ISLAMABAD: The military authorities have apparently dumped the Rs2 billion National Logistic Cell (NLC) scam case against the three retired generals as court martial proceedings against them have not commenced a year after they had been recalled into service and taken into custody.

Ironically, the trial of the two civilians in the said case has also been stalled as the entire record of the NLC scam is with the military authorities; it has not been shared with the National Accountability Bureau (NAB).

When PAC discovered the scam

The NLC scam surfaced during the Public Accounts Committee (PAC) proceedings in 2009 when the committee was examining the audit objections raised by the Auditor General of Pakistan (AGP) during the 2004-2008 audit of the NLC.

According to the audit, the administration of the NLC heavily invested in the stock exchange in complete violation of government rules.

They not only borrowed money from commercial banks on high interest rates, but also used pensioners’ money to invest in the stock exchange.

In the process, the audit discovered that they invested over Rs4 billion in the stock exchange and caused a loss of nearly Rs1.8 billion.

When the PAC was apprised of this in 2009, it asked for an inquiry into the issue. The initial inquiry was carried out by a senior military officer in January 2010, formal inquiry was ordered during November 2010 and its report was submitted to the Chief of Army Staff General Ashfaq Parvez Kayani in February 2011.

The formal inquiry report concluded that five ex-employees of the NLC — three retired generals and two civilians — were responsible for the decisions and the losses incurred during 2004-2008.These five men were: two retired Lt-Generals, Khalid Munir Khan and Mohammad Afzal Muzzafar, who served as officers in-charge in the NLC from January 2005 to June 2005 and from June 2005 to October 2008, respectively; Director-General of NLC Maj-Gen (retired) Khalid Zaheer Akhtar (July 2002 to January 2008), Director Finance and Accounts Najibur Rehman (October 2002 to April 2007) and Chief Finance Officer Saeedur Rehman (June 2004 to October 2008).

COAS General Ashfaq Parvez Kayani ordered an inquiry into the matter, the report of which was submitted to him in February 2011.

In September 2011, the military authorities ordered that the evidence be recorded in September 2011 after which the retired generals were supposed to be indicted.

(The recording of the evidence in the Pakistan Army Act is equivalent to the 173 report (Challan) of the Criminal Procedure Code (CrPC) which the civilian prosecution agencies prepare before putting an accused in trial.)

Kayani steps in

In September 2012, the Inter Services Public Relations (ISPR) announced that General Kayani had ordered that the two generals be recalled into service so they could be court martialled for the role they played in this scam.

At that time, the military spokesman claimed that this was the first time that any general was recalled for the disposal of a case.

Under Section 92 of the Pakistan Army Act (PAA) 1952, offences relating to the misappropriation of government property/criminal breach of trust, are not time-bound.

Those who are accused of such crimes can be recalled even after retirement for a court martial.

The same act, however, also sets a deadline of 32 days for trying the accused in a military court.

A soldier turned lawyer Colonel (retired) Sardar Abdul Aziz Chandio said that after recalling the retired generals they (the generals) should have been tried within the prescribed duration.

“It is called ‘taken on strength’ (TOS) when an army person is recalled for the investigation or trial in any matter and kept detained at a designated place,” he said.

He added that the first step after the accused are recalled and detained is the recording of the summary of evidence (S of E) which is similar to the challan (in the criminal procedure code).

At this stage, the initial allegations against the accused are probed and the statements of witnesses as well as of the accused are recorded.

The trial of the accused has to commence within eight days of them having been taken into custody otherwise, the commanding officer of the dealing unit has to explain the delay in a report to the brigade command.

Within the next fortnight, the general officer commanding (Major General) has to submit a similar report to the corps commander.

If the trial is not commenced even after 32 days, the commanding officer submits a report to the Judge Advocate General (JAG) explaining the delay. This is forwarded to the COAS.

The latter can then decide the fate of the accused. He either orders that the proceedings be quashed or directs the unit concerned to put the accused in the trial, said Mr Chandio.

“But in the NLC case the matter is still pending. This inordinate delay is inadmissible under the PAA,” he added.

Dawn has been told that there are certain reasons for the lack of action in this case.

“Since two civilians are also involved in the NLC scam and NAB is examining the matter,” said one observer who has been watching the issue closely, “it would be embarrassing if the generals are given a clean chit and the civilians are later found guilty by an accountability court.”

The Accountability Bureau waits for files

NAB on the other hand is waiting for the military authorities.

A senior NAB official, on the condition of anonymity, told Dawn that the bureau could not proceed against the civilians till it was provided the relevant documents from the NLC.

“NAB had already placed the names of Saeedur Rehman and Najibur Rehman on the ECL a year ago. It had also recorded their statements and is now waiting for the relevant documents and statements of some NLC officials which are currently with the military authorities,” he said.

“NAB officials have met the senior military officials at the General Headquarters in connection with this matter and during a recent meeting they promised to hand over the documents to NAB soon,” he added.

However, some retired military officials are of the opinion that the retired generals should be tried in the accountability court.

Soon after the ISPR announced that the generals were being recalled, Colonel (retired) Inamur Rahim had filed an application before the chairman NAB seeking the trial of the retired general in the accountability court.

In the application he stated that the civilian accused in the matter would get life imprisonment or at least ten years imprisonment if convicted in the NLC scam while the generals might simply have their pension revoked under the PAA.

This is why, Rahim argued, that the retired army generals should be charged and tried along with the civilians NLC officials.

The military spokesman did not comment on this matter when contacted.

‘Delay is normal’

Brigadier (retired) Wasaf Khan Niazi, counsel of retired generals, however said that his clients are still under the ‘open custody’.

He explained that ‘open custody’ is like bail which the civilian courts grant to accused persons being tried for some criminal charge.

He claimed that the investigation in the NLC scam has been carried out in accordance with the law and the matter was pending before the competent authority.

When asked about the ‘inordinate delay’ in the trial of the retired generals, Niazi said in some cases the prosecution took four years to commence the proceedings against the TOS accused persons. However, he did not identify these cases.