The Federal Investigation Agency (FIA) has registered a case against the chief executive and five directors of two industrial companies, along with four former chief executives of the Faisalabad Electric Supply Company (FESCO), over an alleged Rs12 billion electricity fraud that reportedly caused significant losses to the national exchequer.

The FIA has arrested two former FESCO chief executives, Khurshid Alam and Ahmad Saeed Khan, as well as a company director who was taken into custody at Lahore Airport. A local court granted the agency five-day physical remand of the arrested suspects for further investigation.

The remaining accused have been placed on the Exit Control List (ECL) to prevent them from leaving the country while the investigation continues.

The case has been registered by the FIA’s Composite Circle Faisalabad under the Prevention of Corruption Act and multiple sections of the Pakistan Penal Code, including criminal breach of trust, cheating, forgery, and criminal conspiracy.

According to the investigation, the accused allegedly colluded between 2007 and 2015 to manipulate electricity purchase and sale agreements, enabling the companies to obtain unlawful financial gains at the expense of the public treasury.

The FIA alleged that one company sold electricity to FESCO at rates higher than those approved by the Central Power Purchasing Agency (CPPA) while simultaneously purchasing electricity from FESCO as a bulk consumer at subsidized tariffs.

Investigators also alleged that another company secured subsidized natural gas from Sui Northern Gas Pipelines Limited (SNGPL) by claiming to operate as a captive power plant, while allegedly submitting misleading documents to the National Electric Power Regulatory Authority (NEPRA) to obtain the status of a small power producer.