ISLAMABAD, Sept 19: The Federal Investigation Agency has arrested a former chief of the Trade Development Authority of Pakistan for alleged ‘misappropriation’ in export promotion schemes.

A source confirmed to Dawn the arrest of Tariq Puri, who headed the TDAP from Oct 1, 2010 to July 7, 2012. His contract was terminated after he developed differences with the then commerce minister.

Several unsuccessful attempts were made to contact senior officials of FIA’s Sindh directorate to get their version.

Prime Minister Nawaz Sharif had directed the FIA on August 6 to collect evidence and initiate criminal proceedings against officials, exporters and companies allegedly involved in the scam involving ‘misappropriation’ of Rs1.27 billion.

It appears that the FIA conducted an inquiry which led to the arrest of Mr Puri, who headed the TDAP when the export promotion schemes – opening retail outlets and exporters’ offices abroad and freight subsidy for live seafood – were used for embezzlement.

Mr Puri had replaced Mohibullah Shah, a retired BS-22 officer, who had joined the authority in 2008.

On a recommendation of the first inquiry report, the government has already cancelled the contract of Abid Javed Akbar Ali for his involvement in the scam. Mr Akbar was appointed head of the TDAP in July 2012.

The first inquiry conducted by the commerce ministry for 2013 shows that senior officials of the TDAP drew on April 5 Rs767.67 million, which was disbursed in a single day.

The commerce ministry has taken disciplinary action against Abid Javed Akbar, TDAP secretary Abdul Kabir Kazi and TDAP director general (facilitation) Abdul Karim Daudpota.

Spokesman of the ministry of commerce Mohammad Ashraf told Dawn that Mr Puri had been arrested by the FIA on their own findings. He said the commerce ministry’s inquiry into corruption in the TDAP over the past few years was in progress.

The commerce ministry has constituted a three-member committee headed by additional secretary Sajjad Ahmad to investigate disbursements made under the export incentive schemes in 2011 and 2012. The finance division released Rs1bn in 2011 and Rs2bn in 2012 for these schemes.

The first inquiry report found that some of the payments were made against second or third instalments of claims which had already been paid in 2011 and 2012 by the TDAP.

This is the second biggest scandal after the multi-billion-rupee National Insurance Company Limited scam, another subsidiary of the commerce ministry. But the ministry did not initiate internal investigation into the NICL scam.

According to the TDAP scam inquiry report, most of the payments were made on fabricated documents, violating the criteria laid down in public notices and business procedures.