdown. critical event and aftermath. All of a sudden." he said. it may be padded with false information. "There have been investigations going on in various states and branches of the federal government.e." 2009). Narrative balance A narrative consists of three parts: prologue.9. After the light turned green. The claimant did not describe the other vehicle. who was tapped by President Obama to co-chair a new state and federal mortgage crisis unit. important information may have been omitted. The aftermath describes what happened after the critical event. filed with an insurance claim. But the description of the critical event (i. 10. "We‘re now making a 52 . Eric Schneiderman. Investigators should apply extra scrutiny to written or oral statements that deviate from these norms. The other driver didn't stop. the alleged accident) is suspiciously brief. and the location of the accident. When people feel anxious about an issue. A claims adjuster receiving such a statement would be wise to investigate whether the policyholder concocted a phony hit-and-run story to collect for damages caused by the driver's negligence. "We‘re undertaking a more coordinated effort to pull together all of the various strands of investigations relating to the conduct that created the mortgage-backed securities bubble and led to the market crash. The aftermath is also shorter than one would expect from a complete and truthful account of a two-car accident. The claimant does not say which direction the other vehicle went after leaving the scene of the accident. In a complete and truthful narrative. Mean Length of Utterance The average number of words per sentence is called the "mean length of utterance" (MLU). The critical event is the most important occurrence in the narrative. 40 percent to 60 percent critical event and 25 percent to 35 percent aftermath. they tend to speak in sentences that are either significantly longer or significantly shorter than the norm. I moved slowly into the intersection. only one sentence describing the critical event. is suspiciously out of balance: "I was driving east on Elm Street at about 4:00 on Tuesday. The traffic light at the intersection of Elm and Patterson was red. If one part of the narrative is significantly shorter than expected. so I came to a complete stop. critical event and aftermath. Truthful statements generally contain numerous self-referencing pronouns and include at least a few seemingly inconsequential details. Eric Schneiderman promises aggressive financial fraud probe New York Atty.. The prologue contains background information and describes events that took place before the critical event. so I drove home and called my insurance agent. "Analyzing Written Statements for Deception and Fraud. which direction it came from. The MLU equals the total number of words in a statement divided by the number of sentences: Total number of words / Total number of sentences = MLU Most people tend to speak in sentences of between 10 and 15 words (ACFE Self-Study CPE Course. The following statement. how fast it was going. and only one sentence of aftermath. the balance will be approximately 20 percent to 25 percent prologue. equivocation or euphemisms. whether the driver braked to try to avoid the accident or how the two vehicles made contact. Investigators should pay particular attention to sentences whose length differs significantly from the subject's MLU. I was on my way home from the A&P supermarket. THE WORDS REVEAL Complete and accurate descriptions of actual events are usually stated in the past tense and tend to have a predictable balance of prologue." Schneiderman told reporters in Washington after an event at the Consumer Financial Protection Bureau. the driver's destination. If one part of the narrative is significantly longer than expected." The subject's statement contains four sentences of prologue. Truthful statements rarely contain oaths. Gen. He does not mention getting out of his vehicle to inspect the damage nor does he say whether he spoke to any people in the area who may have witnessed the accident. a car ran into me. Suspects and witnesses often reveal more than they intend through their choices of words. The prologue contains a credible amount of detail: the day and time of the accident. one of Stanford‘s court-appointed lawyers.S.‖ ―How did Mr. "Our working group is focusing on the conduct related to the pooling and creation of mortgage-backed securities. U.‖ a U. the SEC urged a judge to order the federal Securities Investor Protection Corp. Scardino and defense lawyer Ali Fazel have previously said they will use the records of Houston-based Stanford Group Co.‖ Stanford. told the jury in his own opening remarks. Obama announced the new effort in Tuesday's State of the Union address. Stanford also ―waved his magic wand‖ to increase the value of an unimproved island 53 . Stanford stole from investors ―so that he could live the lifestyle of a billionaire." he said. about whether his bank ever loaned those proceeds and about who was managing their money. "This new unit will hold accountable those who broke the law. told the jury yesterday. the defense has said. the after-effects of a jailhouse beating and a subsequent prescription-drug addiction. Prosecutor Says R.term fraud scheme and lied repeatedly to investors to ―live the life of a billionaire. Allen Stanford engaged in a long. Gen.the conduct that created the crash. while he was actually pulling money out. Securities and Exchange Commission probe. would go after "every aspect of the conduct that created the bubble and crash.S. Stanford Told „Lie after Lie‟ to Investors. „Real‟ Empire ―Mr. part of the existing federal Financial Fraud Enforcement Task Force.S. "The multi-state talks all relate to post-crash conduct.‖ Assistant U.‖ The scheme stretched over 20 years of ―lying." An earlier version of this post said New York Atty. to prove their client never intended to defraud anyone." including the origination of mortgages and the packaging of them into securities. Gen. including three alternates. In Washington yesterday. prosecutor told jurors as the financier‘s criminal trial started in Houston. He‘s also charged with conspiracy to commit mail fraud and wire fraud and to obstruct a U. Eric Schneiderman will lead a new Financial Fraud Enforcement Task Force to coordinate investigations into the mortgage crisis. cheating and bribing. 61. and Antigua-baed Stanford International Bank Ltd. These are abuses in the foreclosure process.S.. said in a 14-count indictment accusing him of mail fraud and wire fraud crimes that carry maximum sentences of 20 years in prison. His trial was postponed three times because of changes to his legal defense team." He said the new unit..‖ Stanford lied to depositors about the liquidity of their investments. Along with California Atty. The unit will be part of the existing federal Financial Fraud Enforcement Task Force. Schneiderman said Wednesday that the new unit's efforts shouldn't affect the foreclosure settlement talks because those investigations deal with conduct that took place after the housing market collapsed. Costa called the $7 billion in deposits once held by Stanford‘s Antigua bank ―a real number. Schneiderman and several other attorneys general have balked at the ongoing talks between state officials and large mortgage servicers to settle investigations into foreclosure process abuses. Stanford‘s financial empire was real and did make a lot of money and did pay every penny of what was owed to depositors for 22 years. The financier lied about committing $700 million of his own money to shore up the bank‘s finances in 2008. „Compound Fraud‟ ―You‘re going to see the power of compound fraud. ―He told them lie after lie after lie. Costa said. was the ringleader of a $7 billion investment fraud the U. Stanford. Attorney Gregg Costa said in his opening statement in the Houston courtroom. wearing a light gray plaid suit and a white dress shirt and no necktie.‖ Robert Scardino." Obama said. Schneiderman will co-chair a new unit focused on mortgage-backed securities abuses leading up to the housing market bust. Schneiderman has been one of the most aggressive state attorneys general in investigating the actions of financial firms and others leading up to the housing bust. to create a claims process for Stanford‘s alleged victims. ―I plead not guilty to every count. Stanford has been in federal custody since being indicted in June 2009. speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans. Harris.‖ he said.concerted effort to pull everything together and move forward aggressively to address these issues. No investor lost money until the SEC sued Stanford and obtained a court order to take control of his businesses in February 2009.S. the prosecutor said. Kamala D.‖ Costa told the jury of 10 men and five women. ―That‘s where the lying comes in. Stanford get so many people to give him so much of their savings?‖ Costa asked. not the abuses that happened after the fact. The bank‘s CDs were sold only in tranches valued at $50. he said. a nonprofit corporation funded by the brokerage industry.000 or more. ―this one was legitimate. The trial may last about six weeks. two accountants. Stanford‘s failure to take the stand would breach that promise.S. he said. Investors and their advocates in Congress say SIPC is deliberately taking a narrow view of the law to protect brokers from higher assessments. Unlike frauds in which money from later. Costa told jurors they would hear from investors who lost their life savings. to start a liquidation proceeding in federal court in Texas to handle more than $1 billion in possible claims related to the alleged Stanford fraud.‖ he said. 23 at Houston‘s Bob Casey Federal Courthouse with U. He said the jury may hear from his client during the trial. attorney who has been following the Stanford proceedings. After SIPC balked. an environmental engineer. a Fort Lauderdale.000. SEC lawyers asked U. District Judge David Hittner‘s interview of 80 prospective panelists. SIPC. The financier is accused of bribing his now-dead auditor and an Antiguan banking regulator who received cash. An opening statement is tantamount to the making of a promise to the jury. told the judge during a three-hour hearing. the SEC for the first time sued the group in federal court in Washington. Hittner said. District Judge Robert Wilkins during a hearing yesterday to require SIPC. The 15 men and women selected yesterday include a retail optician. Jury Selection Jury selection began Jan. a land surveyor. without being more specific. Nurik said Stanford might be pressing his lawyers to let him testify. Stanford‘s lawyer told the panel that the certificates of deposit sold by the Stanford bank weren‘t securities and that Stanford‘s clients had no say over how their money was invested. Stanford isn‘t required to take the witness stand. what we‘re seeking here is to provide a forum where claimants can seek judicial review of their claims. Individual Investors 54 . In Washington. Florida.‖ Scardino said.arriving investors is used to pay off earlier speculators. National Football League Super Bowl championship tickets and use of Stanford‘s private jets. called the defense decision to hold out the prospect of Stanford‘s testimony a risk.the same maximum amount it offers in any case. Judicial Review ―Ultimately. These witnesses will tell ―how his lying stealing and bribing have taken that money and the dreams they had with it.‖ Marc Nurik. many of whom said they had read or heard reports about the case and some of whom told the judge they didn‘t know if they could be impartial.property from $63 million to $3 billion during the worst economic downturn since the Great Depression. a congressionally chartered group that insures customers against losses caused by broker theft.S.S. a chef.‖ Matthew Martens. At issue is whether more than 7. a pawn broker and a retired hairdresser.000 brokerage customers who invested in the alleged Ponzi scheme run by Stanford are entitled to have their losses covered by SIPC. He said Stanford invested more than $100 million to improve the island and obtain licenses that made the property more valuable. a kindergarten teacher. says the Stanford investments don‘t fit into the confines of the federal law that governs who‘s eligible for the payouts. The defense lawyer called his client ―a Texas boy‖ and ―a very resourceful businessman‖ who became a billionaire. Scardino called those CD purchasers ―sophisticated investors‖ whom he said ―know what a CD was and what it wasn‘t.000 for each Stanford client -. didn‘t have full access to Stanford‘s business records and wasn‘t presenting ―a complete picture‖ of his client‘s business. ―We‘re going to prove this was not a Ponzi scheme at all. according to the prosecutor. to investors with either a net worth of more than $1 million or an annual income of more than $200. the SEC ordered SIPC to start a process that could grant as much as $500.