Agreed that PMLN has a very experienced team, but I wonder why they have to make use of manipulated figures for getting IMF tranches. I am sure the government will take refuge behind ‘typo’ again.
Manipulating figures: Discrepancies worth billions creep up in SBP accounts – The Express Tribune
Re: Manipulation in figures quoted for State bank’s profit
I just read this article and was about to open a thread for this. Its unbelievable. Thats wut happens when you have incompetent people at key positions of sensitive institutions.
Manipulating figures: Discrepancies worth billions creep up in SBP accounts
By Shahbaz Rana
Published: September 6, 2014
**ISLAMABAD: **Discrepancies worth billions of rupees have surfaced in the accounts of the State Bank of Pakistan (SBP), suggesting a deliberate attempt to understate the budget deficit for the previous fiscal year.
In what is seemingly an act of ingenious accounting, the government has booked SBP’s outstanding profit for the last two fiscal years of the Pakistan Peoples Party-led government’s tenure (FY2011-2012 and FY2012-2013) in the central bank’s profit for 2013-14.
http://i1.tribune.com.pk/wp-content/uploads/2014/09/326b.jpg
The Rs76 billion profit SBP claims has been generated from outstanding net income for 2011-2012 and 2012-2013, is not backed by the audited statement of the State Bank’s profit and loss account, which is signed by two of Pakistan’s leading chartered accountancy firms.
In an official bulletin, the finance ministry claimed SBP had posted Rs326 billion in profits for 2013-14 – an unprecedented figure which raised eyebrows in several quarters. The profit helped the government achieve the budget deficit target set by the International Monetary Fund (IMF).
In response to a written query by The Express Tribune, SBP said that out of the Rs326 billion, Rs219 billion was the net profit for 2013-14 and Rs31 billion was earned from the sale of United Bank Limited shares.
The remaining Rs76 billion was claimed by SBP as ‘balance surplus profit for FY2012-13 paid to the federal government during FY2013-14’.
There was a glaring mismatch, however, when SBP’s claims were checked against the bank’s audited profit and loss statement, signed by accountancy firms KPMG Taseer Hadi & Co and A F Ferguson & Co.
According to the audited accounts, SBP’s profit for 2012-13 stood at Rs233.8 billion. The bank transferred Rs220 billion to the federal government in 2012-13, leaving behind a net outstanding profit of only Rs13.8 billion.
When contacted again, SBP contradicted its earlier reply saying Rs62.7 billion was added to the overall profit figure for 2013-14 as ‘balance surplus profit for 2011-12’.
However, the new reply was still off by around Rs6 billion with the audited profit and loss account statement. SBP earned Rs260.8 billion in profit in 2011-2012, of which Rs204 billion were transferred to the federal government, according to finance ministry documents. This left behind Rs56.8 billion in net outstanding profit.
Questions have also been raised over the Rs219 billion net profit for 2013-14 as budget borrowings – which are the main source of SBP’s profits – decreased several times in the same year.
In 2012-13, when SBP posted a profit of Rs233.8 billion, budget borrowings stood at Rs1.446 trillion. Borrowings decreased drastically in 2013-14, coming down to Rs302 billion. SBP’s profits in comparison only showed a slight decrease, standing at Rs219 billion as per the bank’s claim.
Exchange gains, commission income and dividend income are other sources of SBP’s profits, but their combined contribution has never exceeded more than one-fifth of the total income, according to SBP documents.
These revelations deal a severe blow to the Pakistan Muslim League-Nawaz government’s claim of achieving fiscal discipline in its first year and appear to be a deliberate bid to understate the budget deficit figures for FY2013-14.
“It is very strange that profits of previous years are being shown as profit for 2013-14,” said Dr Ashfaque Hassan Khan, former director general of the finance ministry’s Debt Management Office. He said it seemed the government had asked SBP to come up with resources to fill the gap.
Independent economists have also criticised the government for not adjusting previous years’ profits against those years’ expenditures.
The questions were sent to finance ministry spokesman Rana Assad Amin, but he did not reply till the filing of this report.
Published in The Express Tribune, September 6[SUP]th[/SUP], 2014.
Re: Manipulation in figures quoted for State bank’s profit
You mean genius like these!
Re: Manipulation in figures quoted for State bank's profit
PMLN has been caught pants down on a few occasions during the past few months, first lying about the growth rate and now this. And then they have the gall to propagate that they are improving the economy of the country. No wonder in the previous golden tenure the country was going towards bankruptcy.
Re: Manipulation in figures quoted for State bank’s profit
Govt says 3.3% GDP growth given to IMF was a typo
#TypoSharif
Re: Manipulation in figures quoted for State bank's profit
I just read this article and was about to open a thread for this. Its unbelievable. Thats wut happens when you have incompetent people at key positions of sensitive institutions.
Who said this was incompetence? This is willful and intentional manipulation of numbers, and Ishaq money-launderer Dar is well known for this. A lot of people have been yelling about how Imran and TUQ would have been thrown in jail, had they been in a western country. Well....If this was a western country, Ishaq Dar would have been serving a life sentence since the early 90s for financial crimes, alongwith his cell mates, the Sharifs
Re: Manipulation in figures quoted for State bank's profit
Who said this was incompetence? This is willful and intentional manipulation of numbers, and Ishaq money-launderer Dar is well known for this. A lot of people have been yelling about how Imran and TUQ would have been thrown in jail, had they been in a western country. Well....If this was a western country, Ishaq Dar would have been serving a life sentence since the early 90s for financial crimes, alongwith his cell mates, the Sharifs
You mean it has nothing to do with SBP governor or its executives? And btw when I said imcompetent people at sensitive institutes it does include finance ministry as well.
