KDA fails to explain why Rs410 million investments were concealed from SHC

As the Sindh High Court came to know about the Karachi Development Authority’s Rs410 million investments in saving schemes, it directed the official assignee to make sure that the KDA’s saving certificates are liquidated and the proceeds are appropriated towards the outstanding pension dues of retired KDA employees.

Hearing petitions pertained to the non-payment of outstanding dues to over 1,000 retired KDA employees on Tuesday, the SHC’s division bench, headed by Justice Nadeem Akhtar, took notice over the concealment of facts concerning the investment of Rs250 million and Rs160 million by the KDA in the NIT units and the national saving certificates, respectively.

In his application, the counsel of the retired employees requested the court to direct the official assignee to collect the information about the NIT units and the national saving certificates owned by the KDA. The counsel alleged that the KDA had deliberately concealed its major investments/assets from the court to deprive the retired employees of receiving pensions in pursuance of the court orders.

Director finance and accounts Atta Abbas and member finance Abdul Qadeer conceded that the mentioned amount belonged to the KDA. They said the investment was made by the KDA for regular income.

KDA officials, including director general Nasir Abbas Soomro, said pensions would be paid by the KDA after selling its properties as ordered by the court in terms of the proposal undertook by the authority as well as from loan to be obtained from the Sindh government.

To a court query about the concealment of investments, they were unable to explain or justify as to why the investments were concealed from the court. The court observed that such conduct on part of the KDA had created a doubt if the KDA had had any intention to pay pension amounts when a paucity of funds had been consistently pleaded by the KDA at every court hearing.

The court observed that as the deadline for settling the long outstanding pension dues was approaching fast and the possibility of getting a loan by the Sindh government was uncertain, the court has no other choice except for ordering the official assignee to ensure that the KDA’s investment certificates are liquidated and the proceeds are appropriated towards the subject liability of the pension before December 31, the deadline for the payment of outstanding dues to the retired employees.

In his statement, the additional secretary finance said the government had been releasing an amount of Rs204 million every month as a grant to the KDA to meet the salary, non-salary and pension expenditures and that a total amount of Rs11.19 billion had been released to the KDA for this purpose from the year 2016 till now. The court observed that the statement also proved that the KDA is a self-generating entity having sufficient sources of revenue and that the finance department had asked the local government department to resolve the subject issue.

The KDA officials said the Sindh government had not taken any steps concerning the request made by the KDA for the grant of loan. But special secretary finance Shahab Ansari said no such request or summary in this behalf had been received from the local government department.

The court observed that notices had been issued to the finance secretary and the local government secretary to appear before the court concerning the loan requested by the KDA, however, both the secretaries had not filed any report nor had they appeared before the court to explain the non-compliance of the court directives which was given to them for the assistance of the court so the issue could be resolved equitably.

The court issued show-cause notices to the finance secretary and the LG secretary as to why proceedings should not be initiated against them for deliberate and willful disobedience of the court order.

The court also issued notice to the chief secretary to submit a report given the non-compliance of the court order by the finance secretary and the LG secretary and appraise the court about the request for a loan made by the KDA and adjourned the hearing till December 15.