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  1. #1
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    [Report] Audit reveals massive irregularities in first two PSL editions

    Audit reveals massive irregularities in first two PSL editions

    ISLAMABAD: The special audit report of first two editions of Pakistan Super League (PSL) has revealed massive irregularities in the T20 League as the national exchequer has to face hundreds of millions of dollars loss due to sale proceeds of commercial rights to franchises on cheaper rates.

    The Auditor General of Pakistan (AGP) conducted a special audit report for the first two editions of PSL. The report has revealed that the market value of the PSL was up to $300 million in 2017 but the PCB management sold the commercial rights to the initial franchises in just $93 million in 2015.

    As per the special audit report, the cricket board awarded $14.08 million contract to the same company which was already working with PCB. According to PCB record given to audit authorities, the PSL contracts were not widely advertised in international press and media. Advertisement in international media was not available with the PCB management. Rather conspicuously, PCB’s earlier partner got the PSL contract as well. It was found that only an Indian firm/consortium was handling all major PSL contracts. The parent company name was M/s Technology Frontier established in Madras, India.

    Similarly, the audit report further reveals that PCB awarded irregular and non-transparent award to the tune of $57 million to the franchises that were not even qualified for the franchise rights. According to the report, bids were required to be received at designated email address but bids against firms namely M/s JW International, ARY Digital and Qatar Lubricants were received in hard form only. It was mandatory for a competing firm to produce financial statement of previous two years (with at least one year account being audited) in order to qualify for the selection process.

    This implied all such firms/companies, which were not maintaining or could not produce their annual audited financial statements, were not eligible to apply for the franchise rights. Contrary to such a basic requirement, franchise rights for Islamabad United were awarded to M/s Lenonine Global, which was a British Virgin Island (BVI) based company, having no prior annual audited financial statement. Similarly, Salman Iqbal (of ARY Digital) applied as an individual for franchise rights acquisition tender. He was unable to submit his financial bid by the prescribed deadline; even then his bid was accepted.

    Moreover as per terms of his franchise agreement with PCB, he was required to establish an SPV for his PSL franchise team (Karachi Kings) within one month of signing of the franchise agreement. The same was also not done within time. In fact it was done after the lapse of four months beyond deadline. The payment of franchise fee was delayed by the franchise owner and PCB (as per governing council minute) had to encash his bank guarantee.

    Similarly, the PCB spent Rs12.64 million on the TA/DA of journalists covering the PSL. The report further reveals that the state has to face Rs176.43 million loss due to non-deduction of tax on payments to non-resident and resident parties.

    When contacted PCB Chief Operating Officer (COO) Subhan Ahmed for the cricket board’s version, instead of him, PCB’s senior manager media Raza Kitchlew contacted this scribe and said the the Board would not respond to any query of this scribe.

    Below are the key findings of AGP’s special audit report:

    1. Loss to PCB due to irregular payments to franchises in excess of agreed shares of central pool income for Rs248.61 million.