‖ „Legitimate‟ Business They also received promotional materials from Stanford‘s business disclosing that past performance was no guarantee of future success and that an investor could lose the entirety of an investment. the defense lawyer said. In June. the SEC‘s chief litigator. ―The traditional wisdom is that you don‘t set up for failure.‖ ‗Complete Picture‘ Scardino told jurors the U. Outgoing SFO Director calls for an offence of "recklessness" The work of the SFO in reducing financial crime could be improved if "recklessness" was introduced as an offence. SIPC‘s president. v. District of Columbia (Washington). In addition to the cash permanently stripped from criminals.imlpo. The list of equivalent countries had not been updated since it was introduced and the criteria for countries being on the list was not clear to firms and others. More on the Reuters website here. Met seizes record cash haul in 2011 The sum of £26.000 for failing to make "reasonable" enquiries before being ordered to sell the firm's shareholding in Punch Taverns. European Commission publishes update on third country equivalence The UK has worked closely with other EU Member States to review and update the Common Understanding on Third Country Equivalence.SIPC is responsible for providing coverage for individual investors who lose money or securities held by insolvent or failing member brokerage firms. has said that SIPC shouldn‘t get involved in the Stanford case because investors received actual CDs after the brokerage passed their money to a bank. Switzerland amends law to allow exchange of financial information Switzerland has amended its law to allow it to exchange more financial data to help in the international fight against money laundering and the financing of terrorism. The criminal case is U. District Court. SIPC doesn‘t guarantee an investment‘s value or protect against fraud. In addition the European Commission now publishes the criteria and the list itself on their website here. More on the Money Marketing website here. 09-cv-00298. HSBC in new US money laundering enquiry HSBC. Stanford International Bank Ltd. Stanford. U. which has been progressively reducing its US exposure. a group of government agencies that aims to improve co-operation to root out money laundering and terrorist finance. he told a court-appointed receiver in 2009. Switzerland. More on the FT Adviser website here. after the regulator found he had not made any enquiries into whether the call had been made because of the receipt of insider information.S. District Court. the outgoing director Richard Alderman has said. It also doesn‘t cover investments with offshore banks or non-member firms. The subcommittee could hold a hearing and report this spring. the agency said in court papers. Stephen Harbeck. Securities Investor Protection Corp. The Institute of Money Laundering Prevention Officers (www. The civil case against Stanford is Securities and Exchange Commission v.000 The FSA has fined Greenlight Capital trader and compliance officer Alexander Ten-Holter £130. What happened after that isn‘t under SIPC‘s purview because the Stanford account holders have possession of their securities.5 million is the largest amount of cash seized in London in a single year since the Proceeds of Crime Act (POCA) 2002 came into force. is the subject of an investigation by the Senate Permanent Subcommittee on Investigations.S.S. under fire for its rigid laws protecting financial privacy. 11-mc-00678. The criteria for deciding which countries should be on the list has now been updated and a process introduced for reviewing and updating the list on a regular basis. Northern District of Texas (Dallas).. U. had been warned it faced suspension from the Egmont Group of Financial Intelligence Units. It has agreed to cover losses sustained by victims of Bernard Madoff‘s multibillion-dollar Ponzi scheme and investors who may have lost money in the October collapse of commodities broker MF Global Holdings Ltd. U.com) (Latest AML & Financial Crime News) FSA fines former compliance officer £130. It represents a 33% rise in cash seized in London compared with 2010. Southern District of Texas (Houston). District Court. The SIPC case is Securities and Exchange Commission v. It is conducting a money-laundering inquiry.. He has also been banned from performing compliance and oversight and money laundering reporting functions. More on the Independent website here. 09-cr-00342.S. a further £28 million is subject to 55 . Institutional investors concerned by SFO's warning on bribery & corruption Institutional shareholders and lawyers have reacted with alarm to the agreement by Mabey Engineering Holdings to repay dividends worth that amount "won through unlawful conduct" by a subsidiary deal. ensuring integrity and justice. The probe centers on claims as much as £50million of British and American taxpayers' money is thought to have been paid in exchange for engineering works at an Afghan airbase. TI-Ro study shows that exposure of some cases in courts is not an appropriate treatment for corruption because it recurs. corruption at the detriment of society. Four arrested in investigation into money laundering and corruption in the UK armed forces Three former British military officers have been arrested in the biggest-ever Armed Forces corruption probe. More on the FT website here.or representatives of public institutions. managed either by the control institutions media and civil society. political parties and the business climate are the main contributors to widespread corruption in Romania.3 million to Cash Forfeiture Orders awaiting forfeiture under the Proceeds of Crime Act 2002. Excessive politicization of public positions and discretionary allocation of public resources by interest groups are the main reasons that led to these conclusions. This year. by default. promoted on the basis of objective criteria. More on the Daily Mirror (!) website here. TI Ireland runs the country‘s only free 56 . respecting the normal legislative process. will the country's government resonate with the wishes of citizens. It is also imperative to adopt and implement an integrated anti-corruption strategy that addresses the vulnerabilities of all the pillars. Transparency Ireland urges employers to protect whistleblowers Transparency International Ireland is calling on employers to show leadership in protecting workers who speak up in the public interest. impoverishes. affects the health. generating private benefits and.transparency. The anti-corruption group says recent coverage of the treatment of whistleblowers on RTE radio‘s Liveline program reveals only the tip of the ice-berg of a problem which leaves whistleblowers exposed to retaliation from employers. misinforms. Transparency International Romania recommended that horizontal priorities relate to the adoption of all rules of the game in a transparent manner. For an effective approach to strengthen the National Integrity System. denies access to justice and public services. Whether we refer to political leaders . Romanians have become aware of the effects of corruption on their quality of life and decided to take action. Corruption restricts freedom. or.com here. Transparency International News (www. ensuring responsibility and accountability. Study on National Integrity System. More on info4security. because it was accompanied by a warning that the SFO planned to make wider use of civil recovery against investors in companies found guilty of criminal wrongdoing. based on solidarity and courage. after debate and participatory process and only after impact analysis and necessary parliamentary review. Elimination of corruption in all sectors of society is therefore imperative and urgent.org) Romania National Integrity System – Fail in the test of resistance to corruption Public administration.national or local level . third edition. but causes is needed. respecting democracy and transparency. approved by a London court on Thursday. selective and very limited transparency makes liability mechanisms inefficient. released today by Transparency International Romania (TI-Ro) shows that the Romanian institutions do not have the necessary resources and are not independent enough to resist political or group interference. a former Army reservist and a British businessman are among those to be questioned over an investigation into money laundering and corruption. appearing as the most vulnerable pillars in the national integrity system analysis. This way only. In the context of elections this year. more than ever. but a systematic reform that would create "antibodies" institutional corruption and not just treat symptoms. but also the quality of democracy. people have lost confidence that they could be held liable. the poor performance of these pillars threatens not only public funds and the economy. and degrades the education and future of young people. Two key ex-RAF personnel.Confiscation Orders and £16. Also. it can lead to social destabilization. Whether in a Europe hit by debt crisis or an Arab world starting a new political era. The agency has also questioned ―whether there is a real commitment‖ to encouraging people to come forward in reporting wrongdoing. the public sector and church. In addition. has stated that the Government‘s current approach to whistleblower protection is deeply flawed and that the current ―piecemeal approach to introducing protection for whistleblowers may have created confusion‖. Almost all the institutions examined are well-equipped with personnel and financial resources. the anti-corruption measures put in place. the 14th January 2012. A TI Ireland report on whistleblower protection in Ireland published last year found that while safeguards had been included in individual pieces of legislation. in Bucharest. The generalized corruption that has dried out public resources as well as the government‘s lack of transparency are the main causes which have led to a worsening of the quality of life which generated the manifestations taking place the past few days throughout the country. 84 recommendations for more integrity: Transparency Germany presents its National Integrity System assessment for Germany The anti-corruption organization Transparency Germany today released its National Integrity System assessment for Germany. ―The government has committed itself to a single law protecting people who come forward to report wrongdoing. which we see as long overdue given the succession of scandals that have emerged from our banks. no state or non-state body is limited in its independence to an unacceptable degree. while the only state agency that provides blanket guarantees to whistleblowers is FÁS. all of which can be avoided via honest and open dialogue. we call upon the protesters to refrain from any type of violence which must be avoided at all costs so that it does not degenerate. the Standards in Public Office Commission.‖ said Huguette Labelle. abuse of power or corruption. 57 . and their overall contribution to the fight against corruption in Germany. In order to prevent the distortion of the democratic instrument of protest. ―This year we have seen corruption on protestors‘ banners be they rich or poor. Protest manifestations require dialogue not violence Transparency International Romania reproves all violence regardless of the party they were initiated by during the street manifestations occurring yesterday. Lack of transparency in the elaboration of public policies with a view to favoring certain interest groups can no longer be concealed under image or intimidation operations directed at the civil society or the mass media.‖ ―We will welcome any new law that offers full protection to whistleblowers across the private and public sectors and any future law should clearly place the onus on employers to show that they have not retaliated against employees who speak up. The report examines the current state of anti-corruption reform in the Federal Republic of Germany. The federal structure of Germany provides numerous control mechanisms that can prevent abuses of power. basing its assessments on their financial and personal resources.‖ he said. Transparency International Romania believes it is the duty of public authorities to start a dialogue in order to identify solutions that can lead to social peace. popular unrest. says many callers to the Speak Up service are whistleblowers who fear that if they share their concerns with their employers they may lose their jobs. manifestations. However. people across the public and private sectors can still face legal and disciplinary action for honestly reporting concerns to their employers or the authorities. employers do not need to wait for a whistleblower protection bill to be introduced – we would urge all employers to show leadership in protecting workers who speak up in public interest. The cost of silence to Irish society is incalculable. John Devitt. Germany generally receives goods to very good marks for the prevention and punishment of corruption. Chair of Transparency International on 1st December 2011. leaders must heed the demands for better government. It rates 13 institutions. The authorities in Britain and Northern Ireland have offered blanket protection to employees there under a single whistleblower law since 1998.