Two Former FESCO Executives Arrested
The Federal Investigation Agency has intensified its investigation into an alleged Rs11.96 billion electricity procurement fraud involving former FESCO officials and Sitara Group companies.
Immigration officials stopped Sitara Chemical Industries chief Mian Muhammad Idrees at Lahore’s Allama Iqbal International Airport as he attempted to travel abroad.
His name had been placed on the Provisional National Identification List because of the continuing investigation.
Some media reports described Idrees as arrested. However, a senior FIA official told Dawn that he was prevented from leaving Pakistan but was not taken into custody at that stage.
The FIA arrested former Faisalabad Electric Supply Company chief executives Khurshid Alam and Ahmad Saeed Akhtar.
A court later granted investigators five days of physical custody for questioning.
The agency said other individuals named in the case would also be questioned as the investigation progressed.
Power Agreements Allegedly Violated Regulatory Rules
The case concerns electricity transactions conducted between 2007 and 2015.
According to the police report, Sitara Energy Limited and Sitara Chemical Industries Limited allegedly worked with FESCO officials to secure unlawful financial benefits.
Investigators claim the arrangements caused an estimated loss of Rs11.96 billion to the national treasury.
Sitara Energy received a power-generation licence from the National Electric Power Regulatory Authority in 2002.
The licence was reportedly issued mainly for the company’s own electricity requirements.
The company was allowed to sell surplus power to approved bulk consumers.
However, investigators allege that FESCO was not included among those authorised purchasers.
The investigation claims Sitara Energy entered into a power purchase agreement with FESCO in 2007 without mandatory approval from NEPRA.
The agreement was originally valid for three years.
The FIA alleges that it was later extended and that electricity purchases continued after its expiry.
Investigators also claim FESCO purchased power at rates higher than those approved by the Central Power Purchasing Agency.
The case further alleges that Sitara Chemical purchased electricity from FESCO at lower rates.
Investigators believe this pricing arrangement provided unlawful financial advantages to the companies involved.
The FIA is also examining claims that subsidised gas was obtained by presenting a power plant under a different operating classification.
Several former FESCO executives and Sitara Group officials have been named in the case.
The FIA said the roles of additional public officials, company representatives and regulatory personnel would be determined during the investigation.
No final criminal responsibility has been established by a court.
Sitara Chemical Rejects Allegations
Sitara Chemical Industries has rejected the accusations connected to the company and its chief executive.
In a formal notice submitted to the Pakistan Stock Exchange, the company said the police report contained allegations rather than proven findings.
It maintained that the main allegations concerned another company that was not associated with Sitara Chemical.
The company said it would take appropriate legal action to protect its rights and interests.
Sitara Chemical also said its manufacturing and commercial operations were continuing normally.
It stated that the investigation had not affected its daily business activities.
The company’s denial will be examined alongside the evidence collected by the FIA.
Investigators are expected to review power agreements, regulatory approvals, tariff records and financial transactions.
They may also question former FESCO and NEPRA officials over their alleged roles in approving or facilitating the arrangements.
The FIA said the investigation remained active.
All suspects are entitled to the presumption of innocence unless the allegations are proven before a competent court.