    2. Loss to PCB due to irregular award of compensation to the PSL franchises - Rs54.49 million.

    3. Unjustified auction of franchises causing loss - $11 million.

    4. Irregular advance payments to vendors - Rs246.04 million.

    5. Extra expenses due to non-charging of venue hiring costs to Central Pool Income - Rs306 million.

    6. Non recovery of amounts due from franchises - Rs32.05 million.

    7. Non-recovery on account of gate receipts from M/s Kayzoonga Rs4.99 million.

    8. Irregular excess expenditure on production of PSL-II Final without proper estimation $179,815 (Rs18.88 million)

    9. Loss to government exchequer due to non-deduction of government dues - $255,591.

    10. Unauthorised and unlawful transfer of PSL funds in the third party bank accounts outside Pakistan -Rs145.14 million.

    11. Irregular financial management due to receipts of PCB’s revenue in third party US dollar account --Rs166.76 million.

    12. Loss due to non-auction of commercial/broadcasting rights Rs13.08 million.

    13. Wasteful expenditure on account of TA/DA of journalists Rs12.64 million.

    14. Loss to PCB due to non-charging of branding expenses to central pool income account of PSL Rs11.86 million.

    15. Irregular and non-transparent award of franchise rights to the unqualified firms $57 million.

    16. Non-transparent award of contracts in Dubai to same firm/consortium $14.08 million.

    17. Loss due to sale of media rights at a price even lower than the purchase price $0.14 million.

    18. Irregular award of instadia media management rights $4.5 million.

    19. Irregular and uneconomic award of event management contracts $3.86 million (Rs403.94 million).

    20. Irregular award of contract for broadcasting rights (excluding Pakistan) $4.44 million.

    21. Unauthorised novation of franchise team rights for PSL resulting into financial loss $0.52 million.

    22. Irregular award of contract for Pakistan media rights to M/s Blitz -$8.65 million.

    23. Irregular expenditure on marketing campaign for PSL-II $1.22 million (Rs126.71 million).

    24. Irregular and extra expenditure borne by PCB on branding $194,679 (Rs20.34 million).

    25. Wasteful expenditure on account of 2nd live feed to M/s Sunset+ Vine during PSL-II $15,000.

    26. Loss due to avoidable expenditure on engagement of Anil Mohan without open competition $80,000 (Rs8.36 million).

    27. Irregular award of sponsorship rights without open competition $1.716 million.

    28. Irregular award of contract for catch a crore and YouTube deals to Pepsi $175,000.

    29. Loss to PCB due to non-charging of marketing and advertisement expenses to central pool income Rs160 million.

    30. Irregular award of production services contract and payment of cost overrun $2.9 million.

    31. Non-transparent award of media agency contract to M/s Blitz $1 million.

    32. Irregular expenditure on account of PSL valuation, commercial strategy and concept development without open competition $810,000.

    33. Irregular sponsorship agreement with Pepsi Cola International $250,000.

    34. Mis-procurement at exorbitant rates at logo launching ceremony Rs20.24 million.

    35. Loss to state due to non-deduction of tax on payments to non-resident parties Rs167 million and resident parties Rs9.43 million.

    36. Loss of revenue due to awarding of media advertising (Pakistan region) rights at lower value Rs169.61 million.

    37. Unauthorised expenditure due to hiring of legal consultant without approval from the Law and Justice Division -- Rs34.05 million.

    38. Another unjustified payments to a company $209,881 (Rs21.95 million).

    https://www.thenews.com.pk/print/455...o-psl-editions
    Last edited by MenInG; 13th April 2019 at 13:41.

  2. #2
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    This is a huge thing - wonder if the BoG will discuss this and come out with actions


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  3. #3
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    It was bound to happen.

  4. #4
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    Canít really tell if thereís any truth to this

  5. #5
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    all hail najam sethi

  6. #6
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    Shocking.

    Interesting that most of the media is silent regarding this.



  7. #7
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    10. Unauthorised and unlawful transfer of PSL funds in the third party bank accounts outside Pakistan -Rs145.14 million.

    11. Irregular financial management due to receipts of PCBís revenue in third party US dollar account --Rs166.76 million.

    Excuse me?

  8. #8
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    Quote Originally Posted by Saj View Post
    Shocking.

    Interesting that most of the media is silent regarding this.
    How can they talk about it when most of them were the beneficiary of it...

  9. #9
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    Why were journalists paid TA,DA?

  10. #10
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    Quote Originally Posted by cricketjoshila View Post
    Why were journalists paid TA,DA?
    Usual scratch meri back, and I will scratch yours business


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  11. #11
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    The report is a bit OTT.

    Govt stuff works differently with a lot of red tape, things get delayed all the time and they don't move fast enough.

    PSL was a private matter and needed to move fast, get things done.

    Nobody was willing to pay even that much at that time. It's a miracle franchises decided to invest millions.

    Even now economy is not stable.

    But I do hope we get the true worth of the league at this stage, whatever it is. Do note that people aren't willing to invest.

  12. #12
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    This right here .Keeping it 100


    you really can't beat the game. If you earn anything, it's minus taxes. If you buy anything it's plus taxes.

  13. #13
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    Quote Originally Posted by Hawkeye View Post
    The report is a bit OTT.

    Govt stuff works differently with a lot of red tape, things get delayed all the time and they don't move fast enough.

    PSL was a private matter and needed to move fast, get things done.

    Nobody was willing to pay even that much at that time. It's a miracle franchises decided to invest millions.

    Even now economy is not stable.

    But I do hope we get the true worth of the league at this stage, whatever it is. Do note that people aren't willing to invest.
    Nothing OTT about it.

    Its an auditors report and each of the audit points are black marks on PCB which need to be explained and remedial actions taken.


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  14. #14
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    Quote Originally Posted by MenInG View Post
    Usual scratch meri back, and I will scratch yours business
    Rs 12.64 million scratch. What a khujli!!!!!

  15. #15
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    Is PSL a Govt owned business?

    ANd if its private, then is public or private listed


    "Life is Pain"
    ~House~

  16. #16
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    Quote Originally Posted by MenInG View Post
    Nothing OTT about it.

    Its an auditors report and each of the audit points are black marks on PCB which need to be explained and remedial actions taken.
    Hawkeye is kind of right, for the sake of PSL being able to survive there were some moves that had to be pulled off.

    For example, PCB owned the broadcasting and give the job to someone else as it was the feasible option at that time.

    Now that PSL has survived, we can easily point fingers and look at some loopholes.

    But another thing that needs to be discussed is that why wasnt this audit report made public back then. WHy is that after the govt changes, we see these audit reports coming in.

