KOHAT, March 13: The Kohat Development Authority (KDA) sustained a loss of Rs73.18 million due to embezzlements and financial irregularities during the period between 2003 and 2007, revealed inquiry reports.

The financial scam unearthed, following two different reports, said that the authority was fraudulently deprived of the benefits collected through auctioning of plots and collection of various taxes by the technical directors and the accounts officer by showing fake expenditures and making false payments of huge interest on non-existing loan.

The audit report and the report by the anti-corruption department reveal corruption at a massive scale. An official told Dawn that arrest of those responsible was expected within a fortnight.

The report had been sent to the chief executive of the authority, district coordination officer, Kamran Zeb who had issued notices to the project director Engr Azam Shah and the accounts officer Javed Shah. Assistant Coordination Officer Mudassar Riaz had been appointed as inquiry officer to probe and recommend action against the corrupt officials.

The inquiry was conducted by an audit firm on the five point written complaint of an MPA Engr Syed Qalb-e-Hassan, which held the deputy and assistant directors (technical), sub-engineers/tube-wells in-charge, divisional accountant and the KDA accounts officer responsible for bankrupting the department.

The report confirms that the KDA deposited Rs8 million in Natover Leasing Company in violation of the rules the government finance department. The Natover had been declared bankrupt and Rs8 million invested in it by the KDA had gone down the drain along with billions of that of other people and firms.

The KDA also deposited Rs260 million in Natover between June 5, 2006 and October 12, 2006 but no profit had been shown on the receipt side. Similarly, Rs8 million were deposited in the Allied Bank from August 1, 2005 to August 26, 2006 but zero interest had been claimed by the KDA for unspecified reasons.The KDA deposited Rs26.6 million in the National Bank from March 22, 2007 to May 16, 2007 but no profit had been mentioned in the accounts statement.

Similarly, the total interest for the period 2003-04 and 2006-07 of the KDA from these institutions comes to over Rs20 million but the financial statement for the same period shows interest at over Rs16 million. The difference amounts to loss caused intentionally.

Similarly, the Area Development Scheme (ADS), Karak remained under KDA from March 19, 1990 up to March 19, 2006 according to different notifications issued by the defunct Provincial Urban Development Board and project director KDA.

Then ADS was declared as Karak Development Authority but the order never materialised for unknown reasons. An amount of Rs7.318 million was outstanding against the KDA on June 30, 2007 but the authority kept on spending its money there which deprived it of financial benefit. The order was not followed just to keep an extra post of deputy director.

The biggest fraud detected in KDA was of Rs50.54 million shown as payment of interest on loans. But actually KDA had not borrowed any loan from any financial institution during 2003-04 and 2005-06.