[Report] Over Rs14 bn irregularities, non-transparent contracts unearthed in PSL accounts

[MenInG]

ISLAMABAD: Top auditors have detected non-transparent contracts, losses, and serious irregularities totaling Rs14 billion in the accounts of the Pakistan Super League (PSL).

Official documents obtained by the Hum Investigation Team (HIT) reveal that the Pakistan Cricket Board (PCB) secured a non-transparent contract worth Rs1.4 billion for the sale of TV broadcasting rights.

The PCB suffered losses due to an irregular advance payment of Rs908 million to vendors for services, attributed to the absence of framed financial rules, according to a report by the Auditor General of Pakistan (AGP).

The non-authorization of one of the joint bidders for TV broadcast rights for PSL 7-8, amounting to Rs4.3 billion, and an irregular renewal of the percentage share of franchisees for the central pool of income led to a loss of Rs1.6 billion, according to the audit report.

Auditors noted that the PCB failed to provide records of these transactions and agreements, nor did they inquire into the recommendations given by the auditors. Despite multiple reminders, the PCB management did not furnish the promised details to HIT.

According to the audit, the PCB board awarded a non-transparent contract of Rs1.4 billion for the sale of TV broadcasting rights, violating clause 3(3) of PCB Constitution SRO 43(KE)/2014, emphasizing transparent operations. Agreements with M/S Techfront and M/s Blitz for the sale of Global and Local TV broadcasting rights resulted in a non-recovery of Global Live Streaming amounting to Rs194.741 million.

A special audit further revealed a non-transparent contract worth Rs338 million with M/S Transgroup FZE for the sale of Instadia sponsorship rights. Another non-transparent contract of Rs181 million was awarded for the sale of live streaming rights.

The PCB management entered into non-transparent agreements with M/S Khaleef and Transgroup FZE for the sale of graphic interchange rights and truck branding rights, amounting to Rs46 million and Rs15 million, respectively. An agreement with M/s Transgroup FZE/ITW Consulting FZE for the sale of Instadia sponsorship rights (gold, silver, umpire) amounting to US$ 7.805 million resulted in a payment of Rs147 million due to an unjustified provision for doubtful debts.

The PCB management also failed to recover outstanding dues worth Rs133 million from M/s Khaleef Technologies Incorporated. The audit team revealed that the PCB put PSL revenue at risk due to non-receipt of bank security from franchises, granting franchise rights of PSL teams to various franchises for PSL-V for an amount of Rs3.2 billion.

Auditors found non-authorization of one of the joint bidders for TV broadcast rights for PSL 7-8, amounting to Rs4.3 billion. An irregular broadcasting contract was awarded to an FM radio against whom outstanding dues of Rs14.274 million remained unrecovered.

A case of non-recovery of Global TV Broadcast fee worth Rs1 billion was also pointed out by auditors. The PCB management decided to roll over Rs758,745,086 in Habib Metropolitan Bank Limited for one year, resulting in an unauthorized absorption of incremental costs, causing a loss to PCB amounting to Rs723 million.

The PCB absorbed incremental costs related to the travel and accommodation of foreign players, match fees, daily allowances, and additional production costs, aggregating to Rs178 million and USD 2.4 million (equivalent to Rs545 million at the exchange rate of Rs225) for the remaining 20 matches of PSL 6 played in UAE. The audit observed that these charges were to be charged from the franchises but were booked to PCB.

Auditors also revealed an irregular renewal of the percentage share of franchisees for the central pool of income, where the PCB management incurred a loss of Rs1.6 billion. The non-transparent award of the contract was given by PCB for the sale of live streaming rights of US$ 3 million.

The PCB entered into an agreement with Blitz Advertising Pvt Ltd for the sale of television broadcast rights and live streaming rights amounting to US$ 3 million. The PCB did not deduct income tax on the payment of prize money amounting to Rs32 million. The PCB management paid prize money of Rs213 million to the match winners, players, etc., during PSL-5 (4 matches) and PSL-VI.

The PCB management in Lahore charged an expenditure of Rs147 million as doubtful debts in the profit and loss statement of PSL-6 during the financial year 2020-21, as per the auditors.