‖ The State ethics watchdog.helpline which provides confidential information and guidance to people facing ethical dilemmas or reporting concerns about possible fraud. ―Our helpline volunteers are dealing with distressed callers who wish to speak up in the public interest but are unsure of their rights and responsibilities and what protection is in place for them. There is no legal safeguard for employees in the banking sector. Its chief executive. Arbitrary elaboration of public policies has resulted in economic deterioration of the country and infringement of the rule of law principles. In passing the sentences.b. Robert Storey (d. The false documents were presented to EFG Private Bank in order to support a loan application on behalf of Michael Shephard. "lured into it by the dominating nature of Shephard.o. Belgium Barry Smith (d. 04/07/44) of Windlesham. over the period 2001 to 2009. (Michcon de Reya) to risk of loss. HHJ Wood QC said of Shephard. Charges were brought against all three in June 2009. Mukul Chawla QC for the Crown stated that this case was simply about greed and "the abuse 58 .b. Hampshire. Sakhalin Island (Russia). Three conspirators have been sentenced for their roles in defrauding EFG Private Bank of Zurich of €22 million through a loan application that was supported by a false claim in 2008 that over £76 million was held on deposit at a Guernsey bank as security.o. and was supported by Warwickshire Constabulary. 19/04/40) of Hindhead.sfo.o. Additionally he was found guilty of fraud contrary to section 1 of the Fraud Act 2006 in that he exposed another. Engaged by him to assist in the dishonest venture. He pleaded guilty in November 2010 and entered into a SOCPA agreement to give evidence at the trial of Steele. 01/02/47) of Hook. to conspiring to use false instruments contrary to section 1(1) of the Criminal Law Act 1977 and section 3 of the Forgery and Counterfeiting Act 1981. the jury could reach no verdict on the charge he faced. (who has previous convictions for dishonesty) "This was a very serious escalation in your criminal activity where you corrupted other people. Hampshire Philip Hammond (d. With regard to a fifth defendant.uk) Three jailed for a €22 million forgery fraud on a Swiss bank Mr." The judge said of Steele. Shephard and Pattinson pleaded guilty ahead of trial. 08/11/73) of Preston was sentenced on 6 January to 18 months' imprisonment. Mr Shephard. Amounting to around £70 million. Steele has no previous convictions for dishonesty.gov. He pleaded guilty in September 2011. he abused his position as partner in a law firm in which he was expected to protect the financial interests of the firm.Serious Fraud Office (SFO UK) News (www.o. was heard at Southwark Crown Court. Michael Andrew Shephard (d. He has been bailed pending an SFO decision on how to proceed against him. Mark Pattinson was an associate of Shephard's. The SFO investigation commenced in November 2008." Background Kevin Steele was a partner at London law firm Mishcon de Reya. The claimed purpose of the loan application was for property developments in Turkey. In opening. He was also disqualified from acting as a company director for 15 years. Together they conspired to produce letters purporting to be from Bank Julius Baer & Co in Guernsey. following their initial enquiry. amended below. has been sentenced today to five years and six months' imprisonment. also sentenced on 27 January and named in this SFO press release. The reference to past dishonesty was in fact attributed by the sentencing judge to co-conspirator. The case. Convicted defendants: Andrew Rybak (d. He was found guilty in December 2011. 11/06/54) of Brussels. "you derived some pathetic satisfaction from parading yourself as a man of wealth.b. Michael Shephard who purported to be a wealthy businessmen was one of his clients. Egypt.o. 28/03/56) of Newbury. Kevin James Christopher Steele (d. has been sentenced today to six years and three months' imprisonment. the contracts affected were for engineering and procurement projects based in Iran. Steele denied the charges against him but was convicted of the same offences on 5 December 2011.b 09/06/60) of Kent. which opened on 7 November. Singapore and Abu Dhabi. Berkshire Ronald Saunders (d.o. where the convicted defendants are to be sentenced on 30 January. named Operation Navigator.o.b.b 29/01/61) of Lancaster. They pleaded guilty also to conspiracy to commit fraud by false representation contrary to section 1(1) of the Criminal Law Act 1977 and section 1 of the Fraud Act 2006. that he was. The documents contained a claim that over £76 million was held in two Guernsey accounts and available for use as security on the €22 million loan. Four guilty in £70 million contracts corruption case Four men have been convicted of conspiring to corruptly obtain payments by supplying confidential information about a series of high-value engineering projects in the oil and gas engineering industry.b.o." He also said of Shephard. Mark Terence Pattinson (d. Surrey.b. was awarded. was awarded the Singapore Parallel Train procurement contract. equipment to treat fuel gas. Saunders supplied confidential information to Rybak for the benefit of a bidding company Mantrac Egypt and its subcontractor Impianti e Technolgie do Processo S. One element of the contract was a generator package valued at nearly £3 million. or agreed to make. managed the procurement process for this project. Some payments of around £357. When the contract was awarded. These packages were worth over £17 million.r. SFO Director Richard Alderman said. The other man was again employed as a buyer (from 2007 to 2008). was appointed to provide procurement services to Pars Petrochemical Company for the construction of a styrene monomer plant in Bandar Assaluyeh. Crucially. which agreed to pay SPS 3% plus a split of any uplift when the contract. were made from successful bidders. Singapore Parallel Train Project.p.000. a joint venture in Reading.L. which totalled approximately US$100. (Styrene monomer is a chemical commonly used in the manufacture of disposable transparent containers). J P Kenny. The investigation is an excellent example of collaboration between the City of London Police and the SFO. The Projects The investigation began in April 2008 as a joint operation between the Serious Fraud Office and the City of London Police. The trial focused on five projects: Styrene Monomer Project. who were co-directors of Strategic Project Services Ltd (a corporate vehicle for their purported consultancy services). Confidential information was relayed to a bidding company. generator sets. together with another man (see note 1). A number of separate packages were investigated in detail.000 and US$229.of privileged positions with the simple aim of making money illegally. a company based in Staines. Fluor Ltd. The payment was then distributed between the defendants. On three parts of the project (waste water treatment.A. corrupt payments for the information. oily water treatment and large bore pipes. Saunders and another man were engaged as contractors by Fluor Limited between 2006 and 2008." Commenting on the outcome. provided procurement services to Khalda Petroleum Company for the development of the QASR gas fields in Egypt. Egypt. This is one of the largest integrated oil and gas projects in the world and involves the exploration and development of several different oil and gas fields in the Sea of Okhotsk off Sakhalin Island (part of the Russian Federation). a company in Farnborough. "Corruption in business life diminishes society. combined in a complex case with significant international links" Summary The confidential information supplied to bidders was held by companies acting as procurement agents for the projects. Saunders was engaged by Snamprogetti Ltd as an agency worker between 2001 and 2003. Investigators subsequently uncovered suspected corruption in a number of other similar contracts and identified the above-named defendants as being involved. the illicit payments were shared out amongst the co-conspirators. QASR Gas Gathering Project. oil pumps. In 2004 and 2005. Saunders. It is an industry where individuals who work for such companies often do so on a short term basis. the defendants had access to inside information which they passed on to targeted bidding companies who either made. he passed confidential information to Rybak and Hammond which was then offered to bidders Ecodyne Ltd (a Canadian company) and 59 . was engaged by J P Kenny as a contractor from 2005 to 2007. Walter Tosto Serbatoi S. gas turbines. Sakhalin Island Project. including: air compressors. In August 2005. Iran: Snamprogetti Ltd. Today's outcome makes it clear that it will not be tolerated.000. Rybak and Hammond received confidential information from the insiders which they sold on to bidding companies. Each of us used our particular powers and skills.. Iran. Foster Wheeler Worley Parsons. which were then distributed between the defendants. part of which was then passed onto Saunders. a company in Basingstoke. Again. He passed inside information about the splitter column element of this contract (valued at nearly £1 million) to Hammond and Rybak. Disguised as "consultancy services". It followed a report of a suspicious approach to a bidding company. demineralized water and carbon bed filters worth around US$35m). Rybak received over a quarter of a million US dollars. its directors and shareholders by falsely representing that the 22 farms owned by the CraFarms Group had made a profit of NZ$18.. Dr David Turner (56). 2012 for plea. The case of two other Innospec executives. concluded with an unfavorable assessment of that product. Charges were brought against them in September 2010. was charged with one count of conspiracy to defraud by the Independent Commission Against Corruption (ICAC) in Hong Kong. In relation to the steam turbine generator package. GE Water & Process Technologies Ltd. who agreed to pay commission if awarded the contracts. Turner additionally pleaded guilty in respect of one charge of conspiracy to corrupt Iraqi public officials and other agents of the Government of Iraq (between 01/06/06 and 31/05/07) by making payments as inducements to ensure that tests on MMT. In addition. conducted by or on behalf of the Government of Iraq. or as rewards for having secured. Dr. The sentencing of Dr. The trial opened at Southwark Crown Court on 10 October 2011. Serious Fraud Office New Zealand (SFO NZ News) (www. the City of London Police and the Cheshire Constabulary. the former Innospec Limited Global Sales and Marketing Director (Tetraethyl Lead). which identified and established the involvement of these defendants. a contract valued at over US$42 million. was adjourned until the 4th of April. which then led to the City of London Police and the SFO being called in.p.nz) Third person charged in connection with Crafar farms bid A third person associated with an attempt to purchase the farm assets of the Crafar family (the Crafar farms) has been charged in Hong Kong and appeared in court yesterday. Confiscation proceedings will be instigated.5 million for the year ending May 2009. Sentencing has been adjourned until 30 January. They were appalled at the apparent blatant disregard shown by these defendants for the confidentiality and integrity of the project environments. travel records and e-mails. rejected the approach and reported it to the procurement company. Yee Wenjye (40. Yee is accused of conspiring to defraud Natural Dairy (NZ) Holdings Limited. which in turn entered into an agency agreement. contracts for Innospec from those Governments for the supply of its products including Tetraethyl Lead. It is alleged that the company had in fact made a significant 60 . The SFO alleged that Robert Storey was also involved in this conspiracy. corrupt approaches were made to bidders by Hammond (also using a false name). Proceedings The companies that provided procurement services for these projects helped the investigation enormously. Dennis Kerrison and Paul Jennings.A. the US Securities & Exchange Commission. Innospec Ltd: Former director pleads guilty to corruption Today. and 2008 respectively. Hydrogen Power Project. In 2008 Foster Wheeler was engaged by Masdar (Abu Dhabi Future Energy Company) and Hydrogen Energy International (based in Weybridge) to provide engineering and procurement services for the construction of the Hydrogen Power Abu Dhabi power plant. Our investigators sifted huge quantities of evidence including mobile phone data. Both Rybak and Saunders were engaged by Hydrogen Energy as contractors between 2008 and 2009. Rybak and Saunders brought Barry Smith into the conspiracy to assist with recruiting an Abu Dhabi agent for Italian bidding company Franco Tosi Mecannica S. the payment of which in turn was to be distributed between the defendants.govt. appeared before His Honour Judge McCreath at Southwark Crown Court and pleaded guilty to three counts of conspiracy to corrupt. Abu Dhabi. another bidder corruptly approached by Rybak (using a false name). also known as Eric Yee). Turner was adjourned. Mr. The jury was sent out on 10 January 2012. a Singaporean national and New Zealand resident. a competitor product manufactured by Ethyl Corporation. The first two counts charged a conspiracy to give corrupt payments to public officials and other agents of the Government of Indonesia (between 14/02/02 and 31/12/08) and the Government of Iraq (between 01/01/03 and 31/01/08) as inducements to secure. The SFO investigation into the conduct of Dr Turner was assisted by the US Department of Justice.Ondeo Industrial Solutions SarL (based in France). In late 2009 Capehorn fell into financial difficulty as a result of falling beef prices.