PIA’s CFO Gets Demoted Following Financial Dept’s Complaint to BoD

The National Flag Carrier, Pakistan International Airlines (PIA), is once again facing a management crisis. The airline’s finance department revolted against the Chief Executive Officer (CEO) and submitted a written complaint to PIA’s board of directors (BOD). In response, the management of the airline transferred Nayyar Hayat from the post of Chief Financial Officer (CFO) to a lower post.

Documents obtained by ProPakistani clearly show the signatures of almost the entire senior management of PIA’s Finance Department on the complaint. The written complaint was sent to BOD on the airline’s official letterhead.

It was signed by CFO Nayyar Hayat, GM Accounting Haseeb Iqbal, GM Budget Asad Abbas, GM Revenue Faisal Raza, DGM Funds Asif Zia, DGM Accounting Tanveer Ahmed, DGM Kashif Bin Munir, Manager Funds Management Dept Shafqat Ali Bukhari, Manager Budget Muhammad Saleem, AM Pax Revenue Agha H. Abid, AM Pax Revenue Munir Shehzad, AM Funds Management Sohaib Haneef, AM Pax Revenue Waqas Pasha.

On the 3 page long complaint, the finance department expressed its discomfort about the airline’s deteriorating financial conditions. It claimed that the operational performance has been deteriorating day by day, resultantly increasing the cash flow deficit.

To clarify the depleting finances of the airline, the finance department blamed the CEO for not giving due consideration to the financial statements presented in the meetings.

The management is focused on the operational results which are regularly shared with the CEO every month on time and not even a single meeting has been held to deliberate the financial performance against the current management. The CEO’s conduct with the finance team has been unprofessional, according to the complaint.

The letter said,

Professional feedback of finance department is out-rightly rejected and considered biased. All key members of the finance department are humiliated in coercive manner in front of every one in daily morning briefing.

It further stated that during 2018, the airline had a substantial cash requirement of Rs. 111 billion. Just the monthly requirement was Rs. 9.25 billion, based on average monthly expenditures. The finance department obtained Rs. 91.13 billion as fresh loans from September 2017 till July 2018. This loan includes $115 million for the overhaul of a Boeing 777’s engine, which will be disbursed during August this year.

In this letter, the finance department had the following complaints.

• Payment of Markhor was declined by Finance Department, due to observations of noncompliance of regulatory and procedural requirements.
• Payments to legal councils on which comments were made by CFO, the finance department was forced to make the payment on a weekend.
• Current management deliberately weakening the finance department, as more than eight finance officers who were professionally qualified accountants and were recently trained on the ERP system have been transferred to other departments.
• More than 11 key foreign stations are not adequately manned, causing delays in reporting and impacting local regulatory requirements. The matter has been held up by the CEO since Jan 2018.
• The management was not able to provide proper data for the audit.

After the letter was submitted, PIA’s management transferred CFO Nayyar Hayat and appointed as Chief Special Projects. After the transfer, he has become powerless and has no control over the finances of the airline.

“He shall facilitate and oversee PIA’s compliance with Supreme Court’s orders regarding the special audit of PIA for the period 2008 to 2017.” the order said.