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Tuesday, March 21, 2023

PIA Audit Report: Another attempt to target its CEO

Air Marshal Arshad Malik is holding two positions — one of an Air Marshal in the PAF and the other of CEO in the PIA. He is on deputation approved by the Prime Minister. PIA Audit Report declares his appointment irregular. However sources inside the PIA point out that PIA's strong unions and lobbies threatened by disciplinary actions by the CEO are trying to throw him out. Previously, Dr. Musharraf Rasool, was also removed on similar technical grounds through court petitions.

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A PIA Audit report has detected a number of irregularities, non-recoveries, violation of rules & regulations, especially in the appointment of the Pakistan International Airlines’ chief executive officer, recommending his removal from the position.

However sources inside PIA reveal that strong lobbies outside and PIA Unions from the inside are joining hands to remove the new CEO – the way previous one, Dr. Musharaf Rasul, was thrown out on technicalities.

Dawn, country’s leading English paper reports that an audit report issued by the director general, commercial audit and evaluation, on the accounts of Pakistan International Airlines Corporation (PIACL), has found that Air Marshal Arshad Malik is holding two positions — one of an air marshal in PAF and the other of CEO in the PIA.

But sources inside the PIA, GVS spoke with, point that that is hardly a finding since Air Marshal Arshad Malik, is a serving PAF officer who was appointed CEO PIA, by PM Imran Khan, on deputation and this is publicly known.

PIA Unions and lobbies are targeting the CEO?

Audit Report, cited by Dawn, adds that Malik would have resigned from PAF to join as CEO in the PIACL if properly selected. While holding his appointment irregular, the report said that his appointment as CEO is “based on clear favouritism, mala fide and out of procedure process”. Other PIA sources however point out that Unions and lobbies don’t let any CEO work to reform and fix PIA.

Arshad Malik, and his team, had taken on the unions head on and removed hundreds of PIA employees who were holding fake degrees. Under his management, in last one year, PIA has increased its revenues by 41%. National Airline is under debts of more than Rs. 400 billion and no business entity is prepared to invest in PIA. Airline also finds it difficult to raise finances from the market. And when it succeeds as it recently did through Standard Chartered Bank (SCB) Dubai it has to pay a much higher mark up.

While reacting to the audit report, the PIA spokesman said that the airline won’t comment on the matter, adding that the case is being heard by the Supreme Court

The auditors have recommended that “immediate recovery of allowances … be initiated and the case be referred to independent agency to probe the matter of irregular appointment”.

The auditors have also recommended that the aviation division should hold a high-level inquiry to fix responsibility on persons at fault, especially on the board of directors which has committed the very blunder earlier highlighted by the Supreme Court in the case of Dr. Musharraf Rasool Cyan, the then CEO of PIACL.

Other sources in the PIA however point out that Dr. Musharraf Rasool Cyan, was a Phd in economics from Georgia Tech University, had served as Chief Economist KP with distinction, had worked with World Bank and other international bodies and was appointed by ex-PM, Shahid Khakkan Abbassi, on the basis of his strong credentials. He came up with forward looking solutions but became a victim of the same lobbies who are now after the current CEO. Some pilots who wanted PIA to extend the age of retirement to 65 were reportedly working to dislodge Dr. Musharraf Rasool Cyan. Dr. Cyan had refused extending the retirement age despite requests from some very powerful quarters. He paid through the loss of his job – PIA sources reveal.

Read more: PIA Performing Better than Ever Before: Losses Dip by 18 Billion

The Dawn reports that the audit report contains 16 paras noting irregular appointments, including that of the CEO; “irregular procurement of services on account of development of indigenous In Flight Entertainment (IFE) solutions resulted in dubious financial deal worth Rs. 700 million; operating losses amounting to Rs5,282m; illegitimate elevation in allowances and benefits of officers on deputation from PAF (Rs71.86m); irregular induction of staff with fake degrees (Rs25.68m) and irregular payment due to dual benefits rewarded to CEO (Rs2.995m)”.

Other sources point out that PIA long haul international flights to Europe had been without an In Flight Entertainment System (IFE) for past several years, since at least 2014 leading to loss of passenger interest and loss of revenue, since competitor flights of Emirates, Itehad and Qatar offer state of the art flight entertainment systems making these attractive to families with children.

In 2016, PIA contracted with International firm, Panasonic, for putting up IFE systems in five of its planes. But the cost even then came out to be US $ 50 million that then amounted to Rs. 5.5 billion. In the end PIA could not implement the contract due to its monetary limitations. Current CEO, finally found a home grown solution through a Pakistani start up firm that has fixed IFE systems in 8 of PIA Boeings for only Rs. 700 million (Rs. 70 crore) in 2020. GVS had written an earlier report about the Inflight Entertainment Systems (IFE) in January this year.

PIA getting a new Inflight Entertainment System for Boeing 777 planes

Auditor General mislead: PIA Spokesperson

While reacting to the audit report, the PIA spokesman said that the airline won’t comment on the matter, adding that the case is being heard by the Supreme Court. The spokesman added that PIA would respect the court’s decision.

Read more: Will PIA fire employees who submitted fake degrees?

He said that in light of the apex court’s order, the CEO has already handed his powers to the board of directors. In a late-night press release, however, the spokesman said that some elements with vested interests had been misleading the auditor general to make audit paras.