‖ On 17 October 2011. The SFO commenced its investigation in September 2010 when the Natural Dairy bid to purchase the Crafar farms in 2010 was being assessed by the Overseas Investment Office (OIO). May Hao (formerly known as May Wang). the former operator of UBNZ Assets Holdings Limited (UBAH). The SFO further alleged that he fraudulently sought $1. and hoped to advance those discussions into formal intelligence and information sharing arrangements in 2012. including Dominion Finance. The case against Mr. was charged by ICAC with one count of conspiracy to offer advantages to an agent and two counts of dealing with property known or reasonably believed to represent proceeds of a crime. Feeley said that the SFO had preliminary discussions with a number of specialist overseas financial crime agencies last year.accounting loss for the year of around NZ$30 million. The charges follow a joint investigation into the company undertaken by the Serious Fraud Office (SFO) in New Zealand and ICAC in Hong Kong. Capehorn operated a beef cattle fattening farming business in the central and lower regions of the North Island. The case against May Hao and Chen Keen has also been adjourned to 18 April 2012. SFO Chief Executive Adam Feeley said that the further charge by Hong Kong authorities was consistent with the evidence SFO investigations had uncovered. Greater co-ordination between them will enable efficient allocation of their investigation and prosecution resources. in early 2010. Mr. FMA and the SFO have already shared resource and intelligence on a number of finance company investigations. Feeley said that the case underscored the increasing importance of sharing evidence and resources with overseas law enforcement agencies. Nitschke obtained over $880. Mr. and Hanover Finance.000 worth of finance from lenders for cattle that did not exist. The matter 61 . The FMA and SFO share an objective of improving confidence in New Zealand‘s financial markets. provides a framework within which the organizations can coordinate their activities. Capehorn was placed into receivership by the BNZ in December 2010 at which time PwC were appointed as receivers. We concur with the additional action being taken by ICAC. Yee has been adjourned to 18 April 2012. The initiative. Yee is alleged to have conspired with May Hao and Chen Keen in misrepresenting the financial strength of the Crafar farms. May Hao and Chen Keen also re-appeared in court yesterday.‖ Mr. ICAC opened a separate investigation into Natural Dairy after receiving an allegation of corruption. Capehorn Farming Company Limited (Capehorn). ―I think it is unlikely either agency would have progressed this case as effectively without the joint investigative efforts which occurred.3 million farming fraud Peter Joseph Nitschke (32) today pleaded guilty to seven charges under the Crimes Act relating to dishonestly using a document and obtaining by deception. exchange information and share expertise and resources. FMA and SFO sign Memorandum of Understanding The Financial Markets Authority (FMA) and the Serious Fraud Office (SFO) have signed a Memorandum of Understanding (MOU) which will enhance their already close working relationship and drive greater efficiencies between the two agencies. announced by FMA Chief Executive Sean Hughes and SFO Chief Executive Adam Feeley. and believe that our law enforcement efforts can be most effectively applied to supporting the ICAC case through the evidence of SFO forensic accountants involved with the investigation. The SFO alleged that. Natural Dairy is listed on the Main Board of the Stock Exchange of Hong Kong but trading has been suspended since 7 September 2010.5 million in refinancing from the BNZ in order to repay loans for the non-existent cattle and for cattle that had already been sold. in which cattle purchases were generally financed through specialist livestock finance companies. Belgrave Finance. Chen Keen (also known as Jack Chen) was charged in Hong Kong on 21 October 2011 with one count of conspiracy to offer advantages to an agent and one count of dealing with property known or reasonably believed to represent proceeds of a crime. The charges followed a Serious Fraud Office (SFO) investigation into agri-business. and it is likely to become an increasing feature of our cases in the coming years. Mr. Last month it was announced FMA would support the SFO‘s case against five individuals involved with the affairs of South Canterbury Finance. ―The further charge reinforces our initial view as to the best options for law enforcement. Guilty plea in SFO $2. The Nominating Committee will review the nominations. In addition to nominations from IFAC member bodies. all vacancies on the public interest activity standard-setting boards* are open for nominations by the public. at IFAC‘s annual Council Meeting in Berlin. and professional balance. please visit the 62 . That is why seeking high-quality nominations is at the core of our nominations processes. and the president of IFAC will present the award(s) at the annual IFAC Council Meeting. 2012. to ensure that we have a rich pool from which to find the right candidate for each position. 2011. These in-depth documents. If a member body wishes to include other supporting material. Nitschke will reappear in the Feilding District Court for sentencing on 20 February 2012. Candidates may or may not be members of the accountancy profession. IFAC Posts Call for Nominations for Boards and Committees in 2013 The International Federation of Accountants (IFAC). if any. for some of those positions.ifac. it should not exceed two pages. the global organization for the accountancy profession with members and associates in 127 countries. located on the IFAC website. or their equivalents. which will make the final selection(s). The IFAC International Gold Service Award was established in 2010 to recognize outstanding individual contributions to the accountancy profession. Mr. The chief executive officer of IFAC will notify the selected candidate(s) in writing. The cover letter should include reasons why the member body believes that the individual should receive an award and must be signed by the president and/or chief executive. Each year. ―We aim to attract a wide variety of high-quality nominations. and contributions may or may not be made through IFAC. by Göran Tidström. and/or.‖ said IFAC President Göran Tidström. has opened nominations for the 2012 IFAC International Gold Service Award. Germany. exemplifying professional conduct and ethics. though. contain strategic and practical advice for nominating organizations and other individuals that allows them to make more informed decisions in their selections and decisions. Forum of Firms. regional. has issued an announcement to alert its members. the position of the IFAC Deputy President is open for nominations from member bodies. For more information about the Nominating Committee. and a cover letter. 2012. of the member body. and recommend candidate(s). We thank our member bodies and the public in advance for the thoughtful and valuable nominations we anticipate receiving this year. and to understand the requirements of the various positions. this year. available on the IFAC website. make the necessary inquiries. its due process. or for guidance in selecting the best candidate. approximately one-third of the 155 positions on the boards and committees have openings. president of IFAC. For the first time. including protecting the public interest. serving members may be reappointed. exceptional quality of work.was subsequently referred to the SFO in March 2011. and is in response to the Monitoring Group‘s 2010 effectiveness review of the IFAC Reforms.‖ Both the Call for Nominations and its companion guide Developing a Nominations Strategy are designed to help IFAC stakeholders identify the most qualified person for nomination to each available position on the boards and committees. the global organization for the accountancy profession with members and associates in 127 countries. contributions to a particular project or initiative. other international organizations and the general public of its Call for Nominations for IFAC Boards and Committees in 2013. to the IFAC Board. The nomination should consist of a completed nomination form. ―The caliber of the volunteer members on our boards and committees is what makes these groups so effective.The awards were presented on November 16. IFAC News (www.org) IFAC Invites Nominations for IFAC International Gold Service Award in 2012 The International Federation of Accountants (IFAC). Nominations received in a format other than the stipulated form will not be considered. This change is due to IFAC‘s determination to ensure a transparent approach to filling available positions. during its meeting in June 2012. IFAC‘s Nominating Committee will identify and recommend candidate(s) for this award. while also achieving gender. if appropriate. The recipients of the IFAC International Gold Service Award in 2011 were Sir David Tweedie (United Kingdom) and Professor Stephen Zeff (United States). to be held November 14-15. Nominations from IFAC member bodies must be submitted to the chief executive officer of IFAC by March 15. In addition. including the impact of trends in financial reporting. ―Like others. and prudential regulators. particularly with both the accounting standard setters—including the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB)—and regulators. understandable. and narrative disclosures of some of the risks and characteristics of companies and groups. The discussions will form part of the FASB‘s ongoing redeliberation of a proposed Accounting Standards Update on financial instruments. The boards will explore these key aspects jointly. applying materiality to disclosures. respectively. The Evolving Nature of Financial Reporting: Disclosure and Its Audit Implications. and then decide whether to issue proposed amendments to IFRS 9 and US Generally Accepted Accounting Principles (US GAAP). and work effort. However. but would require international collaboration and cooperation.‖ The Feedback Statement presents a summary of the range of views on some of the more significant challenges faced by participants across the entire financial reporting supply chain.‖ said Prof. audit. the IAASB has a role in enhancing the public‘s confidence in disclosures as a priority—recognizing that individual initiatives must be towards finding a collective solution. IASB Chairman Hans 63 . To address some of the issues identified respondents have called for more auditing guidance in certain identified areas. Arnold Schilder. 2012 electronically via IFAC‘s nominations database. issued in November 2009 and amended in October 2010. resulting from its ongoing work to develop a new IFRS on insurance contracts and the feedback received on application of IFRS 9 to particular instruments. ―Financial information that is reliable. IAASB Technical Director. The boards will work together with the objective of more closely aligning key aspects of their classification and measurement models. audit firms. IAASB Disclosures Feedback Statement. which was originally issued in May 2010. The Discussion Paper solicited views and perspectives of different stakeholder groups on the challenges arising as financial reporting continues to evolve to meet the changing needs of users. and professional bodies provided thoughtful and informative input on issues around disclosures. Accordingly. evaluating misstatements generated by disclosures. All applications should be submitted before March 15. investors and others look to disclosures for vital insights when making investment decisions. The IASB will consider these discussions as part of its project to undertake limitedscope changes to IFRS 9. We must work together to develop effective responses to the issues being faced today. instructions are provided on page six of the Call for Nominations. Respondents from across the world. the majority of the respondents were of the view that some of the more important issues could not be addressed by the IAASB on its own.ifrs. and relevant is essential. but have become more so today as reporting increasingly incorporates fair value information. Financial Instruments. the availability of audit evidence to support disclosures. We wholeheartedly agree with the respondents regarding the need for international collaboration and cooperation among standard setters.