Chairman refutes spurious charges made at recent Senate hearings

PCB Media Release – October 27, 2004

Spurious charges have recently been made against the PCB at recent Senate hearings at which a resignation letter by the former Treasurer, Mr Muhammad Naeem, was circulated and released to the press. While it is not PCB’s intention to descend to a demeaning exchange of charges, levelled at the behest of vested interests, it is important that the facts be recorded in their correct perspective.

Two general accusations made in the former Treasurer’s letter relate to:

a) The Lahore University of Management Sciences (LUMS) report on PCB restructuring not being implemented and
b) Financial probity and transparency promised by the PCB Chairman not having been implemented, especially in the appointment of consultants and marketing contracts. These general accusations need to be answered first before addressing the detailed charges made by the former Treasurer.

The LUMS Report
The fact that the LUMS report was being implemented was known to the former Treasurer because I had told him that one of its recommendations that affected Mr Naeem personally, was that the post of Treasurer should be salaried and not honorary. Mr Naeem had opposed the LUMS recommendation. The fact that the LUMS report is being implemented is apparent from the advertising for Regional Development Officers and other senior posts recommended in the report with regard to the reorganisation of PCB.

Scrutiny of Contracts

Immediately after I took over, I took a decision to engage an independent Marketing Consultant, Mr Riaz Mahmood to:
a) scrutinise PCB contracts and

b) to negotiate the television and marketing contracts for the India series. The engagement of an independent Marketing Consultant aided by an independent lawyer – was necessary as PCB’s existing contracts – negotiated by the previous Board – had aroused some controversy. The scrutiny began with the major contracts – Ten Sports/ARY for television and Pepsi as major sponsor. These contracts were found to be legally binding. Thereafter, contracts with the clothing manufactures and other agreements were scrutinised. The former Treasurer was a member of the PCB Committee that reviewed these contracts. In fact, after the major contracts had been scrutinised, he came to my office recommending that further scrutiny of the remaining contracts should be stopped as he felt it would be counter productive for the Board to continue the review. I find it incredible that the former Treasurer should charge me with not pursuing the scrutiny of contracts when he himself had recommended a stop to it. His advice was not taken and all contracts, major or minor, are being vetted by an in-house committee.

Transparency & Financial Accountability

As regards the issue of transparency and financial accountability, the former Treasurer has correctly referred to the primary importance I have attached to these objectives. I remain totally committed to them. However, because of the extremely short lead period to the Indian tour (18 days), it was necessary to take executive decisions on an emergency basis, temporarily setting aside established procedures of committee vetting, advertising for contracts/appointments, calling for tenders etc. Moreover, most PCB officers were out in the field on a war footing, ensuring seats in Multan, public lavatories in Peshawar, constructing media boxes in Lahore and ICC level facilities in all the centres. All these decisions were taken on an emergency basis for the duration of the India series as, otherwise, administrative and hospitality arrangements would not have been ready for the tour.

There was, however, one exception to these ad hoc decisions. This related to the contracts for television rights and sponsorship contracts for the series. This high profile task was taken on by the independent consultant Mr. Riaz Mahmood whose outstanding contribution led to an unprecedented income (US$24 Million) for the PCB. More importantly in processing these contracts in a manifestly transparent manner, the PCB has established a reputation for tendering integrity that has become a bench mark for a transparent process of awarding contracts through public tender. Even those who lost out on the tenders have recognized openly that the PCB’s tendering process had been fair and transparent. The former Treasurer was a member of the Tender Committee. Regrettably he has chosen not to recognise Mr Riaz Mahmood’s central role in this achievement and has only referred to Consultants’ emoluments which were based on the market rate fees for top-rated consultants and lawyers.

I stand by my decision to take decisions on an emergency basis during the India series for contracts and appointments and feel vindicated by the success of the tendering process. The unprecedented income achieved by it and by the smooth and successful organisation of the series was universally recognized and led to the award on European Television by a leading international sporting institution (Laureus International) for the best sporting event of the year. Since the conclusion of the series, the relevant committees – marketing, contracts, financial – are active and operative so that all contracts and appointment are made through due transparent process. Moreover, all the decisions taken on an emergency basis during the period of the India series are currently the subject of a special audit being carried out by the PCB’s auditors, M/s Ferguson & Co.

Now, to respond to the former Treasurer’s specific charges that flow mainly from the need to take decisions on an emergency basis described above:

Chairs

i) The contract for chairs was negotiated as an emergency mainly for Multan but also for some sections of the Karachi and Lahore stadiums because it was found that there were no seats installed in Multan and a limited number of seats needed to be installed in Karachi and Lahore. This was necessary as tickets were being sold on the internet for reserved seats in various enclosures. The order for additional chairs was, in fact processed, by the Contracts Committee.

