eobi scandal presentation

26
FINANCIAL MANAGEMENT

Transcript of eobi scandal presentation

FINANCIAL MANAGEMENT

PRESENTED TO Mam Shumaila

PRESENTED BY Hafsa Shahbaz Sehrish Afzal

Introduction

This scheme is operated under the Employees’ Old-AgeBenefits Act, 1976 and covers employees working inindustrial, commercial and other organizations. TheEmployees Old-Age benefits institution (EOBI) facilitates

theprovision of this benefit by performing the followingfunctions:-• Identification & Registration of Establishments and

Industries.• Identification & Registration of Insured persons• Collection of Contributions• EOB Fund Management• Provision of Benefits as per Laws

Employer Responsibility

Employer is bound to pay 5% of minimum time scale salary declared by government for each employee either permanent or contractual.

Responsible to deduct 1% contribution of minimum time scale salary from employees’ salaries and deposit in timely manner.

To facilitate EOBI and employees for issuance of EOBI Card.

Maintain the contribution statements, monthly and annually and provide the detail to EOBI department.

Responsible to maintain the record and show to EOBI Official on demand.

Employee Responsibility

Employee is bound to pay 1% of minimum time scale salary to EOBI as his own share of contribution.

To retain the EOBI Card in safe custody. File the EOBI Claim when applicable.

Objectives

Extend Coverage of “State Pension Scheme” toall persons employed in Pakistan over areasonable period. Transform EOBI management into most efficient,economical and effective machinery for operatingPublic Pension Scheme. Promote voluntary registration by employers &employees contributions by making the Schememore attractive

Hierarchy

Current Chairman Mr. Muhammed Sualeh Faruqui

Introduction of CaseEx Chairman of EOBI Zafar Gondal is brother of

exFederal Minister of food and agriculture. Theemployees of EOBI, throughout the country, are

onpen-down strike from 3rd November 2010

againstmass corruption for DEMAND TO REMOVE thechairman 

Issues to Investigate

Illegal/unauthorized purchase of vehicles and sanction of car loans

Illegal appointments and award of training program to the highest bidder.

Illegal investment in Silk Bank and Tameer Micro Finance Bank

Illegal investment in the purchase of shares of M/s Textile

Illegal investment in real estate and many other allegations and issues. 

Illegal collection of flood relief  fund  namely "KASHKOL

Transfer honest officers and staff to hard areas.

Illegal/unauthorized purchase of vehicles and sanction of car loans

Unauthorized purchase of 93 vehicles and carsby the EOBI Chairman Zafar Iqbal Gondal

amongwhich five were 1800cc cars for his lavishspending from employees’ pension funds.According to rules of EOBI sanction of car loansto the fresh employees was Illegal stillhe sanction loans to fresh employees forpurchase of cars.

Illegal appointments and award of training program to the highest bidder

For recruitment and selection proper procedurewas adopted still illegal hiring of 238 illegalemployees were made. EOBI hire other institutions through biding fortheir training programs. In the period Zafar

Gondal,the training program was awarded to the highestBidder.

In 2011-2012, illegal appointments of 238employees are made by the EOBI ChairmanZafar Iqbal Gondal. Due to non transparency and worst nepotisminstitution faced irreparable loss. From now onwards the recruitment andselection procedure is performed by NTS.

Illegal investment in Silk Bank and Tameer Micro Finance Bank

According to EOBI’s rules, the institution can only investin a bank which fulfills the following criteria: Bank must be a commercial bank Bank should be graded as A+ by State Bank of PakistanBut Gondal did not follow the rules and invested inTameer Bank for three months which is not a commercialbank and was graded as negative by State Bank of Pakistan

atthat time. EOBI did not get any profit from investment andalso the amount was not returned to institution after threemonths.He also invested in Silk Bank which was a commercial bankbut graded as negative by State Bank of Pakistan.

Illegal investment in the purchase of shares of M/s Textile

After heavy losses in 2007/08 because ofinvestment in stock exchange, government

ofPakistan banned EOBI to invest in shares.

ButGondal purchased shares of M/s Textile for

Rs 20per share and after few days the share pricewere Rs 3 to Rs 4 per share and EOBI face

heavylosses.

Illegal investment in real estate and many other allegations and issues

Gondal purchased the Crown Plaza, located in  F-7Markaz, Islamabad, on exuberant price measuring 600sqyards, and paid Rs1 billion, almost 100 percent higherthan the market value of the property. The deal was finalized without the approval of EOBI’sBoard of Trustees. The property was valued at Rs626 million Payment of Rs16 billion made by the EOBI Chairman ZafarIqbal Gondal to DHA officials for purchase of DHA commercialproperties along DHA Expressway which included 221

Kanal ofland at an unbelievably exorbitant price.

Illegal collection of flood relief fund namely "KASHKOL

The EOBI Chairman Zafar Iqbal Gondal generously

announced to donate Rs.1 billion to Prime Minister's Flood Relief Fund from EOBI's poorestPensioners' Fund Despite of this fact that EOBI andits Fund is a Trust Money, which cannot be donated He also established his own Flood Relief Fundnamely "KASHKOL" on parallel to Prime Minister's Flood Relief Fund from Employees and generalpublic and deposited this huge amount to hisprivate bank account 

Transfer honest officers and staff to hard areas

Vigilant officers and honest employees who take

step and raise their voice against illegaloperations of Chairman Zafar Iqbal Gondal

aspunishment he either suspend them or

transferthem to remote areas without any reason 

NAB’s involvement

In 2012 a complaint about EOBI was received by

NAB on which action should be taken with in 9

months but no investigation was held. In 2013 another complaint was launched

butagain it could not be upgraded into an

inquiry. 

Actions taken by The Supreme Court

The Supreme Court has took suo moto notice of the EOBI corruption scandal direct FIA to investigate

The federal agency has also sought the details of assets and bank accounts of the accused persons as well as suspected front-men.

The Federal Investigation Agency (FIA) has arrested the former chairman Zafar Iqbal Gondal and director general finance of the Employees’ Old-Age Benefits Institution (EOBI) in connection with a suspicious multi-billion-rupee real estate deal.

Recommendations

Extend coverage of pension scheme to all persons employed in Pakistan over a reasonable period.

The investment should be thoroughly planned and phased over a reasonable period of time.

The computerized systems for maintenance and updating of records should be developed.

EOBI should hire an external auditor to check over the assets and employees bank accounts.

Training program should be conducted by EOBI itself.

Chairman should be hired with transparency and without nepotism.