‖ notes James Gunn. including regulators and oversight authorities. Collaboration and Cooperation Shares Global Insights to Support Essential The International Auditing and Assurance Standards Board (IAASB) today released a Feedback Statement on the responses to its January 2011 Discussion Paper. securities. as is the assurance on that information that auditors provide. Chairman of the IAASB. users and preparers. ―Disclosures have always been a critical component of financial reporting.IFAC website. estimates involving judgment and complex measurements.‖ IFRS News (www.org) IASB and FASB seek to reduce differences in classification and measurement models for financial instruments The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today agreed to work together to seek to reduce differences in their respective classification and measurement models for financial instruments. and other stakeholders. ―This underscores the importance of the IAASB‘s initiative to gain further knowledge and understanding of the issues and share what it has heard to stimulate further thinking and exploration in this area. The Feedback Statement provides an overview of the key messages heard and provides thoughts and recommendations on what can be done to address them. Today's decision to work together on key differences—which represent the most significant remaining differences between the decisions reached to date—is responsive to stakeholders in the US and abroad. Stephen Cooper (UK) and Wei-Guo Zhang (China) were each reappointed to serve a second. where IFRSs are required in full for publicly traded companies. this limited-scope review now presents an ideal opportunity to align IFRS and US GAAP more closely. Chief Operating Officer. We are also grateful to Paul Pacter for agreeing to be reappointed until the search for his successor is concluded. today announced the appointment of Yael Almog as Executive Director of the IFRS Foundation. She was called to the Israeli Bar in 1994. As a lawyer. Their terms will now expire on 1 August and 30 June 2017 respectively. She will report to both the 64 . former Chair of the International Organization of Securities Commissions (IOSCO) Monitoring Group. responsible for the governance and oversight of the International Accounting Standards Board (IASB). the oversight body of the International Accounting Standards Board. Robert Glauber. As part of their project on financial instruments. New York. Financial Instruments: Disclosures. Her appointment follows the departure of Tom Seidenstein. in this important area of financial reporting. he has agreed to be reappointed for a further six months to allow sufficient time for the appointment of his successor to be confirmed. Elke König stepped down from the IASB in December 2011 to become President of the German Federal Financial Supervisory Authority. John Smith will step down in June 2012. recognizing the investment that many jurisdictions have made in preparing for the introduction of IFRS 9 in 2015.‖ Trustees reappoint three members of the IASB The Trustees of the IFRS Foundation. The boards will share the feedback they have received on their respective decisions and strive to develop a more closely converged approach that addresses those concerns. the FASB is proposing enhanced disclosures about interest rate risk and liquidity. The Trustees are continuing their search for three further members of the IASB. which is being handled as a separate work stream. A further Board position is available due to the constitutional amendment to expand membership of the IASB to 16 members by July 2012.‖ FASB Chairman Leslie F. Ms Almog‘s early career was spent as a senior prosecutor in criminal securities litigation and as an Adjunct Law Professor at Haifa University. who after more than 10 years of service left the Foundation to return to the United States.Hoogervorst said: ―When IFRS 9 was introduced in 2009 we said that further amendments might be required once the direction of travel on insurance contracts became clear. We will proceed with caution. Chairman of the Trustees‘ Nominating Committee said: Stephen and Wei-Guo are outstanding Board members who have served the IASB well during their first terms. Ms Almog will be responsible for the management of the day-to-day operations of the organization and provide executive leadership in support of the work of the Trustees. Almog currently serves as Director of the Department of International Affairs of the Israel Securities Authority (ISA). Paul Pacter (US) had previously indicated his intention to serve just one. At the same time. His term will expire on 31 December 2012. The Trustees had no hesitation in confirming their reappointments for a second term. having served the maximum two. the Israeli market regulator. announced today the reappointment of three existing members of the IASB. Seidman said: ―The boards have been urged to converge their standards on financial instruments. She is a former senior adviser to the ISA Chairman. For more information about the search process visit http://go.ifrs. Yael Almog appointed as Executive Director of the IFRS Foundation The Trustees of the IFRS Foundation. five-year terms. We are now at that point. two-year term. However.org/IASB+member. The boards will continue to develop a common approach on impairment of financial assets. Ms. She has significant experience in dealing with international organizations and financial regulators on matters related to International Financial Reporting Standards (IFRSs) and was closely involved in the implementation of IFRSs in Israel. to fill existing and forthcoming vacancies. She studied at both the Tel Aviv University Faculty of Law and the Columbia University School of Law. led the ISA role in Israel‘s accession to the Organization of Economic Cooperation and Development (OECD) and managed the mutual securities recognition arrangements between Israel and the European Securities and Markets Authority (ESMA). which under IFRS are covered by IFRS 7. Commenting on the reappointments. five-year term. Paul Cherry. The participants exchanged views on the work of the Trustees and the IASB to establish International Financial Reporting Standards (IFRSs) as the globally accepted language for financial reporting.ifrs. Chairman of the IASB said. responsible for the governance and oversight of the International Accounting Standards Board (IASB). Chairman of the Advisory Council. Chairman of the IFRS Advisory Council said. I am grateful to the previous members for their contribution to our work and thank the incoming members for agreeing to participate in the important work of the Council. Hans Hoogervorst. Vice-Chairmen of the Advisory Council. The Advisory Council is the formal advisory body to the Trustees and the IASB. A list of the appointments and reappointments is available by clicking here. Paul Cherry. have announced today the appointments and reappointments to the IFRS Advisory Council following the expiration of membership periods at the end of 2011. responsible for the governance and oversight of the International Accounting Standards Board (IASB). Chairman of the Trustees said: Yael‘s track record speaks for itself. The terms of the new appointments and reappointments published today begun on 1 January 2012 and range between one and three years to enhance continuity and achieve an orderly rotation in membership.Chairman of the Trustees and the Chairman of the IASB. as well the practical challenges faced by Singapore companies in implementing IFRSs. Patrice Marteau and Charles Macek. Yael Almog said: This is an exciting challenge for me both professionally and personally. I have always strongly supported the mission of the IFRS Foundation and I am honored and proud to join the organization and to contribute my share to achieving its goals. Commenting on the announcement. IFRSs are required or permitted for use by companies in more than 100 countries. Commenting on the meeting. Chairman of the ASC and Mr. Michel Prada. met with representatives of the Singapore Accounting Standards Council (ASC) and the local business community on 12 January 2012. A summary of the conclusions of the Trustees‘ meeting will be published shortly on the IFRS Foundation website (www. I would like to thank the Singapore Accounting Standards Council for organizing a very productive meeting with senior representatives of the Singapore business community. Michael Lim said: ―Singapore is committed to full convergence. Trustees announce revised membership of IFRS Advisory Council The Trustees of the International Financial Reporting Standards (IFRS) Foundation. She will be a tremendous asset to the organization. IFRS Foundation Trustees and representatives from the Singapore Accounting Standards Council and local business community meet to discuss financial reporting matters The Trustees of the IFRS Foundation. Singapore Financial Reporting Standards (SFRSs) are already substantially aligned with IFRSs and the ASC is working towards full convergence of those standards. Her extensive international contacts and deep knowledge of matters related to IFRSs means that she will be able to hit the ground running. the Trustees revised the membership structure of the Advisory Council so that members now serve primarily as representatives of organizations. I worked with Yael during our time at IOSCO and was impressed with her ability to work well with her international colleagues and achieve results. The Advisory Council provides an important sounding board for the Trustees and members of the IASB. Commenting on the appointment. Mr. the newly appointed Chairman of the IFRS Foundation Trustees. Michael Lim. has been reappointed for a further two years. and will continue to actively contribute and collaborate with the Foundation and IASB to develop global accounting standards. In 2009. taking into consideration the progress of the IASB‘s priority projects. the ASC concluded that Singapore remains on track for full convergence of the SFRSs with the IFRSs. have been reappointed for one and three years respectively. In completing our review of the status of convergence implementation. The meeting was jointly led by Mr. 65 . Singapore has been a long-term supporter of the development of a single set of global accounting standards.‖ The meeting follows a separate two-day meeting of the Trustees in Singapore on 11 and 12 January 2012. Singapore is a major financial centre and an important stakeholder in our work to establish IFRSs as a global financial reporting language. Michel Prada. The Trustees and the leadership of the IASB expressed a commitment to support this work. including most of the G20.org). Michel Prada said: ―On behalf of the Trustees.― Mr. Robert Glauber. