Rebuttal to NAB Reference 19/2016 against Mr. Iqbal Z. Ahmed

Reference No 19/2016 filed by NAB is nothing but a web of deliberate contradictions and distortion of facts, false claims, misinterpretation of the court orders, and prepared with malafide intentions on the part of the Investigation Officer. The reason for this biased behavior on the part of the Investigating Officer and anomalies in the investigation report prepared by him was because he is in cahoots with Dr. Sahto (a highly corrupt person and a seasoned blackmailer who was dismissed from SSGC twice on grounds of corruption and fraud) who has a personal vendetta against the accused in the above-mentioned reference. It is stated that ALL Decisions for which the applicant has been accused for, in the NABs reference 19 of 2016, were taken with the approval of the competent authority i.e., the Board of Directors. It is a matter of great surprise that the Executive Board of NAB approved the filing of the Reference, despite obvious anomalies and discrepancies in the reference as under

Charges (No allegation has been made of Financial Gain on any accused)

Over Rs. 17 billion losses to National Exchequer
It stands confirmed from SSGC balance sheet and witness statements that NAB claims were baseless.
This fact is further substantiated by subsequent appointment of a professional accountancy firm (AFFC0) by The Supreme Court of Pakistan to work out the amount due because of the Contract between the two parties. The firm worked out a net amount of Rs. 1.5 billion including interest due to SSGC by JJVL which was paid by JJVL. The AFFCO report was also validated by Supreme Court as well as SSGC board of Directors. In view of the above it is clear no loss has been caused because of Contract with JJVL and NAB has wrongly calculated and amount Rs. 17 billion. In fact, the business contracts were very profitable for SSGC and in national interest. SSGC made over Rs14 Billion from JJVL account during the period 2012-2020.This fact has been confirmed by Mr. Shabi ul hasan a prosecution witness in his deposition dated before the accountability court.
Contracts Awarded at Exorbitant Rate.
The Honorable supreme court has determined that 43% to be the processing charge in the revenue sharing model. In 2014 when the MOU were signed the average highest Producer price was Rs. 72001 per metric ton and the dollar was around Rs. 105, therefore the average processing cost at US$ 237 works out at 34.56% way below 43 % as approved by Supreme Court. In view of the SC decision this charge is devoid of any merit. Moreover, the processing fee has been re-affirmed by the Islamabad High Court also. Detail Working is placed at Annexure 2
JJVL allowed to retain 50% LPG.
• All MoUs clearly state under Article 4- Extracted LPG/NGL –” fifty (50%) percent of the extracted LPG shall be retained for disposal by JJVL and JJVL shall pay to SSGCL a price equal to the monthly LPG base stock price of PARCO or OGDCL whichever is higher.
• Hence all LPG/NGL retained by JJVL is in accordance to the Memorandum of Understanding with the Board of Directors approval.
• Furthermore, SSGCs customer selling price is linked to the prevailing PARCO or OGDCL producer
price, whichever is higher, so no matter whom SSGC sells the extracted LPG/NGL to, it would still
generate the same amount of revenue and hence there is no question of a revenue loss by selling additional LPG/NGL to JJVL.
• The Hon’ble Supreme Court of Pakistan allowed JJVL to retain 100% LPG, therefore this charge also is devoid of any merit.
Contract to JJVL awarded without Competitive bidding.
The following are the facts:
• OGDCL floated a tender for KPD for extraction of LPG/NGL in 2012 as they were unable to construct their own LPG/NGL extraction plant and as per the Petroleum Policy non pipeline quality gas cannot leave beyond the field gate
• Five vendors purchased the tender document but only JJVL submitted Bid.
• JJVL submitted an initial bid of US$ 299 per ton quoted for each LPG & NGL. Later JJVL reduced the price to US$ 237 per ton for each LPG & NGL
• The tender and the reduced price were approved by OGDCL Board of Directors until the commission of OGDCL plant., the plant was finally commissioned in 2017.
• In the interim a petition filed in the Islamabad High Court challenging the process of the award of
contract to JJVL
• The Islamabad High Court Dismissed the Petition and Observed:
• “That the whole arrangement is transitional and meant only for 2 years. There is nothing on record to show that any Financial Irregularity is involved in the whole case, rather it has not even been alleged by the Petitioner“
• OGDC awarded the contract only after the Petition was dismissed by Islamabad High Court.
• Later SSGC also floated a tender for BOBI field on 3 July 2012, only JJVL participated in the tender. The price quoted by JJVL was US$ 299 per Metric Ton. Since the price quoted was very high. The tender did not materialize. It was therefore decided by SSGCL Board to sign an MOU.
• An MoU was signed by SSGC, after the approval of the Board of Directors, on the same terms and
conditions as the OGDCL Board of Directors approved for KPD by OGDCL i.e. US$ 237 per metric ton and in accordance with PPRA rule 42 C (ii) Alternate Method of Procurement, whereby only one manufacturer or supplier exists for the required procurement
• In its meeting held on 28 March, 2014 SSGC Board of Directors approved Extraction of LPG/NGL for KPD, Sinjhoro & Naimat Basal on the same conditions as already approved for Bobi field.
• The SSGC Board further Directed that the tender be floated, which was done on 25th May. Only JJVL participated in the tender till 25th June, therefore the tender date was extended to attract more offers.
• The tender was eventually cancelled by the Board of Directors its 464 Meeting held on 5 November 2014 as the Board wanted to Float a new consolidated tender including all fields from where LPG can be extracted.
• Consolidated Tender could not be floated as SSGC did have the Extraction rights for Naimat Basal and for the remaining fields the exact volume of Gas and the duration of Contract was not known as OGDCL was to commission its own Facility.

