Pakistan Steel Mills (PSM) Board of Directors (BoD) has reportedly been criticised by Secretary Ministry of Privatisation, Amjad Ali Khan for exercising powers to "appease" the Chief Executive Officer (CEO), Major General Muhammad Javed (Retd), well informed sources told Business Recorder.
"The matter relating to contract period of CEO was not discussed in the 367th Board meeting. It is also pertinent to clarify under what conditions / procedure and rule of law the Board has ratified the appointment of CEO for a period of four years as the provisions of the Companies Ordinance 1984 section 199 states that such appointment shall not be for a period exceeding three years from the date of appointment," the sources added.
Amjad Ali Khan is a firm supporter of PSM''s privatisation - a white elephant. Ahsan Iqbal, presumptive Federal Minister in the PML (N) government told reporters on Saturday that all the Chief Executives of Public Sector Entities (PSEs) are being replaced with honest CEOs.
The sources said, the conditions of the bailout package of Rs 14.6 billion were finalised by the CEO without discussion in the board, and the CEO proposed the bailout package, conditions and components of the package. According to sources, the Board was apprised after bailout package was agreed with Ministry of Production and Ministry of Finance. The BoD often remained under pressure from CEO who dominated the Board. One conversant with companies Law and Code of Corporate Governance informed this correspondent that any loan agreed or acquired by a company under Companies Law needs discussion in the Board under section 196 of company law and this also applies to PSM. He said that a board is equally responsible for any acquired loan and in the event that the objective of the loan is not achieved, then too the board is equally responsible.
The caretaker government has refused to extend another bailout package of Rs 11 billion to the PSM saying that this proposal should be placed before next government. Insiders claim that agreement with the CBA would add another Rs 8 billion to the books of the loss-making public sector entity.
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