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Financial Instruments. resulting from its ongoing work to develop a new IFRS on insurance contracts and the feedback received on application of IFRS 9 to particular instruments. the Italian securities and markets regulator. which was originally issued in May 2010. Decisions in an Exposure Draft may be (and often are) changed in re-deliberations based on information provided to the Board in comment letters. Examples of intangible assets subject to the proposal would include indefinite-lived trademarks. The appointments. The amendments would allow an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. Yong Li is President of the Chinese Institute of Certified Public Accountants and a Vice Minister to the Ministry of Finance of the People‘s Republic of China. Marco Onado is a Senior Professor of Financial Institutions at the Bocconi University in Milan.org) SUMMARY OF BOARD DECISIONS Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board‘s deliberations. He is responsible for leading the Ministry‘s involvement in international matters including regional and bilateral economic issues. licenses. issued in November 2009 and amended in October 2010. FASB Publishes Proposal for Impairment of Indefinite-Lived Intangible Assets The Financial Accounting Standards Board (FASB) today issued for public comment a proposed Accounting Standards Update on indefinite-lived intangible asset impairment testing that is intended to simplify impairment assessment and reduce the recurring costs to comply with existing guidance while improving the consistency of testing methods among long-lived asset categories for preparers. Professor Onado is a former Commissioner of the Commissione Nazionale per le Società e la Borsa (CONSOB). Commenting on the appointments. at public roundtable discussions. Italy. Financial Accounting Standards Board News (www. The discussions will form part of the FASB‘s ongoing redeliberation of a proposed Accounting Standards Update on financial instruments.fasb. Chairman of the Trustees‘ Nominating Committee said: President Li and Professor Onado are highly respected authorities on international financial matters as well as prolific writers and commentators. a global investment manager with a presence in 27 countries and more than €165bn of assets under management.Yong Li and Marco Onado appointed as Trustees of the IFRS Foundation The Trustees of the IFRS Foundation. private. today announced the appointment of Yong Li and Marco Onado as Trustees. responsible for the governance and oversight of the International Accounting Standards Board (IASB). as well as co-ordination with the G20 and financial sector supervision in China. and distribution rights. begin immediately and will expire on 31 December 2014. and through other communication channels. He is also Chairman of Pioneer Global Asset Management. An organization electing to perform a qualitative assessment no longer would be required to calculate the fair value of an indefinite-lived 66 . The IASB will consider these discussions as part of its project to undertake limitedscope changes to IFRS 9. The terms are renewable once. Marco Onado. approved by the IFRS Foundation Monitoring Board. President Li is a former Executive Director of the World Bank and a former First Secretary of the Chinese delegation to the United Nations. They are outstanding appointments to the Trustees. IASB and FASB Seek to Reduce Differences in Classification and Measurement Models for Financial Instruments The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today agreed to work together to seek to reduce differences in their respective classification and measurement models for financial instruments. Yong Li. The standard would apply to all public. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue an Accounting Standards Update. and not-for-profit organizations. org) Top AICPA Tax Expert Available to Comment on Tax Changes Proposed by President Obama in State of the Union Message President Obama is expected to mention a number of highly-charged income tax changes in his State of the Union Address tonight.S. Securities and Exchange Commission (SEC).S. U. vice president of taxation of the American Institute of Certified Public Accountants and one of the foremost federal tax analysts in Washington.aicpa. allowing users of the taxonomy to provide feedback on the updates and to provide SEC filers. All of the conclusions reported are tentative and may be changed at future Board meetings. the framework for the development. Karl will be able to describe the Obama proposals in a completely nonpartisan way and be able to explain their effect on the average taxpayer. As AICPA‘s senior tax professional.S. GAAP Financial Reporting Taxonomy contains updates for accounting standards and other improvements to the 2011 taxonomy currently used by SEC issuers. GAAP Financial Reporting Taxonomy pending final acceptance by the U.S. and other interested parties the opportunity to become familiar with and incorporate new element names for their filings. Disclosures about risks and uncertainties and the liquidation basis of accounting. software vendors. Edward Karl. The FASB issued proposed improvements to the taxonomy in the fall.intangible asset unless the organization determines. The Board decided not to require that management of an entity assess whether there is substantial doubt about the entity‘s ability to continue as a going concern. providing constituents with a 90-day period to submit their responses. Open discussion—Impairment of indefinite-lived intangible assets. GAAP Financial Reporting Taxonomy Now Available The Financial Accounting Standards Board (FASB) today announced the availability of the 2012 U. Decisions in an Exposure Draft may be (and often are) changed in re-deliberations based on information provided to the Board in comment letters. AICPA News (www. As a next step in this project. The FASB is responsible for the ongoing development and maintenance of the taxonomy applicable to public issuers registered with the SEC. measurement and reporting of CPE programs. The 2012 U. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions become final only after a formal written ballot to issue an Accounting Standards Update. at public roundtable discussions. and through other communication channels. The approval comes following a collaborative analysis of the Standards by a joint 67 . that it is ―more likely than not‖ that the asset‘s fair value is less than its carrying amount. SUMMARY OF BOARD DECISIONS Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board‘s deliberations. The Board affirmed its plan that the comment period for the Exposure Draft would close at the end of April 2012. NASBA and AICPA Give Final Approval to Revisions to Continuing Professional Education (CPE) Provider Standards The Boards of Directors for both the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA) today announced final approval of the proposed revisions to the Statement on Standards for Continuing Professional Education (CPE) Programs (Standards). will be available following the delivery of the State of the Union Address to discuss the president‘s tax proposals. service providers. the Board directed the staff to develop a principle for an entity to assess the adequacy of its disclosures about risks and uncertainties and to evaluate how the content of such disclosures could be improved. A majority of Board members observed that such a requirement would be difficult to apply and that users of financial statements would benefit to a greater extent from ongoing disclosures about risks and uncertainties than they would from disclosures that would be made only after management concludes that there is substantial doubt about an entity‘s ability to continue as a going concern. presentation. based on a qualitative assessment. FOX Financial Planning Network Partner to Help CPAs Expand Offerings The American Institute of Certified Public Accountants today announced a partnership with Fox Financial Planning Network. 68 . The partnership comes as clients increasingly look to CPAs for broader financial advice. Best of all.. Anne Farrell. provides discounted and customized versions of tools and training for CPA practitioners.AICPA/NASBA CPE Standards Committee and an extended public comment period of the Standards exposure draft. which will offer strategies for practitioners whose clients face questions or challenges from the IRS. they‘re perfect for CPAs and finance professionals on the go. education and other goals. The new program. The bottom line: Tax enforcement is evolving and CPAs and finance professionals must be prepared for a new generation of enforcement tools and techniques. research and practice. Professor Chenall was honored for his research and teachings in the areas of management accounting. Calif. which can lead to civil or criminal penalties for taxpayers—not to mention sanctions for practitioners who either fail to report these matters fully or are negligently ignorant of their existence. The AICPA gives the PFP Distinguished Service Award annually to an AICPA volunteer who significantly contributes to the advancement of personal financial planning as a practice discipline. AICPA. CPA firms of all sizes can access on-demand training sessions. One IRS priority is to ferret out undeclared interests in foreign financial accounts and assets. Sponsored by the AICPA. particularly where small business owners or high-wealth individuals are concerned. Ph. Receives Lifetime Contribution Award from AAA The American Institute of Certified Public Accountants (AICPA) and the Management Accounting Section of the American Accounting Association are pleased to announce that Robert Chenall.com/ebooks. chair of the Lifetime Contribution Committee. a fully documented workflow system and coaching sessions to effectively manage a financial planning practice and guide clients toward their savings. With many now available as eBooks. available through the AICPA‘s Personal Financial Planning section. Overall. as the recipient of the 2011 Personal Financial Planning Distinguished Service Award. to help CPAs add financial planning to their practices. www. the American Institute of Certified Public Accountants is sponsoring a new event this spring. The eBooks are easily navigable. To help meet that goal. a financial services consulting firm in San Diego. AICPA Launches eBook Versions of Popular Titles for the Accounting Profession Audit and accounting guides from the American Institute of Certified Public Accountants have been popular desk reference tools for decades. presented the award at the 2012 AAA Management Accounting Section‘s mid-year meeting. Ph. with text that can be searched for key terms or annotated. Karen Goodfriend Receives AICPA‟s 2011 PFP Distinguished Service Award The American Institute of Certified Public Accountants is pleased to announce Karen Goodfriend. the submitted comments did not result in major changes or revisions to the Exposure Draft of the Standards. has been awarded the 2012 Lifetime Contribution Award.. portable device.. too. of KK Wealth Advisors in Los Alto.D. New Conference Offers Strategies for Dealing with Stepped-Up IRS Scrutiny Recent government statistics show that the Internal Revenue Service has increased its scrutiny of tax returns and tax professionals. Robert Chenhall. and Leslie Eldenburg. CPAs can assemble an entire reference library in a single. the Lifetime Contribution Award recognizes individuals who have made an important mark on management accounting education. Digital versions of more than 30 of the AICPA‘s top-selling titles on accounting and audit guidance and practice management strategies are available for download from the organization‘s online storefront. CPA/PFS. Goodfriend received the award earlier today at the Institute‘s 2012 Advanced Personal Financial Planning Conference in Las Vegas. AICPA Conference on Tax Controversy. member of the AICPA‘s Business & Industry Executive committee.D.cpa2biz. The most significant change to the Exposure Draft was to provide additional time on the front end for the implementation of the revised Standards. retirement. This Bill will gift it more powers at both a policy and supervision level. Scott Jackson.Alexander Bruggen.‖ 69 . Carey Scholarship. 38 percent said they are losing sleep.‖ published in Contemporary Accounting Research. said: ―The splitting of responsibilities between the PRA and the FCA will not in itself ensure a better system. ―Drivers and Consequences of Short-Term Production Decisions: Evidence from the Auto Industry. according to a new survey by the American Institute of Certified Public Accountants and the Ad Council. nearly three in four young adults in the Feed the Pig demographic are worried more about personal finances because of today‘s economy. But firms and consumers must also behave responsibly. published in October 2010.‖ Financial Services Bill published: ICAEW responds Responding to today‘s publication of the Government Bill. The second goes Scott Jackson for his paper ―The Effect of Firms' Depreciation Method Choice on Managers' Capital Investment Decisions. head of ICAEW‘s Financial Reporting Faculty. head of ICAEW‘s Financial Services Faculty. Dr. the new conduct regulator will need to be more pro-active and more interventionist. scrutiny and accountability.‖ published in the Accounting Review. Nigel Sleigh-Johnson. Ranjani Krishhnan and Karen Sedatole Receive AAA‟s Greatest Potential Impact on Management Accounting Practice Award The American Institute of Certified Public Accountants (AICPA). and sit uncomfortably alongside the parallel regime of International Financial Reporting Standards. ―The proposals published today represent a second attempt by the ASB to get the new standards just right. almost half. This must be accompanied by greater openness.to 34-year-olds take control of their finances and add saving to their daily lives. Asked how those concerns are affecting them. There is a limit to how far any regulator can be expected to control market behavior. which helps 25. The first award goes to Alexander Bruggen. following feedback on the previous proposals. as the current UK rules are neither comprehensive nor coherent. said they are socializing less with friends. which are awarded annually to students with little or no previous accounting education who intend to pursue graduate accounting degrees and become CPAs. According to the survey. The organizations released the results today to coincide with the launch of a new series of public service advertisements on behalf of their national Feed the Pig financial literacy campaign.com) ICAEW: We need a coherent reporting framework for all sizes of UK businesses Responding to the proposals from the Accounting Standards Board (ASB) contained in the paper The Future of Financial Reporting. and this means the regulator must drive culture change as well. For example. ―The government also needs to make the Bank of England more transparent. Chartered Institute of Management Accountants (CIMA) and the Society of Management Accountants of Canada (CMA Canada) are pleased to announce the recipients of the Greatest Potential Impact on Management Accounting Practice Award for 2012. New Survey: Saving Takes Priority for Young Adults This Year Young adults have made saving a priority this year – ahead of losing weight.icaew. ICAEW NEWS (www. said: ―Fundamental change to UK accounting is long overdue. AICPA Announces Carey Award Winners The American Institute of CPAs today announced ten recipients of the John L. or 48 percent. living healthier and other typical New Year‘s resolutions – as financial concerns take a toll on their friendships and personal lives. and 31 percent said they are short-tempered with family and friends. 