Former PIA chief and other senior officials arrested

Shahnawaz Rehman, a former managing director of PIA – Pakistan International Airlines (PK, Islamabad Quaid-e-Azam Int’l), and Muhammad Amir Memon, once a spokesman and brand manager at the airline, have been arrested for alleged abuse of authority, Pakistan’s Baaghi TV reported on September 28.

Unnamed sources told the broadcaster that the corporate crimes unit of the Federal Investigation Authority (FIA) had arrested the two men in Karachi over their alleged involvement in financial irregularities at the indebted flag carrier.

The sources claimed that Rashid Aziz, a 33-year veteran at PIA who worked his way up from reservations officer in 1988 to director of marketing in 2014-16, had also been detained. The arrests were made after a detailed corruption investigation related to a procurement deal, according to the sources.

The airline reportedly lost PKR99.02 million rupees (USD579,000) through the acquisition of Apple iPads that could be rented by business-class passengers as part of the inflight entertainment programme. A tender for the iPad Air 64GB devices, or equivalent tablets, was released in 2014 as part of a PKR5 billion (USD29.3 million) upgrade to this part of the cabin, which also included new seating.

According to prosecutors, the detained officials and the airline’s Central Purchase Committee had violated regulation four of the Public Procurement Regulatory Authority (PPRA) rules published in 2004. Entitled “principles of procurements”, the regulation says simply: “Procuring agencies, while engaging in procurements, shall ensure that procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency, and the procurement process is efficient and economical.”

The investigation had found that the accused officers had allegedly abused their positions by illegally approving financial proposals for 350 of the iPads.

Rehman joined the ranks of the state-owned flag carrier in October 1999 as general manager for fleet planning, taking on a succession of senior roles before becoming managing director in July 2014, a post he held until August 2015, since which he has been self-employed. Memon was spokesman in 2015 and brand manager from October 2015 to December 2016.

PIA was not immediately available for comment.