    PSL needed red tapeism for its own sake at that time. Its survival was crucial.

    Everyone knew about the media and production rights being owned by PCB itself and only asking a third party to do the work.

    THey never sold the rights as of whole, and at the end this was a smart move.

    RIghts are usually sold in terms of 5 years, 7 years, meaning long term.

    Had PCB sold the whole rights at the time, would had been a bad bargain for us by the time of PSL 3 or 4.

    Also, the best decision that PCB made was getting each big news channel to sponsor a team, because of that PSL got alot of coverage around Pakistan.


    "Life is Pain"
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  17. #17
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    Quote Originally Posted by cricketjoshila View Post
    Why were journalists paid TA,DA?
    To ensure they wrote positive things about PSL and did not mention any of the stuff that was not going well.



  18. #18
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    Surely Subhan Ahmed will survive more irregularities and corruption.

  19. #19
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    Some of the irregularities pointed out demonstrate a lack of understanding about the sports business. There are certainly obvious irregularities and corruption but not in every case outlined.

  20. #20
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    Quote Originally Posted by Saj View Post
    To ensure they wrote positive things about PSL and did not mention any of the stuff that was not going well.
    In a way its understandable cause negative coverage woudnt help in getting it back to pakistan, shame that stuff like this is imbedded in every inch of our country tho.

  21. #21
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    Quote Originally Posted by unemployedgm View Post
    Some of the irregularities pointed out demonstrate a lack of understanding about the sports business. There are certainly obvious irregularities and corruption but not in every case outlined.
    I agree but i am surprised that PCB have not put out a rejoinder to answer this - almost like they are hoping it blows away


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  22. #22
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    also people who are now critisizing Najem sethi and co for this, if you want the rules to be followed here, then according to rules, PCB has to follow the PPRA rules that are set by the govt. And in such instance PTV would be required to do the production.

    Now, for the sake of PSL's survival, you guys really think PTV could had pulled of the production?

    Like i said before, at that time AGP didnt raise any issue, right after PSL survives the survival stage of a business, these things come up.

    Most of this is just political revenge, at the end it is us who will perish.


    "Life is Pain"
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  23. #23
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    Quote Originally Posted by MenInG View Post
    I agree but i am surprised that PCB have not put out a rejoinder to answer this - almost like they are hoping it blows away
    This board has disassociated itself with Najam Sethi. Essentially mani is exposing Sethi. But he should be holding everyone's feet to the fire. The day subhsn Ahmed gets fired is the day you'll know PCB is moving in the right direction.

  24. #24
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    Quote Originally Posted by Major View Post
    also people who are now critisizing Najem sethi and co for this, if you want the rules to be followed here, then according to rules, PCB has to follow the PPRA rules that are set by the govt. And in such instance PTV would be required to do the production.

    Now, for the sake of PSL's survival, you guys really think PTV could had pulled of the production?

    Like i said before, at that time AGP didnt raise any issue, right after PSL survives the survival stage of a business, these things come up.

    Most of this is just political revenge, at the end it is us who will perish.
    An audit point is an audit point. Don't bring petty political stuff into it. Auditors cannot sully their reputations like this.


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  25. #25
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    Quote Originally Posted by SensiblePakFan View Post
    In a way its understandable cause negative coverage woudnt help in getting it back to pakistan, shame that stuff like this is imbedded in every inch of our country tho.
    Credibility goes if you are 'writing for backhanders'.

    May as well work for the PCB.



  26. #26
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    On thing that confuses me about the PCB. How many firms do they get their audits done by? I believe they get audited by the accounting firm Fergusson. Why do they then get audited by the Auditor General's office then? If the Auditor General's office is rasing so many audit objections, then shouldn't this be a sully on Ferguson's reputation?

    What kind of report did Ferguson release or give to the PCB? How can Ferguson give a clean Audit Opinion to the PCB but for the Auditor General's office to release a totally different conclusion?

    Lastly, doesn't the PCB have an Internal Auditor? Isn't it his job to fix and address internal control weaknesses?

  27. #27
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    Quote Originally Posted by Savak View Post
    On thing that confuses me about the PCB. How many firms do they get their audits done by? I believe they get audited by the accounting firm Fergusson. Why do they then get audited by the Auditor General's office then? If the Auditor General's office is rasing so many audit objections, then shouldn't this be a sully on Ferguson's reputation?

    What kind of report did Ferguson release or give to the PCB? How can Ferguson give a clean Audit Opinion to the PCB but for the Auditor General's office to release a totally different conclusion?

    Lastly, doesn't the PCB have an Internal Auditor? Isn't it his job to fix and address internal control weaknesses?
    PCB is technically a gov't body. Auditor General has jurisdiction. PCB does have an internal auditor but most corps will from time to time make use of externals just to keep things in check and see if 2+2 is actually equaling 4.