Re: Manipulation in figures quoted for State bank's profit
So let me get this straight. The IMF never realized this. When the IMF went over the programme, the figures all the data nobody from the IMF team, their back stops in HQ and their econometric guys (a team of a good 30 people) who are the creme de la creme of world economics missed all of this but some guy from the Express Tribune figured it out?
Mashallah. That is just brilliant. We have the next Maynard Keynes in Pakistan.
Re: Manipulation in figures quoted for State bank's profit
So let me get this straight. The IMF never realized this. When the IMF went over the programme, the figures all the data nobody from the IMF team, their back stops in HQ and their econometric guys (a team of a good 30 people) who are the creme de la creme of world economics missed all of this but some guy from the Express Tribune figured it out?
Mashallah. That is just brilliant. We have the next Maynard Keynes in Pakistan.
Firstly, are you implying that IMF reps are better than any number crunchers in Pakistan, just because they are from the IMF, or are goras?
Secondly, think back to 1999. Pakistan was fined for number fudging, discovered by IMF almost a year after the fact. So yes, IMF can miss the boat at times, both intentionally, and unintentionally. IMF has political motives working in the backdrop as well.
Re: Manipulation in figures quoted for State bank's profit
Firstly, are you implying that IMF reps are better than any number crunchers in Pakistan, just because they are from the IMF, or are goras? Secondly, think back to 1999. Pakistan was fined for number fudging, discovered by IMF almost a year after the fact. So yes, IMF can miss the boat at times, both intentionally, and unintentionally. IMF has political motives working in the backdrop as well.
Are they better? Yup. Because they are from the IMF? Yup. Because they are Goras? Nope.
Really please back that 1999 claim up. The IMF can not fine anybody according to their charter.
Re: Manipulation in figures quoted for State bank’s profit
Heres an article by the then senior advisor to IMF Exec Director for South Asia, Dr. Meekal Aziz
Yes, Dr Ashfaque, the data are fudged - thenews.com.pk
Dr Ashfaque asks me to do a bit of reading before making generalised statements. I suggest he do the same. He should go to the IMF website and read the staff report on the subject of fake data that Pakistan presented to the IMF. As a senior adviser to the executive director in the IMF at that time, I have never been so embarrassed for my country.
At the executive board meeting on the subject, the minutes of which are unfortunately confidential but are available with me if Dr Ashfaque would like to do some more reading, all I could do was hang my head in shame as each executive director, all 23 of them (excluding our chair which presented a weak defence written by me), castigated Pakistan in the strongest possible terms for taking money from the IMF based on cooked up data.
The IMF staff which had led missions to Pakistan during the fudging period, the smart professionals who are the best in their field and can never be duped according to Dr Ashfaque, were especially shamed because they had been taken for a ride and were shown to be clueless. A burning issue dominated the meeting. Did the IMF staff know what was going on? If they did, they misled the IMF executive board, were complicit in the fudging, and should be dismissed. If they did not, they should be dismissed for incompetence.
At the end of a highly-charged five-hour meeting, it was the decision of the executive board to fine Pakistan millions of dollars and ask the money back they had taken from the IMF during the fudging period. This is a matter of record which I suggest Dr Ashfaque look up before lecturing me on how good our economic data is. One further point. This fudging went on during an IMF programme when scrutiny of data is at its most rigorous. Imagine the fun the previous government had when there was no IMF programme!
Re: Manipulation in figures quoted for State bank's profit
Can you provide me a link to the actual fine and not the opinion of a man in an editorial?
Re: Manipulation in figures quoted for State bank’s profit
Yup you are right. Found it on the IMF webpage.
Re: Manipulation in figures quoted for State bank’s profit
Re: Manipulation in figures quoted for State bank's profit
Can you provide me a link to the actual fine and not the opinion of a man in an editorial?
You found the link, plus, it wasnt just an opinion of a man in an editorial. The guy was the senior advisor to the Executive director of IMF, South Asia at the time, and was present at all meetings... so its straight from the horses mouth....
Re: Manipulation in figures quoted for State bank's profit
You found the link, plus, it wasnt just an opinion of a man in an editorial. The guy was the senior advisor to the Executive director of IMF, South Asia at the time, and was present at all meetings... so its straight from the horses mouth....
Yeah and I don't believe the horses mouth on a Pakistani website since 90% of the journalists and editorials support a political point of view. The comments of an organization in an official press release hold value. Editorials do not.
Re: Manipulation in figures quoted for State bank’s profit
following the leader, isn’t he?
Re: Manipulation in figures quoted for State bank’s profit
hum dua likhtey rahey, wo dagha parhtay rahey
eik nuqtay nai hameen mehram sai mujrim bana deya
Re: Manipulation in figures quoted for State bank’s profit
:lajawab:
Re: Manipulation in figures quoted for State bank's profit
hum dua likhtey rahey, wo dagha parhtay rahey eik nuqtay nai hameen mehram sai mujrim bana deya
parhnay walay ki aankh mai motiaa thaa? :D