SSGC Board approved the signing of MOU with JJVL based on the tender floated by OGDCL and SSGC where JJVL was found to be the only technically suitable bidder. Moreover, the extraction price was arrived at after an extensive and transparent tendering process which was upheld by the Hon’ble Islamabad High Court. Subsequently, The SC in its decision had endorsed the 18-month MOU between the two parties which expired in June 2020.

From the above it is apparent that due process was followed as per law in the award of the contracts to JJVL
Misuse of Authority in award of Contract
The reference alleges “misuse of power” and “willfully failed to exercise authority”, are in any case invalid since the management was not authorized to take decisions regarding the award of contract to JJVL. The award of contract to JJVL was approved by the Board of Directors of both SSGC and OGDCL, which is the competent authority for doing the same.
It is interesting to note that two different SSGC Boards comprising different members and the Board of Directors of OGDCL approved the decision of awarding the contract to JJVL—Yet only five Managing Directors has been included in the reference, while the Board of Directors and Operational Management of SSGC have been left out in the reference.

Conclusion
• Reference No 19/2016 filed by NAB is nothing but a web of deliberate contradictions and distortion of facts, false claims, misinterpretation of the court orders, prepared with malafide intentions.
• All the actions taken with respect to JJVL have been Prima facie validated by Supreme court. Further at the time of initial contract with OGDCL Islamabad High court had also held the process transparent.
• The Sindh High Court during the bail proceeding of Zuhair Siddiqui and Shoaib Warsi observed “No sufficient incriminating material specifying the role of the petitioners relating -to allegation of misuse of authority and corruption or the benefit derived by the petitioners or extended to M/S. JJVL has been produced by the NAB, therefore, the possibility of misuse of authority and the malafide, on the part of NAB Authorities as alleged by the learned counsel for the petitioners, cannot be ruled out”.
• Supreme Court in its order observed: “The High Court, in the Impugned order, has dealt with the matter very exhaustively and noted so many instances where illegalities have been committed particularly In the matter of arrest and keeping these respondents in detention and also as a fact made an observation that the allegations in the Reference against these respondents are vague and no specific role identifying misuse of authority or corruption on their part were shown and further no material was shown which could suggest that these respondents have been beneficiaries of the alleged benefit to JJVL.”
• It is quite clear that the initiatives taken by the Management and duly approved by the SSGC and OGDCL Boards were in line with the acceptable process and guidelines. SSGC was able to book over Rs 14 billion from 2012 to 2020 income because of these initiatives. Furthermore, the Honourable Supreme Court has Prima facie held the actions valid and endorsed the 18-month MOU between JJVL and SSGC.
• It is very interesting not a single member of the Board of Directors has been implicated in the case. In fact, no one was even examined by NAB, thus the reference is based on malafide.
• In the Reference allegations are vague and no specific role identifying misuse of authority or corruption were shown and further no material was shown which could suggest that these respondents have been beneficiaries of the alleged benefit to JJVL
• The Reference suffers grievously from misstatements, misrepresentations, concealment of irrefutable and vital facts, false accusations, unsubstantiated allegations, and hearsay in complete disdain for the truth. That from the material on record it is apparent that no useful purpose would be served by continuation of the proceedings as there is no probability that any accused would be convicted of the offences.

Annexure 2

Exorbitant Processing Charges for LPG and NGL paid by SSGCL as per NAB (September 2012 to December 2015):

In the case of LPG and NGL extraction processing charges, the illegal gain by the JJVL was worked out till 31st December 2015 and corresponding loss to national exchequer is $39.410 million equivalent to more than Rs. 4 billion and details are as under:

NAB has calculated Average LPG Producer price Rs. 72001 per metric ton and exchange rate of $1 = Rs 105 (Reference Volume 5 Page 984)

Field	LPG Qty (MT)	Amount USD	Amount (Rs 100)
Badin	129,814	17,784,491	1,867,371,555
Bobi	68,678	9,408,864	987,930,720
KPD	89,173	12,216,653	1,282,748,565
Total	287,664	39,410,008	4,138,050,840

Option 1 Revenue Calculated at Processing Rate of $237/MT and Plant Efficiency at 95%

Total LPG Extracted (MT) 287,664

Total Revenue (Rs) 20,712,095,664 (Producer Price Rs. 720001 x LPG Extracted)

Extraction Charges (Rs) 7,158,518,640 (Total LPG Extracted x $237 – as per NAB $1 = Rs. 105)

Net Revenue (Rs) 13,553,577,024

Option 2 Revenue calculated at Processing Rate of $100/MT and Plant Efficiency at 70% as per OPI offer

Total LPG Extracted (MT) 211,963 (Product extracted at 70% using the formula 287664*70/95)

Total Revenue (Rs) 15,261,544,173 (Producer Price Rs 72001 x LPG Extracted)

Extraction Charges (Rs) 2,225,610,947 (Total LPG extracted x $100 – as per NAB $1=Rs. 105)

Net Revenue (Rs) 13,035,933,226

Difference between Option 1 and 2 with respect to Net Revenue (Rs) 517,643,798