ISLAMABAD: A two-star general (major general), who formerly headed the military-run National Logistics Cell (NLC), has been fired from army service after being found guilty in a multibillion-rupee investment scam, while a former three-star general (lieutenant general) has been reprimanded for his role in the case.

A civilian also was found guilty after a five-year investigation by the army into allegations of financial irregularities, lack of transparency and violation of rules and regulations in an investment made by the NLC in stock markets.

The NLC reportedly suffered losses to the tune of Rs1.8 billion between 2004 and 2008 because of getting loans from commercial banks at high interest rates and investing Rs4bn of pensioners’ money in stock markets. Additionally, kickbacks were received from companies through which the money was invested.

Initial inquiries by the Planning Commission on the orders of the Public Accounts Committee of the National Assembly had pointed to involvement of former quartermasters general retired Lt Gen Khalid Munir Khan and retired Lt Gen M. Afzal Muzaffar, former NLC director general retired Maj Gen Khalid Zaheer Akhtar and two civilians — Najibur Rehman and Saeedur Rehman. A quartermaster general, by virtue of the office, is the officer in charge of the NLC.

Accused recalled to service for trial before dismissal, another reprimanded

“The inquiry has now been concluded and has established that two retired general officers and one civilian officer were indeed responsible for making incorrect decisions of investments in violation to NLC rules and regulations, thereby causing losses to the organisation during this period,” the army said while making public the findings of the investigation.

The two generals have been punished under the Army Act.

Khalid Zaheer was “dismissed from service” and Afzal Muzaffar penalised with “severe displeasure (recordable)”.

Mr Khalid Munir was exonerated. Saeedur Rehman also was found guilty.

Khalid Zaheer’s dismissal from service entails forfeiture of rank, decorations, medals, honours and awards, seizure of pension, recovery of personal gains and cancellation of service and allied benefits, including medical facilities.

Afzal Muzaffar was given a light sentence of reprimand after being held responsible for violating procedures. He wasn’t found guilty of getting personal gains.

The case came to light when the PAC took it up in 2009 and ordered the Planning Commission to investigate it. The NLC administratively functions under the commission as an attached department.

The findings of the commission’s inquiry were referred to the defence ministry in 2010 for action against the accused military officers.

The officers had by then retired, but were recalled into service for trial under the military law.

“The Planning Commission probe had highlighted financial irregularities, lack of transparency and failure to observe rules and regulations caused by reckless decisions of chain of command of NLC,” the ISPR said.

According to the timeline of the case, the investigation committee of the Planning Commission finalised its report in January 2010. The findings were shared with the General Headquarters in September 2010. Following the receipt of the findings, the then army chief Gen Ashfaq Parvez Kayani decided to proceed against the accused under the Pakistan Army Act’s Section 94 instead of referring the matter to the National Accountability Bureau. An Army Court of Inquiry was convened in November 2010, which reported preliminary findings to the COAS in February 2011. Subsequently the then army chief ordered a formal investigation to allow a fair trial.

Summaries of evidence were recorded and submitted to the army chief in 2012.

The ISPR said the decision got delayed after the accused officers furnished “additional documentary evidence” in their defence, which required more time for scrutiny and establishing their veracity.

Army Chief Gen Raheel Sharif, the ISPR said, ordered a re-investigation for ensuring justice and transparency.

A committee of high-ranking officers, which re-investigated the case, evaluated the record of investments and interviewed all the witnesses before giving its findings, it said.

Published in Dawn, August 6th, 2015

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