Humtv

 

[Cricket Warrior]

Now I am curious to know the big names involved in it because this can't happen at a lower level.

 

[RidiculousMan]

Who will hold the responsible "accountable"?

 

[Major]

Lol, Hum investigation Team?
Basically, this is Hum channel.

AGP office is there that does the audit, and if they feel there are any irregularities they will come hard on any govt institute.

PCB is not answerable to some media channels made up investigation team.

It looks like Hum news wants to compete with Ary where they tried to investigate the Saya thing.....

Even if this report was by some private auditor i would had believed it because auditors know what they are doing and can catch the trails left behind, but Hum investigation team?

A self proclaimed private investigator?

 

[Bewal Express]

We hear these reports every other year but none of this goes anywhere. But this will be an issue and FIA will Start arresting people if IK or RR are involved. We just need a transparent investigation but that never happens

 

[charlie007]

Lol, Hum investigation Team?
Basically, this is Hum channel.

AGP office is there that does the audit, and if they feel there are any irregularities they will come hard on any govt institute.

PCB is not answerable to some media channels made up investigation team.

It looks like Hum news wants to compete with Ary where they tried to investigate the Saya thing.....

Even if this report was by some private auditor i would had believed it because auditors know what they are doing and can catch the trails left behind, but Hum investigation team?

A self proclaimed private investigator?

The HIT is only bringing the facts forward. Why are you killing the messenger here?
Question should be asked if there us any truth in these findings. In any corrupt country, these allegations of impropriety must be investigated.
Most of these corruption cases are only brought out by the media, whether it is Azharuddin or Cronje or Salman Butt, Amir etc.

 

[MenInG]

Lol, Hum investigation Team?
Basically, this is Hum channel.

AGP office is there that does the audit, and if they feel there are any irregularities they will come hard on any govt institute.

PCB is not answerable to some media channels made up investigation team.

It looks like Hum news wants to compete with Ary where they tried to investigate the Saya thing.....

Even if this report was by some private auditor i would had believed it because auditors know what they are doing and can catch the trails left behind, but Hum investigation team?

A self proclaimed private investigator?

These are allegations which need to be answered or Hum taken to court.

 

[Major]

These are allegations which need to be answered or Hum taken to court.

Nope, they dont have to be answered.

Unless someone in senate questions the pcb and than AGPR is requested to present the data, pcb can ignore this.

Its just a news channel making claims and not some proper auditor presenting facts

 

[BouncerGuy]

Lots of controversies are being pulled in by the PCB. They should be rejecting these accusations in case these are just baseless accusations or else the PCB should be audited by some well know firm.

 

[MenInG]

Nope, they dont have to be answered.

Unless someone in senate questions the pcb and than AGPR is requested to present the data, pcb can ignore this.

Its just a news channel making claims and not some proper auditor presenting facts

Says who?

Of course they need to be answered.

These are big allegations.

Not for you Or me to decide if they should be answered or not.

 

[shortbread]

Another issue that's tailor made for the nations second favourite time pass after cricket, ie. committees.

What's most likely to happen is that the PCB will form a committee to look into these allegations and investigate further. Before this a committee needs to come together to decide who will sit in the before mentioned committee. An excellent suggestion would be for Salman Butt to head both committees.

 

[Major]

Says who?

Of course they need to be answered.

These are big allegations.

Not for you Or me to decide if they should be answered or not.

because Hum news are no one basically.

For an accounts audit, whose opinion or analysis would matter? An auditors opinion or some lowkey news channels?

Even if it was investigative journalism by Dawn, that would had held more weightage because than we know atleast a proper analysis and report was made.

 

[MenInG]

because Hum news are no one basically.

For an accounts audit, whose opinion or analysis would matter? An auditors opinion or some lowkey news channels?

Even if it was investigative journalism by Dawn, that would had held more weightage because than we know atleast a proper analysis and report was made.

It's a news channel, they will put out reports, this is what it says Report in title.

If you have an opinion on the numbers, add them.

 

[DeadlyVenom]

Who are the "top auditors"?

 

[FearlessRoar]

PCB clarifies on audit report

An impression is being created in electronic and print media that a certain audit report containing some audit objections concerning the current Management Committee has been issued by the Auditor General of Pakistan.

