KARACHI: Hascol has disclosed to the PSX that they had possibly uncovered some fake purchases against the company’s fixed assets. The revelation came as the company was completing its investigation and seeing the impact on the accounts.
In a press release, the company said that it suffered significant losses in 2019, which were then declared in the Company’s financial statements. “These losses were mainly related to Forex and Interest Rate Risk and extreme volatility in international oil prices, which affected Pakistan’s entire Oil Marketing Industry,” the statement read.
In 2020, a new CEO and chairman were appointed to make the company financially stable. Alan Duncan, a former UK Minister, was brought in as chairman, and Adeeb Ahmad, corporate investment and restructuring professional, was appointed CEO of Hascol.
This task has been made highly challenging, especially in the current uncertain climate due to the effects of the COVID-19 pandemic on Pakistan and the world and Hascol’s significant outstanding debt levels and working capital squeeze, the company said.
“Hascol is making due progress towards ameliorating its financial position and is hopeful that its outlook will be positive. However, the legacy of its recent past must be addressed, and Hascol’s Board aims to deal with its regulators transparently and is prepared to make any adjustments, if ever required, to its financial statements.”
The press release comes after Hascol was put on the defaulters’ list by the PSX.
Hascol is the second-largest oil company in Pakistan, which has now defaulted around Rs60 billion.
Despite such a significant financial default in Pakistan’s history, the government did not initiate any inquiry or investigation against the company. The company, in its statement, has accepted that the internal auditors of HPL submitted evidence to its Board of Directors (BoDs) regarding the ‘false purchase orders‘ and misappropriation in the company during 2019.
The HPL chairman Alan Duncan released the statement in a letter to the Securities and Exchange Commission of Pakistan (SECP) and Pakistan Stock Exchange (PSX) said, “the company’s Internal Auditor received a whistleblower statement and evidence from within the company that in 2019 a series of false purchase orders were created and entered into the company’s books. The internal auditor, as required by the procedure, referred the matter to the Board Audit Committee, which, at its meeting last week, concluded that there is sufficient evidence in support of the accusation to justify referring the matter to the full Board of Directors.”
Recently, the management of the PSX has put the name of Hascol Petroleum Ltd on the list of defaults for failure to comply with the rules and regulations of the exchange. Hence, the share trading of the company has been suspended at PSX.
The company’s basic allegation failed to hold the annual general meeting for the shareholders and submit yearly audit accounts for the year 2020.
However, a media report said that the company had defaulted around Rs23 billion of the National Bank of Pakistan (NBP), Rs6 billion of Habib Metropolitan Bank (HMB), Rs5 billion of Habib Bank Limited (HBL), Rs4 billion of Band Alfallah Limited (BAFL), Rs5 billion of Meezan Bank Limited, Rs4 billion of Askari Bank, Rs1.5 billion of Dubai Islamic Bank, Rs4 billion of Askari Bank, Rs2 billion of Silk Bank.
HPL was incorporated in Pakistan as a private limited company on March 28, 2001. On September 12, 2007, the company was converted into an unlisted public company. The company obtained an oil marketing license from the Ministry of Petroleum and Natural Resources in the year 2005 and acquired assets of an LPG licensed company in the year 2018.
The company is engaged in the procurement, storage and marketing of petroleum, chemicals, LPG and related products.
