LAHORE - PIA has replaced a corruption-accused Chief Executive Officer (CEO) with another officer who too is facing a corruption inquiry, airline sources have claimed.

Nayyar Hayat, who is allegedly involved in heavy embezzlement of funds, has been given the additional charge of CEO after removal of Bernd Hildenbrand – who is being investigated by FIA on corruption charges.

As per the announcement, Chief Operating Officer Hildenbrand was relieved from the assignment of Acting CEO and Nayyar has been given this slot till further orders.

Well-placed sources in national carrier said that Nayyar Hayat is accused of misuse of Rs3 billion from Provident Fund and he was therefore removed from the office of Chief Financial Officer (CFO) last year on the recommendation of PIA Board of Directors.

Interestingly, after his removal as CFO, he was posted as director of Hotel Airport - which is a property of PIA.

The BoD had taken the action against Nayyar after Securities and Exchange Commission of Pakistan (SECP) issued a warning to the PIA BoD over the funds embezzlement issue.

An inquiry into this effect is still underway, a senior PIA officer said, seeking anonymity. He said that due to the embezzlement in provident fund, pensioners and retired airline officers had to face problems in getting pensions.

Also, the said office was posted CFO despite the fact that this post could only be filled by a charted accountant (CA), a qualification that he did not have, a PIA officer said.

Sources said that another loss caused by Nayyar to the airline was increment in salaries of pilots beyond the recommendations of the BoD. These increments put an extra burden of Rs6 to 8 billion on PIA since the airline management had to award the same increments to engineers also.

As for Bernd Hildenbrand, the highly-paid outgoing CEO is a mega corruption probe by the Federal Investigation Agency (FIA). The authorities have also barred the German national from leaving the country till completion of the probe.

The federal investigators are probing into a case wherein PIA top officials leased an aircraft from Sri Lankan airline on almost double rates than a private airline of the country. PIA leased an aircraft A-330 from Sri Lankan airline at $8500 per hour whereas the same type of aircraft was got on lease by a private airline on $4500 per hour.

Couple of weeks back FIA Punjab had sought permission from its headquarters to interrogate some senior PIA officers allegedly involved in corruption. In response to that, the FIA DG granted permission.

The FIA is probing the wet lease of an aircraft A-330 on exorbitant rates. The above said inquiry was started on special directions of Interior Minister Ch Nisar Ali Khan.

PIA spokesman Danyal Gillani said that there was no inquiry underway against newly appointed Acting CEO in connection with embezzlement of Provident Funds.

To a question about the CA mandatory qualification for the post of CFO he said that it was not mandatory and Mr Nayyar was serving as CFO since long. About increments of pilot salaries, he said that it was given with the approval of BoD and Nayyar was not CFO at that time.