The Auditor General of Pakistan (AGP) has expressed serious reservations about the Government Holding Private Limited (GHPL) investing Rs89.550 billion in US dollars in the Reko Diq project of Balochistan without ensuring the availability of funds and the necessary foreign currency. The GHPL acquired an 8.33% equity stake in the Reko Diq project on the federal government’s instructions.
The Reko Diq project is 50% owned by Barrick, 25% by three state-owned enterprises (GHPL, OGDCL, and PPL), and 15% by the provincial government of Balochistan on a fully-funded basis and 10% on a free-carried basis.
The audit report stated that the GHPL invested in the Reko Diq project without conducting proper due diligence and without adequately assessing the cash flow position. The management of GHPL responded to the audit by stating that the company’s business was not exposed to any liquidity risk and that it had a healthy cash flow position as of June 30, 2023.
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Additionally, the finance, procurement, and risk management committee of the GHPL board reported that the estimated sales volume for the fiscal year 2022-23 would decrease due to the natural decline of major fields.
