Pakistan International Airlines (PIA) CEO has been touting the financial gains made by the national carrier all year, but the stock exchange still awaits financial statements from 2018. Last year’s financial data has not even been audited. However, the CEO claims that the airline had increased its revenues by 41 per cent in the last six months of 2019 and is ready to induct more aircraft by the end of 2020. Further, he claims to have achieved “breakeven at the operational level,” meaning the company’s revenues almost matched its operating costs, minus financing costs. However, he has failed to release statements beyond 2017. “The auditors are finalising the results for 2018,” the spokesperson of the airline told DAWN when asked about the status of the financial statements. “They should be ready before the end of the year.” For 2019, the delay will be longer since the company will be reappointing its auditors, he said. However, there are reports that “the airline’s auditors refused to sign the company’s financial statements for the first half and third quarter of 2017 due to some missing records,” (Propakistani.pk, Jan. 2019). Regardless, PIA still uploaded the unsigned statements for 2016 and 2017 on its public website. A corporation is a legal entity that is required to provide up-to-date, timely, and correct information to its stakeholders. That is, audited financial statements must be issued on time. Failure to do so is a violation of a corporation’s fiduciary duty and can harm stakeholders. Thus, a corporation can be sued for its failure to meet its fiduciary duty. The board, CEO, and many executives are also responsible and can be sued for their actions or inactions. Failing to submit audited financial statements on time while publishing unsigned statements are violations of the fiduciary responsibility of the corporation PIA, a corporation, has a responsibility to its shareholders. I wonder why no shareholders and/or the Pakistan Stock Exchange (PSX) has not taken any action to stop the misstatements of the PIA executives while the government and the naive shareholders are losing equity every day. As a corporation, the PIA is obligated to fulfil its responsibility defined under the law. Currently, the CEO and board of PIA have failed in meeting their obligations. The first and most obvious one is the failure to issue a financial statement on time. The second is diluting the shareholders’ equity during the life of the corporation without giving warning to the market about its future financial conditions. The third is appointing a CEO who has failed to fulfil his obligation in providing accurate and up-to-date information to the public and shareholders. Finally, possibly providing misleading information without any proof and hiding records that probably do not support the CEO’s claim of improved business. Failing to submit audited financial statements on time while publishing unsigned statements are violations of the fiduciary responsibility of the corporation. Further, PIA’s shareholders are losing money due to uncertain (or incorrect) financial information. All these are clear signs that someone is hiding the fact that PIA is still bankrupt, and shareholders and the public are being lied to so that PIA can stay in operation, and the board and the executives can make millions in salaries and other benefits. Stupidly, the government has taken the responsibility to pay all PIA’s debt so that the executives, the board, and some relatives of the politicians and bureaucrats get rich at the expense of the country without requiring them to prove their claims about solvency. It seems that everyone is complicit in robbing Pakistan’s national wealth. In addition to allowing the bankrupt organisation and its executives to keep their jobs, the PM thinks he can save PIA. As usual, his naivety is shining again. Just like he thinks, he has or can save the economy of Pakistan even though his policies have led the economy and the country towards bankruptcy. Worse yet, the government, a major shareholder of PIA, appoints members of the board of directors with no experience in business and who are probably not even qualified as business persons or who lack the proper educational credentials. To make the matter worse, the government has appointed the current Air Marshal as CEO. Sadly, in Pakistan, many businessmen think that a person who has served in the armed services makes a good executive. Unfortunately, most armed services personnel do not know how to run a civilian organisation, as they have no business or economics in their experience and training. Therefore, to expect an Air Marshal to save PIA is outlandish, and time will prove me right. The US Department of Defense (DOD) offers many examples of why serving in the military does not make them qualified running a business. The DOD had $6 billion of inventory with no records. In the past, it has paid $1,500 for a $100 toilet seat and $100 for a $10 wrench. Such purchases show how incompetent military personnel are when it comes to business sense. Another DOD agency failed to properly keep track of more than $800 million in construction projects, according to Politico. Many more such examples can be found. If the US military has a record of such incompetence, what would one expect from Pakistan’s forces? Therefore, if Pakistani business executives or the PM expects that retired or regular military personnel can help PIA become a better business, I say good luck for being naive. Let us see how this Air Marshal saves PIA. I predict that he will create the worst mess PIA has ever had. The performance history of PIA is clear, and anyone thinking that PIA can be saved now or in the future is living in La-La land. I can assure you that PIA will be losing money even in 2020 all the way to 2040 (if it still exists by then). To appreciate the dismal history of PIA, consider its performance. The last financial statement that PIA reported is for 2017. It was published for the Pakistan Stock Exchange (PSX) on August 25, 2019, almost two years after it was due. “The reason for the delay is a software glitch,” a PIA spokesperson told DAWN. He said two new accounting software programs were acquired by the airline in 2016. Their installation has taken some time, and then more time was needed to make staff proficient in using it. He further said, “By the middle of 2018, our team became proficient in the use of this software, so compilation of the numbers has taken some time.” This would never happen or be allowed in any business run by honest, competent people. Maybe it is an excuse for hiding the fact that PIA is still losing a large amount of money, and the CEO wants to hide the claim of improved performance without proof. Another proof of deception reported by thenew.com.pk (May 2019) is that in October 2018, “the PSX placed the company on its defaulter’s list for failing to hold an Annual General Meeting for its 2017 results. The announcement prohibited the trading of the airline’s shares until the meeting was held. In April 2019, the PSX repeated the warning, saying that further delay in the release of audited financial results will mean another suspension for the delay in reporting results for the financial year 2018.” These are signs of PIA hiding facts and failing to meet their fiduciary obligation. These two acts alone should force the CEO and the board of directors to resign, and shareholders should sue them for tremendous losses. According to tribune.com.pk (Jan. 2019), “PIA lost Rs 47.76bn in 2017 when it finally published the report of 2017 after two years; the report contradicted the claims of an increase in revenue as per its latest financial statements. The loss is worse compared to the preceding year’s loss of Rs 44.77bn with no end in sight. The company had negative equity of Rs 284bn in 2017. The unsigned and unaudited financial statement of 2018 shows a staggering loss of Rs. 67.32 billion in 2018, an increase of 32% over the previous year of loss of Rs. 47.7 billion. However, some estimate that when the audited statement is released, it will show a loss of Rs 90 billion in 2018. These losses include a whopping Rs.16 billion a year in interest alone.” DAWN reported (Oct 2017) that these losses did not just occur in 2017 or 2016. Historically, PIA has incurred losses every year for the past 12 years. Year Losses (billion) 2008 36 2009 5 2010 21 2011 27 2012 30 2013 44 2014 32 2015 33 As of 2017, the total accumulated losses swelled from Rs 93 billion in 2009 to Rs 360.39 billion in 2017. Thenews.com.pk (Nov 2018) reported, “overstaffing is the cause of continuing losses. PIA currently has around 15,000 staff for its 32 aircraft or around a 480 employee-to-aircraft ratio against the average ratio worldwide of around 150-200 employees per aircraft. Sources further said that the national carrier issued free tickets to 229 people from June 2016 to June 2018, and such practice results in losses worth millions every year.” The writer is Ph.D. (USA), Professor Emeritus (USA)