Lunch boxes on the six days of matches in Lahore (2 ODIs, 4 days for 2nd Test)
ii) It was decided to provide lunch boxes for handicapped children accommodated in a special stand. 336 lunch boxes per day were arranged at Rs 145/- per box for six days. On the 2 days of ODI’s at Lahore, the lunch boxes were fully utilized by the children from SOS village and other schools for handicapped children. Moreover, on the first and fourth day of the Lahore Test, there was sufficient attendance for these 336 lunch boxes to be utilized in the special children’s closure. However, for the second and third day of the Lahore Test there was insufficient attendance in the handicapped children’s enclosure and therefore, the unutilised lunch boxes were distributed to children sitting in stalls other than the special enclosure. The charge that the expenditure on lunch boxes was extravagant or wasted is disproved by the facts. The cost of the lunch boxes was by no means exorbitant and was also vetted by the Contract Committee.

Engaging Consultants
iii) As stated earlier, the reasons for engaging an independent Marketing Consultant and a lawyer without going through “due process” were that there was no lead time before the India series began, to advertise, select and appoint personnel. Moreover, Marketing Manager, Mr Zahid Bashir’s services had been dispensed with and it was necessary to urgently scrutinise the contracts that had a bearing on the India series. Incidentally, the Marketing Consultant and PR/Media Advisors posts have since been advertised and the selection will be made by a high level committee.

Control Room
iv) I appointed a 4-member team to man the Control room at Headquarters. This was necessary because of the vast number of enquiries that were being received by PCB regarding security, handling of VIPs, media, ticketing etc. As most of PCB officers were away from headquarters, ensuring arrangements in the field, the Control Room officials comprising senior officers experienced in their respective fields were required to stay at Headquarters and handle all enquiries and problems. Their appointment lasted only for the duration of the India tour and was a notable success. Such Control Rooms are frequently appointed by Government and corporate bodies to meet urgent matters to be handled on an emergency footing. The four officials were paid normal daily allowances.

Sale of Tickets
v) A separate press release regarding ticket sales has been issued. The important fact to be recognised is that of all the marketing contracts advertised for the India series, ticketing was the only one in which there was no tender offer at all. The PCB was therefore, faced with the option of deciding whether to award the ticketing contract through the traditional system of banks or whether to negotiate the sale with the only company – Wisden Cricinfo – that was prepared to issue computerised, bar-coded tickets that would also be available on the internet. Either way, there was no time to re-advertise the ticket sales tender. After careful deliberation and recognising that the traditional system of ticketing had led to black-marketing, corruption and forgery in the past, it was decided to opt for Wisden Cricinfo as they had wide experience in organising ticket sales for cricket matches in Australia, West Indies etc. Moreover, their ticket sales would be available on the internet, bringing in foreign exchange income for the first time allowing overseas purchasers to buy tickets for the high profile series and eliminating forgery/black-marketing of tickets. Mr Naeem was present at the meeting at which it was decided to opt for bar-coded computerised tickets.
There were some teething problems in the sale of these tickets because of the shortage of time but forgeries were easily detected and, for the first time in PCB annals spectators, found seats in their enclosures. It is absolutely false to state that the CEO distributed tickets to friends and relatives.

Allied Bank
vi) The allegation regarding Allied Bank’s refusal to transfer funds is totally baseless. The factual position is that there have been procedural delays vis-à-vis clarifications being sought from our auditors regarding placement of funds abroad. Promotions
vii) Regarding charges levelled by former Treasurer in connection with the promotion of three persons, it is clarified that these promotions have been made according to the procedures being followed in the PCB. These promotions were long overdue and were made on merit.

Bonus for staff
viii) The high pressure series v India was a challenge for the PCB staff who worked day and night to make it a success from organisational point of view irrespective of win or defeat in the series. In appreciation of the exceptional workload absorbed by the staff, the Chairman awarded the bonuses and increments. PCB staff has previously been awarded such bonuses and increments.

Other minor issues
xi) All issues relating to mobile booths, chairs, lunch boxes and sale of tickets are being audited. The mobile ticketing booth proved to be extremely useful particularly for Test matches in Multan and Rawalpindi. These booths would be available for future use in ODI’s and Test Matches and have been used effectively for the current triangular series.

It is gratifying to note that despite the shortage of time the arrangements and hospitality for the series were successfully completed. The following landmarks are relevant:

(a) Unprecedented income (US$24 Million) was received from sponsoring contracts.

(b) Gate money receipts of Rs 7.5 crore were higher by 5 times previous best gate receipts (1.5 crores) during the World Cup.

(c) First-ever bar-coded tickets prevented over-crowding in stands through forgeries. First-ever internet sale of tickets led to foreign exchange income.

(d) High appreciation for hospitality and arrangements culminating in televised international prize for PCB organizing the best sporting event of the year.

(e) All-round recognition for instituting a market tendering process that was regarded as transparent and fair. Finally, I had considered the former Treasurer to be a competent and honourable officer and will not engage in a demeaning exchange of charges.

All I can state now is that people living in glass houses should not throw stones. The PCB admits to making miscalculations and errors due to the shortage of time and enormous pressures built up for the India series. I am confident, however, that there was no corruption, nepotism or misappropriation by PCB officials. For the former Treasurer to join vested interests in betraying the institution that he served speaks for itself.

Shaharyar M. Khan
Chairman PCB