The Auditor General of Pakistan detected 16 significant irregularities in the accounts of PIA - Pakistan International Airlines (PK, Islamabad Quaid-e-Azam Int'l) amounting to PKR6.085 billion rupees (USD39.4 million), The News International newspaper, citing a Geo News television report, said.

A letter to CEO Arshad Malik dated January 28, from Muhammad Yaseen, head of the Directorate General Commercial Audit and Evaluation, said that "numerous serious violations of the rules and regulations" had been noticed and reported in the hiring, promotions, and postings of some employees at the state-owned flag carrier.

The letter pointed to a dubious PKR700 million (USD4.53 million) financial deal related to the development of inflight entertainment solutions, a contract given to a company that had been registered only two months previously.

As previously reported, Malik has been facing a high court ruling temporarily banning him from performing his duties, as the former Pakistan Air Force deputy chief of staff allegedly lacked relevant education and experience for the job. The audit has simultaneously been analysing PIA's accounts since receiving multiple complaints about them.

The audit found that even though PIA had suffered significant losses, benefits worth PKR3 million (USD19,400) had been unlawfully awarded to Malik, there had been an "illegitimate elevation in allowances and benefits to officers on deputation from the Pakistan Air Force" amounting to PKR71.86 million (USD465,000), and there was an "irregular induction of staff with fake degrees" at the cost of PKR25.68 million (USD166 million).

The audit report also recommended an inquiry into the company's district manager in Rawalpindi for allegedly approving and settling advances by providing fake invoices.

Asked for comment, PIA's human resources department told The News International: "The management has taken the observations raised by the office of the Auditor General of Pakistan most seriously. In fact, we believe that an audit oversight helps bring about a positive process or system improvement, hence we again assure you of our fullest cooperation.

However, it added: "We believe that the intent of carrying out the audit and action taken on anonymous complaints indicates mala fide on part of some of the disgruntled employees of this company who intend to challenge the writ of the management and sidetrack us from our turnaround initiatives, which have started to bear fruit."