Half a dozen ad agency executives in Pakistan, including the head of McCann Worldgroup's local affiliate, are being detained, along with several former government officials, in a corruption investigation, according to local press reports.
The government officials awarded almost $55 million for public awareness ad campaigns to seven ad agencies between 2013 and 2015 without following rules for public procurement, says a report by Pakistan's government-owned news agency Associated Press of Pakistan.
Pakistan's National Accountability Bureau in Karachi said in a statement to local media that the government officials favored themselves and certain ad agencies in awarding over-priced contracts. Corruption in government and business is a major problem in Pakistan.
Local media named Masood Hashmi, CEO of Orient Communications, which runs Orient McCann Pakistan, as one of the agency executives detained. Orient is McCann's local partner in Pakistan in an affiliate relationship that doesn't involve any equity. Global networks often have non-equity local partners, who pay a fee to use the network's name, in smaller markets where they do little business.
McCann's New York office says the company "is investigating the situation" and declined to comment.
Ad Age's phone and email messages to Orient Communications in Karachi weren't returned, and no one answered the phone at Pakistan's National Accountability Bureau.
Executives from other ad agencies, including Asim Amir Khan Sikander, senior executive director at Evernews Concepts; Gulzar Ali and Salman Mansoor, directors of Adarts Karachi; and Syed Naveed, owner of Media Power Link, were also named as being detained. The most senior government official accused is Sharjeel Inam Memon, the former Minister for Information and Archives Department, along with a former secretary, deputy director, information officer and section officer from the same government department.
The press reports said the agency executives and former government officials would appear before an "accountability court" this week.