Federal government has added Zafar A. Khan, former Chairman Karachi Stock Exchange (KSE), and Noman Dar, President Habib Bank Limited, to the Board of Directors of Pakistan Steel Mills (PSM), official sources told Business Recorder. In October 2013, the federal government had reconstituted PSM after getting formal approval of Prime Minister Nawaz Sharif.
The composition of BoD was as follows: (i) Secretary Industries and Production (Chairman); (ii) Secretary Privatisation (Member); (iii) Additional Secretary (Corporate Finance), Finance Division (Member); (iv) CEO, PSM (Member); (v) Asad Ali Khan, Chartered Accountant (Member); (vi) Engineer, Jabbar Memon (Member); (vii) Shah M. Saad Hussain, HRM professional (Member); (viii) Sohail P. Ahmad, corporate sector professional (Member); and (ix) Ahmad Alman Aslam, banker/corporate restructuring professional.
The sources said Zafar. A Khan will replace Chairman PSM Board, Shafqat Naghmi, who is Secretary Industries and Production. His appointment was found to be in violation of Corporate Governance Rules 2013 notified by the SECP. The sources said, appointment of Federal Secretary as the chairman of the board does not provide any environment of independence for decision-making process and it becomes more questionable when the privatisation process has started and the Chairman is not an independent Director but influencing the Board as a government representative.
In the normal situation, the management is always under the obligation of the Secretary due to his position of being principal accounting officer and influencing authority on the public sector companies under the ministry of industries and production. A three-member committee of the Board prepared the restructuring and privatisation plan and presented it before the Economic Co-ordination Committee (ECC) of Cabinet, which was rejected. Later on, Secretary Industries and Production himself prepared a plan encompassing five options, which was also turned down. The sources said Federal Government believes that some of the members of incumbent Board and its Chairman are not sufficiently competent to prepare an effective restructuring and privatisation plan due to which they are being replaced.
When contacted, Zafar A. Khan told Business Recorder that he was not aware that the government has included his name in the PSM Board. "I am not sure I will accept this position as the government did not take him into confidence prior to including his name in the Board," he added.
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