34 percent said they are distracted at work. Ranjani Krishhnan and Karen Sedatole for their paper. Iain Coke. said: ―The extension will bring a great deal of relief to those who leave their online self-assessment tax returns to the last minute. risks taken to secure returns and liquidity management are 70 . ICAEW has published detailed guidance. ―Introducing reforms that increase transparency and which effectively reduce some of the complexity around executive pay packages will help. The RDR requires all retail financial advisors to obtain a statement of professional standing (SPS) from an accredited body by 1 January 2013 to continue to advise clients.‖ ICAEW helps companies meet new auditor remuneration reporting requirements On 1 October 2011 new regulations for how companies report the fees they have paid their auditor came into force. with large companies also being required to provide a detailed breakdown of the amount paid by the type of service bought. Commenting on the extension. Dr. In advance of the publication of plans to reform executive pay. This announcement by HMRC is to be welcomed and should help to reduce the number of taxpayers fined for submitting a late return. Boards who choose to ignore a shareholder vote on these issues will be living on borrowed time. Nigel Sleigh-Johnson. Michael Izza has said that greater transparency and the ability to see and understand quickly the basis on which company executives are rewarded will be key to rebuilding trust. ICAEW Executive Director. Vernon Soare. ICAEW warns of imminent bank reporting challenges ICAEW has published a report setting out the main challenges in relation to the 2011 year-end bank reporting season.‖ ICAEW Chief Exec on executive pay reform ICAEW Chief Executive. HMRC today announced that no fines will be handed out to anyone who submits their tax return online in the first two days of February . he said: ―The ability of UK companies to attract talented leaders and to reward their success underpins the market system. Giving shareholders a greater say over executive rewards will also put the recommendations of remuneration committees under greater scrutiny. with large companies and groups also being required to provide detailed break-downs of the amount of money spent on audit and non-audit services. Exposure to sovereign debt. Professional Standards commented. Companies are legally required to disclose the amount of fees they pay auditors." ICAEW has been granted accredited body status by the FSA The Financial Services Authority (FSA) has granted ICAEW accredited body status under the FSA Retail Distribution Review (RDR). To help businesses of all sizes disclose the right sums. which is the original deadline for online selfassessment tax returns. Frank Haskew. Head of ICAEW‘s Financial Reporting Faculty. The Retail Distribution Review represents a significant change for retail financial markets and financial advisors and ICAEW will now play a part in delivering an enhanced regime for consumers. Anyone calling for help and advice could have been disadvantaged by the planned strike action on 31 January. Yet rewarding their failure undermines it and is clearly no longer acceptable to the public. said: ―All UK companies are legally required to disclose the amount of money they have paid their auditor in their annual reports. This recognizes ICAEW‘s experience as a professional body and regulator of the accountancy profession.effectively extending the deadline by two days. ICAEW Head of Tax Faculty.Tax deadline extended due to strike action HMRC has extended the online deadline for self-assessment tax returns as planned strike action is expected to cause last minute disruption. However. The Public and Commercial Services Union is planning strikes at call centres and inquiry offices on Tuesday 31st January. ―We are very pleased to be the first accountancy body to be granted accredited body status by the FSA. this extension means that taxpayers now have two extra days to file their tax return online. However. politicians and the owners of those companies. ICAEW will now be able to issue SPS to retail financial advisors who have met the FSA‘s new qualification standards and also monitor their continuous professional development. which ICAEW has responded to. Anita Monteith. to help taxpayers avoid the January blues ICAEW has some tips for filing online. especially if they have saleable skills. Clive Lewis. the Deputy Prime Minister‘s flagship scheme to create fairer opportunities to getting the best jobs. ability and drive matter most and many in our profession came from relatively modest backgrounds but with hard work and determination rose to the very top. if the tax return is over three months late there is now a £10 daily charge which will be added for every further day it isn‘t filed. and it is not the job of accounting to do so. open to all businesses and organizations operating in the UK. Is self-assessment giving you the January blues? As HMRC issues its final reminder urging people to file their tax returns online. said: ―The volatile economic environment means financial institutions their auditors and users of the financial reports need to be alert. It is impossible to predict the nature. ICAEW is warning taxpayers that those who fail to meet the 31 January deadline will incur a penalty – even if they don‘t owe any tax.‖ Widening access to the accountancy profession makes good business sense ICAEW has been congratulated by Deputy Prime Minister. ICAEW Tax Manager . Michael Izza. chief executive officer. In addition. then the start of a new year is a good time to encourage new influxes of enterprise to help boost the economy. The deadline for entries is Friday 3 February 2012. to help find potential suppliers and sub-contractors and to offer peer group advice. ―Encouraging students from any background has always been one of the strengths of our profession. However. clear explanations will mean less nasty surprises for readers of financial reports. timing or impact of future economic shocks. ICAEW said: ―ICAEW is committed to supporting social mobility as it encourages the diversification of talent and innovation within the accountancy profession.‖ 71 .‖ Last call for entries to Finance for the Future Awards There are only three weeks left to enter the Finance for the Future Awards and show how financial leadership has driven business sustainability. Iain Coke. So. The Awards. A paper tax return filed after 31 January will already be more than three months late. With the start of a new year. A new business could well be the best way to earn an income.SME and Personal Tax. said: ―Taxpayers who miss the 31 January deadline will face penalties.‖ New Year perfect time for new start-ups. If entrepreneurs believe they have a strong business plan. says ICAEW In the current economic climate setting up a business can be daunting.among the areas requiring special attention. Talent. ―It can be hugely rewarding for start-ups to be their own boss and to build something from scratch in the community. which why it is so important it is done properly and scrutinized carefully. It is also important to note that start-up businesses need to build a network of contacts for customer referrals. ―This year will be particularly difficult. are to recognize the importance of leadership in the finance function and how new ways of doing business or creating an innovative business model have resulted in long term sustainable value. ICAEW‘s Head of Enterprise. explains: ―SME growth is crucial to the UK‘s economic success. This can mean a further penalty of up to £900. so file online instead. an innovative idea or an interest that could be turned into a profitable business. the necessary resources and the determination to succeed. This comes as government currently conducts an enquiry into entrepreneurship. Businesses and organizations are being encouraged to enter the awards if they can demonstrate a shift in corporate behavior and organizational practice. ICAEW is encouraging budding entrepreneurs to get their new ventures up and running. It will be critical to make sure the financial position of banks is explained properly and understood correctly to maintain confidence in reported information. which are completely avoidable if they file online and on-time. Those filing after this date will incur a fixed £100 penalty regardless of how much tax they owe. Nick Clegg today as one of the leading companies in opening their doors to young people from all walks of life. head of ICAEW‘s Financial Services Faculty. ICAEW is named as one of the signatories to the Business Compact. TED talk on assessing the value of the Earth's assets Mr. pay decisions need to be consistent with the best interests of the company and its shareholders.org.trueandfair. Introducing shadow business secretary Chuka Umunna MP who will deliver a keynote speech on executive pay at Chartered Accountants Hall on Thursday 12 January. It also has an interactive section where questions can be posted and answers will be provided. which are vital to tackling the deficit. Commenting on the results. Setting private sector board pay should remain a decision for companies themselves. says ACCA (the Association of Chartered Certified Accountants).trueandfair. Eye-opening charts will make you think differently about the cost of air. water. ICAEW‘s Executive Director. But rapidly rising pay levels and the consequences of the financial crisis suggest that pay isn‘t always directly linked to performance. but it should be the first step in wider efforts to promote active shareholder engagement. As long as high earners pay their fair share. objective information for anyone interested in finding out more about audit. Izza will say: ―High pay is not bad in itself – it‘s necessary for top UK businesses to attract the best talent. ‗Decisions need to take into account the specific financial context in which a company operates their goals.Current executive pay framework could be improved says ICAEW Michael Izza. and their performance against targets. chief executive officer of ICAEW. trees. head of technical at ACCA. and in line with the stewardship and fiduciary responsibilities of the directors making the decisions on pay. but which is often misunderstood or overlooked. will tell business leaders that they need to be more sensitive to the widening pay gap in the UK. but pay should always be balanced with shareholder value and company performance.‖ Double success for accountancy student Over seventeen hundred finance professionals have taken the final step towards their qualifications for business leadership with the latest round of ICAEW Advanced Stage examinations.org.‖ New website explains audit ICAEW has launched a new website for non-accountants to explain the purpose of audit and the role of auditors. This will help businesses and government to strengthen their policies on executive pay and other crucial governance issues. The world‘s economy has vital need of business leaders who can apply their knowledge and financial acumen in practical and innovative ways – and our students are taught not just how handle technicalities but how to think above and beyond the figures. The site – www. a service which is relied upon by investors and the wider business community. ICAEW hopes that www. Sukhdev mentions ICAEW and our TEEB for Business Coalition in this excellent TED talk on assessing the value of the Earth's assets. keeping us competitive in a rapidly changing world. we need a constructive debate on what responsible business actually looks like. not failure. 72 . higher earnings also mean bigger tax revenues. Learning and Professional Development.