Suggestion to retain CEOs of Discos: Cabinet grills top brass of Power Division

ISLAMABAD: The Federal Cabinet has reportedly grilled top brass of Power Division for seeking permission to retain services of Chief Executive Officers (CEOs) of three Discos retiring on superannuation till appointment of regular CEOs, well-informed sources in Power Division told Business Recorder.

On December 15, 2020, Power Division stated that there were 10 Distribution Companies (Discos) under their administrative control. These Discos were Public Sector Companies (PSCs) as defined under Section 2 (1) (54) of the Companies Act, 2017 and Rule 2 (1) (g) of the Public Sector Companies (Corporate Governance) Rules, 2013. The matters of appointments of the CEOs of such PSCs were governed under Sections 186, 187, 188 and 189 of the Act Rule 5(2) of the CGR and the Public Sector Companies appointment of Chief Executive) Guidelines, 2015 and fit and proper criteria framed thereunder. Presently, these Discos were headed by the General Managers(GMs/ Chief Engineers) posted in various Discos on assignment of look after basis as a stop gap arrangement on temporary basis. It was now proposed that the appointment against the positions of CEOs of these Discos may be carried out on regular basis.

Section 187 of the Companies Act, 2017 read with Rule 5(2) of the CGR and the relevant paras of the guidelines, laid down that the BoD shall carry out the recruitment process including advertisement and shortlisting on fit and proper criteria and furnish a panel of at least three candidates to the line Ministry for submission of the case to the Federal Government after due deliberations at the level of the line Ministry. On approval of the government, the Chief Executive may be appointed on terms and conditions as may be determined by the Government as per section 188 (2) of the Act.

Power Division intended to get the process of recruitment initiated against the positions of CEOs of Discos in accordance with uniform guideline for the Discos Boards containing uniform requirements and terms and conditions as follows: (i) the candidate must posses at least 20 years' experience including at least 10 years working in power sector, with at least three years' experience at senior management position; (ii)candidate must posses a bachelor degree in engineering with a Masters' degree in engineering or business/public administration or management or economics of finance; (iii) the candidate must not be more than 62 years of age on the date of advertisement; (iv) salary and allowance as permissible to MP-1 scale (at the initial stage hiring shall not be under MP scale policy, MP-1 scale; (v) the initial contract shall be for a period of three years, with annual performance evaluation to be conducted by the respective Boards and; (vi) employment contract containing detailed terms and conditions.

Power Division informed the Cabinet that Shahid Iqbal Chaudhry, Mujahid Pervez Chattha and Mohsin Raza Khan had been working as Chief Executive Officers of IESCO, LESCO and MEPCO, respectively, since November 2, 2018, February 1, 2018 and August 13, 2020, respectively. These officers were retiring on superannuation on December 10, 2020, January 9, 2021 and January 14, 2021 respectively. Since the process of recruitment of CEOs was being initiated, it was proposed to allow these officers to continue holding these positions till appointment of a regular Chief Executive Officer or for 90 days, whichever was earlier. In the case of Shahid Iqbal Chaudhry the approval may be with effect from December 11, 2020, since he was retiring on December 10, 2020. This proposal was in line with Section 187 (3) of Companies Act, 2017.

During discussion, the members expressed serious reservations on allowing the retiring officers to hold charge as CEOs. It was suggested that officers who were not close to retirement should be given the responsibility for the interim period. The age restriction of 62 years in the terms and conditions also came under discussion and it was opined that the best person for the job should be selected regardless of age.

Power Division drew attention to the decision of the Supreme Court which placed a bar on government service beyond 65 years of age. The Advisor to the Prime Minister on Institutional Reforms & Austerity pointed out that the decision of the Supreme Court would not be applicable in this case since these appointments were being made under the Companies Act, 2017, which does not place any age restriction. After detailed discussion, the Cabinet approved appointment of CEOs of Discos with the stipulation that restriction on upper age limit of 62 years for the post shall be excluded since it was not tenable under the Companies Act, 2017.

Copyright Business Recorder, 2020