It is pertinent to mention here that the audit report in question pertains to the period from 2019-2022 and is not related to the present Management Committee. The findings presented in this initial audit report are preliminary observations. In response to these observations, the relevant officials of the PCB have already provided clarifications along with documentary evidence as part of their institutional responsibilities.

The feedback from the Auditor General of Pakistan is still pending. As and when any progress is made regarding these audits containing some observations, the PCB officials will respond accordingly.

Source: PCB

 

[MenInG]

PCB clarifies on audit report

An impression is being created in electronic and print media that a certain audit report containing some audit objections concerning the current Management Committee has been issued by the Auditor General of Pakistan.

It is pertinent to mention here that the audit report in question pertains to the period from 2019-2022 and is not related to the present Management Committee. The findings presented in this initial audit report are preliminary observations. In response to these observations, the relevant officials of the PCB have already provided clarifications along with documentary evidence as part of their institutional responsibilities.

The feedback from the Auditor General of Pakistan is still pending. As and when any progress is made regarding these audits containing some observations, the PCB officials will respond accordingly.

So clearly PCB see something in it to respond to.

 

[BouncerGuy]

PCB suffers losses from PSL due to bigger share in central pool for franchises

The audit report details that have surfaced in the Pakistani media indicate that the PCB went out of its way to give the impression that all was well with the PSL as a financial brand.

An audit report by the Pakistan Auditor General’s office has shown the PCB has been suffering revenue losses in millions of rupees from its Pakistan Super League (PSL) due to the financial sharing model with the six franchises and other anomalies.

The audit report details that have surfaced in the Pakistani media indicate that the PCB went out of its way to give the impression that all was well with the PSL as a financial brand.

The AG’s report has expressed its concerns over the financial model and matters of the PSL and also recommended a thorough investigation into these matters.

The audit report states that contrary to the general impression that the board has been taking losses from the PSL after it tinkered with the financial model of the league.

The losses have come about because of the changed profit-sharing arrangement related to the central pool of revenue generated by the PSL.

The audit report notes that the PCB incurred a substantial loss of 1,637,977 million rupees due to an increase in the share of PSL franchises in the central pool.

The interesting part is that under a 10-year agreement signed between the PCB and the franchises, any amendments could only have been made after completion of 10 years in 2025.

The AG’s report notes that the PCB suffered losses starting from the fifth edition of the league, where franchises share in media rights were increased to 80 percent, leaving just 20 percent for the board.

Similarly, sponsorship rights were divided, with 40 percent going to franchises and 60 percent to the board, and even in the sale of ticket sales, 90 percent went to franchises and only 10 percent went to the PCB.

The AG’s report points out that this resulted in the PCB missing out on potential revenue of 810 million rupees.

This financial setback increased to 827 million rupees in the sixth edition of the PSL, and the audit report forecasts a substantial potential loss of 10,751 million rupees for the board from the seventh to the 12th edition of the profit-sharing formula, which is tilted in favour of the franchises.

The board, according to the report, also faced revenue losses in the sixth and seventh editions of the PSL held during the Covid pandemic period in which travelling, accommodation, match fees, medical and other costs increased to 178 million rupees.

The PCB also had to dish out extra production expenses amounting to 2.423 million dollars (545.175 million rupees at the rate of 225 rupees per dollar).

The audit points out that, according to the contract, this amount was supposed to be paid by the franchises, but the board ended up covering the costs, prompting the need for further investigation.

The AG report also points out that the board has from time to time failed to secure the required bank guarantees from the franchises and yet allowing them to participate in the league.

The reports discloses that in the 5th edition, the board didn’t secure the required bank guarantees, putting 3,293 million rupees of PSL income at risk.

The AG’s report also points problems in the board receiving franchises fees amounting to 2,170,476,000 rupees and other expenses of 1,122,764,806 rupees leading to a total sum of up to 3,293,240,806 rupees, which was not protected with the acquisition of bank guarantees.

The AG report also points out that the PCB didn’t deduct income tax from the prize money awarded to match-winner players in the fifth and sixth editions, which led to losses to the national treasury.
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SOURCE: SPORTSTAR