‘ says John Davies.uk will provide unbiased. With reforms to statutory audit currently being considered by the European Union. ACCA NEWS (www. But. said: ―The skills that our students have acquired over their challenging and wide-ranging training period are in everincreasing demand.accaglobal. Vince Cable‘s intervention comes at the right time.‖ ―Now. Mark Protherough.com) Cable takes important first step on board pay The Government is heading in the right direction on board pay. ‗Remuneration decisions are fundamentally a matter for companies to decide for themselves. I congratulate all our successful students and wish them every success in their future careers. and that executive pay should reward long term success. The website has been set up to help improve understanding of audit.uk – describes the processes that auditors go through to give their opinion on companies‘ financial reports. their deep connection to integrated reporting is only reinforced by this generous gesture.com) CIMA publishes November 2011 exam results The Chartered Institute of Management Accountants (CIMA) has published its November 2011 results which mark the fourth session of exams of the 2010 syllabus. particularly now. Chief Executive Officer of IIRC and the UK located team members of approximately 10 people will be based there. which prove that dedication and study can produce exemplary results. Finance professionals believe there will be a renewed global economic downturn in 2012 as the largest ever quarterly survey of professional accountants shows that international trade continued to dry up at the end of last year. They should also take an interest in the amount of tax and other deductions from their wages. and understanding what is coming out of your hard earned cash is essential. and the UK NHS. We are part of the pilot program for Integrated Reporting and will be working on this throughout 2012.775 professional accountants. Performance Management have stabilized. Examination results letters will include a breakdown of marks by question. It is also very pleasing to note the increasing proportion of students sitting the CIMA exams outside the UK. The latest survey of 3. Make understanding your taxes and finance a New Year's Resolution The global body for professional accountants. So understanding how your finances and taxes work.414 senior executives. says largest ever economic survey of finance professionals Leading accountancy bodies join forces to provide powerful insight into challenges facing business. reflecting the fact that the CIMA qualification is truly global. The organization will be there for two years. Helen Brand.' Paul Druckman from the IIRC says: 'We are grateful to ACCA for allowing us to occupy a floor of such prestigious offices in Lincoln's Inn Fields. Robert Jelly. It has now joined forces with the Institute of Management Accountants (IMA). together with the post exam guides. there is still scope for improvement. is the result of the collaboration between two major professional bodies. ―While the global pass rates for paper P1. Confidence in the UK is low – but higher than in the rest of Western Europe. is suggesting simple ways to keep track of personal finances and taxes in the New Year. including 1. the world's largest and most respected US-based association focused exclusively on the management accounting profession. ACCA‘s chief executive. and ACCA is committed to the aims of the IIRC. says: 'We are delighted to be able to offer the IIRC accommodation at ACCA‘s London premises. Chas Roy-Chowdhury. ACCA (the Association of Chartered Certified Accountants). Paul Druckman. The average range of pass rates was generally maintained for all other papers. Executive Director of Education at CIMA. is the global body for professional accountants and has run the Global Economic Conditions Survey since 2009. will provide students and tutors with valuable 73 . to develop an even more robust and powerful record of the state of the global economy. ICAP plc. Network Rail. Not knowing the ins and outs of your own cash flow can catch people out when they are expecting more money to be in their bank accounts than there actually will be and that leads to debts occurring.IIRC and ACCA – sharing premises The International Integrated Reporting Council (IIRC) has moved into ACCA‘s (the Association of Chartered Certified Accountants) offices in London. head of taxation at ACCA.' Global trade drying up. We already co-operate extensively. ACCA has been involved for so long in corporate responsibility and sustainability. UK. from around the world.cimaglobal. This. said: ―CIMA is pleased to note there were some strong student performances from around the world.‖ Prize-winners and commendations in individual papers included students employed by Arcadia Group Ltd.' CIMA NEWS (www. especially when there are changes to salaries or financial circumstances. said: ―After the festive season money may be tight and people are no doubt going to be feeling the pinch even more. Centrica plc. ACCA (the Association of Chartered Certified Accountants). Performance Operations and paper P2. 'People should take a look at their incomes and outgoing expenditure and make a list of it. Due to the continuing success of these additional exam sessions. IFAP News (www. Cell: +92 300 849 9331 Mutual Recognition Agreements (MRAs)/Memorandum of Understandings (MOUs)/Reciprocal Arrangements (RAs) The Institute of Forensic Accountants of Pakistan (IFAP) has Reciprocal Arrangements/Mutual Recognition Agreements (MRAs)/Memorandum of Understandings (MOUs) with the following International Professional Institutes/Bodies:1. The Faculty of Secretaries and Administrators (FSAN) Nigeria. The Institute of Financial Consultants (IFC – USA & Canada). CIMA will continue to look to extend the scope of these exam sessions in the future to benefit all of our stakeholders in an increased number of markets.ifap. 5. Gulberg III. with T4 part B Case Study on PC being available globally for students sitting for the first time as well as for those re-sitting. The Institute of Certified Forensic Accountants (ICFA – USA & Canada). Tel: (Office) +92 42 3586 2046 – 49. All ten papers in the professional qualification will again be available in March 2012 in the UK to allow a re-sit opportunity for students. The Chartered Institute of Corporate Treasurers (CICT) USA.feedback. 4 – Saint Mary‘s Park. Students have access to a wide range of free study support resources through the CIMAglobal. Jawad Saleem (FFA) Director Finance M/s Levi Strauss Pakistan (Private) Limited. The Institute of Professional Financial Managers (IPFM – UK). 11. The Institute of Financial & Management Studies (IFMS USA). 13. The International Academy of Project Management (IAPM) Hong Kong. The Institute of Forensic Accounting and Investigative Audit (IFAIA) India. The Institute of Forensic Auditors (IFA) Zimbabwe. The Chartered Institute of Professional Financial Managers (CIPFM – USA). The Institute of Certified Business Consultants (ICBC – USA & Canada). 6. 8. The Pebble Hills University. Lahore. 7.pk) IFAP Recent Members/Admission of New Members Mr. 74 . 15. 12. The Institute of Forensic Accountants (IFA – Nigeria). 14. The Oxford Association of Management (OXIM UK). 10. The Associate and Fellow Members of the Institute of Forensic Accountants of Pakistan (IFAP) are entitled to get direct membership of these Fifteen Institutes on reciprocal arrangement basis subject to payment of requisite/transfer fee. The Caribbean Institute of Forensic Accounting (CIFA – West Indies). Prime Heights. 3. CIMA has continued to work with quality learning partners to expand CIMA‘s examination capacity and availability to provide stakeholders with greater choice and flexibility. 9. 2.org.com website along with e-magazine Velocity and online community CIMA sphere. CIMA is pleased to announce that the Strategic level papers will be available globally for the first time from March 2012. 4. Objectives of IFAP The Forensic Accounting (FA) Program offered by The Institute of Forensic Accountants of Pakistan (IFAP) is a Professional Program with the following broad objectives: To improve the ability to develop a framework for Forensic Accounting. The Institute of Forensic Accountant of Pakistan (IFAP) was setup in the year 2009 by those. Fraud Examination. To deepen insights into practical applications of Forensic Accounting. a license issued by the Registrar Joint Stock Companies under the Societies Registration Act of XXI of 1860. Forensic Audit. Forensic Auditing. Financial analysis and to rationally evaluate alternatives for purposes of decision making. detection. as a single point destination. Forensic Investigation. Forensic Auditing. Forensic Investigation and its allied subjects in a dynamic financial and investment environment. to prevent. with primary objective to put in place the right and meaningful controls and practices to prevent any wrong.    About the IFAP The Institute of Forensic Accountants of Pakistan (IFAP) was established in year 2009 at Islamabad. techniques and mechanisms. Money Laundering. Forensic Auditors. The Institute of Forensic Accountants of Pakistan (IFAP) also provides education on intricacies and practical aspects of Forensic Accounting. Forensic Auditing. Fraud Examiners and Fraud Investigators equip themselves with the latest tools. investigation & prosecution of frauds and white-collar crimes at all corporate. To develop contemporary Body of Knowledge (BOK) and skill-set and make them available for those seeking rewarding careers in the financial and investment industry era of globalization. Fraud Examination and imparting education on new emerging issues on aligning new business methods and technology with existing process. Federal Government of Pakistan. 75 . Financial Reporting. To encourage aspiring Forensic Accountants. In nut shell The Institute of Forensic Accountants of Pakistan (IFAP) provides complete Anti Fraud Education to promote Fraud Risk Management Strategy for prevention. who have been in the field of Forensic Accounting. Forensic Investigative. Fraud Examination and its allied areas/subjects and have themselves sniffed out investigated and prosecuted scores of frauds and whitecollar crimes. Corporate Governance. Auditing. Criminology and its allied areas/subjects. Forensic Investigative. detect and investigate frauds and white-collar crimes and promote anti-fraud education to actively combat the growing menace. The Institute of Forensic Accountants of Pakistan (IFAP) is promoted with the objective to educate business establishments. Risk Management. Fraud Examination. The Institute of Forensic Accountants of Pakistan (IFAP) is a first recognized Professional Accounting Institute/Body providing education and training in the fields of Forensic Accounting. Forensic Investigation. The Institute of Forensic Accountants of Pakistan (IFAP) is a unique Pakistani venture to meet the global challenges of growing menace of frauds and white-collar crimes in business establishments. org. Faheem-ul-Haq Khan Emails: [email protected]@gmail.gov.pk.pk.edu.com Member Executive Council Mr. ifap. mbt.pk 76 . [email protected]@gmail. Muhammad Muazzam Ali Zahid Emails: [email protected] Member Executive Council Mr.pk Member Executive Council Mr.pk Member Executive Council Mr.org. Abdul Jaleel Email: abduljaleel@gmail. Muhammad Tayyab Ansari Email: [email protected]. Hameed Ullah Jan Afridi Email: chairman@ipo. [email protected] Council/Board of Governors of IFAP President Barrister Sohail Nawaz Emails: [email protected] Secretary Mr. Shahzad Ali Khan Emails: [email protected] Member Executive Council Dr.pk. MBT Khalid Emails: secretary@ifap. mbt.com Vice President [email protected] Member Executive Council Dr.org. Tahir Iqbal Emails: [email protected] Member Executive Council Barrister Umer Abdullah Email: abdullah.umer@gmail. opinion.pk exemption@ifap. career@ifap. Sheharyar Rafiq Senior Indexer +92-345-232-2649 77 . vicepresident@ifap. For inclusion on the next issue of “The Forensic Accountant”. case studies.pk exemption@ifap. whose permission is necessary for reproduction in whole or in part.org.pk [email protected]. Capital Shopping Center. research or related material: Fax: +92 51 222 0872.Note: Articles are welcome from any individual. The decision of the Editor in this regard will be final.pk The contents of this Newsletter are the copyright of The Institute of Forensic Accountants of Pakistan (IFAP).pk Published By:The Institute of Forensic Accountants of Pakistan (IFAP) Office # 21.org.org. Cell: +92 300 531 3597 Emails:[email protected]. Markaz G-11.pk [email protected] admissions@ifap. Index designed and written by: R&G Indexing Service For your project qoute: Mr. or emails:ifap. whether an IFAP member or not. The Institute reserves the right to refuse any matter of advertisement detrimental to the interest of the Institute.org. Fax: +92 51 222 0872.org.pk. 430 4525. First Floor.org. Islamabad-Pakistan Tel: +92 51 222 0872.pk secretary@ifap. [email protected]. fax or email us articles. [email protected]@gmail.com [email protected] [email protected]. papers.