  28. #28
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    Quote Originally Posted by CleverSir View Post
    PCB is technically a gov't body. Auditor General has jurisdiction. PCB does have an internal auditor but most corps will from time to time make use of externals just to keep things in check and see if 2+2 is actually equaling 4.
    Thats what i am saying, firms like Ferguson, E&Y, KMPG are reputed firms. If they have been giving a clean chit to the PCB but the Auditor General comes in and gives a negative report, shouldn't this be considered a dent on the Big 4 firms reputation?

  29. #29
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    Quote Originally Posted by Savak View Post
    Thats what i am saying, firms like Ferguson, E&Y, KMPG are reputed firms. If they have been giving a clean chit to the PCB but the Auditor General comes in and gives a negative report, shouldn't this be considered a dent on the Big 4 firms reputation?
    The thing is, we don't know if they've given a clean chit. I don't believe the audits by third parties were ever published by the PCB (at least as far as I'm aware, this stuff interests me so if I missed it then I apologize). So we have to take them at their word for it, and we all know PCB isn't the most trustworthy corporation when it comes to this stuff. Before anyone says they don't have to, PCB is a public body. We should have access to their records as the taxpaying Pakistani public.

  30. #30
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    Quote Originally Posted by CleverSir View Post
    The thing is, we don't know if they've given a clean chit. I don't believe the audits by third parties were ever published by the PCB (at least as far as I'm aware, this stuff interests me so if I missed it then I apologize). So we have to take them at their word for it, and we all know PCB isn't the most trustworthy corporation when it comes to this stuff. Before anyone says they don't have to, PCB is a public body. We should have access to their records as the taxpaying Pakistani public.
    The auditing firms are bound to double check whether the report that they have issued to the PCB and the report that the PCB is issuing in Public match word by word.

  31. #31
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    Quote Originally Posted by unemployedgm View Post
    This board has disassociated itself with Najam Sethi. Essentially mani is exposing Sethi. But he should be holding everyone's feet to the fire. The day subhsn Ahmed gets fired is the day you'll know PCB is moving in the right direction.


    Not just him, only if leeches and vampires like Wasim Bari, Haroon Rashid, Intikhab Alam, Iqbal Qasim, Moeen Khan, Shakeel Sheikh and other usual recycled and regurgitated merry-go-round corrupts are let go...only then we will begin to see an improvement and upward swing!

  32. #32
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    So from an outsiders perspective, can someone tell me if this means PSL 1 & 2 were crooked?

    Or money was skimmed from the top?

    Or just incompetent/soft corners- I feel this is how corruption is usually let of the hook in Pak, easier for everyone to save face & no real consequences. From Qayum onward.

    Will people be sacked? Stand down?

    CA just had a massive cleanout over cheating... will Pakistan just accept this & carry on as usual?

  33. #33
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    Quote Originally Posted by Monsee View Post
    Not just him, only if leeches and vampires like Wasim Bari, Haroon Rashid, Intikhab Alam, Iqbal Qasim, Moeen Khan, Shakeel Sheikh and other usual recycled and regurgitated merry-go-round corrupts are let go...only then we will begin to see an improvement and upward swing!
    Agree. Subhan is a Big Fish.

  34. #34
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    Corruption is common in sub continent, everyone who loves on these two countries know about it. So no big surprise most people know all this already and won't be surprised. It happens everywhere in sub continent.

  35. #35
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    OK so audit revealed irregularities.

    But Mr Mani...

    What is you plan for fixing domestic cricket, putting Pakistan back on track in internationals, improving facilities all over Pakistan, getting cricket into schools, getting competent people into leading roles in PCB, increase female participation into sport, getting sponsors in club cricket, improving current rock bottom relations with other cricketing bodies?

    Or are you still stuck in your boardroom reading powerpoint slides?

  36. #36
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    This should have been legally prosecuted, not outright here. Corruption happens inside closed doors, but also the investigation should happen inside closed doors only when the judgement is made by judiciary these things can be exposed as a summary not as 20 points. Feel there is a lack of professionalism, and always confidential reports exposed to the media & public.

    Motive behind this looks to me as a defamation and revenge. Proper investigation required and only when accused are brought in front of law this will make sense, or else it is just a report to attract media & public
    Last edited by ask_analyse_act; 17th April 2019 at 12:42.

  37. #37
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    Quote Originally Posted by wrongun View Post
    So from an outsiders perspective, can someone tell me if this means PSL 1 & 2 were crooked?

    Or money was skimmed from the top?

    Or just incompetent/soft corners- I feel this is how corruption is usually let of the hook in Pak, easier for everyone to save face & no real consequences. From Qayum onward.

    Will people be sacked? Stand down?

    CA just had a massive cleanout over cheating... will Pakistan just accept this & carry on as usual?
    I think the latter would happen, not by accepting, but by getting suppressed


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