NTDC: IHC sets aside notifications

The Islamabad High Court (IHC) on Saturday set aside notifications, including the one with regard to suspension of chairman of National Transmission and Dispatch Company (NTDC). Earlier, the water and power ministry headed by Khawaja Muhammad Asif had directed to initiate the process for appointment of managing director NTDC besides increasing the number of its board members.
A single bench member headed by Justice Athar Minallah of IHC set aside the notifications which was challenged by noted lawyer Babar Sattar terming it government''s interference in the matters of NTDC. During the course of hearing, the petitioner contended before the court that the power utility business and the generation, transmission and distribution were different things.
The petitioner argued that the federal government had no authority in relation to the affairs of the NTDC except in the manner provided under the Companies Ordinance 1984. He argued that the Corporate Governance Rules (CGRs) provide for the mechanism regarding how a public sector company shall be governed and the CGR are binding on the federal government.
Additional attorney general Afnan Karim Kundi and another counsel for federal government Ali Shah Gillani argued before the court that the CGRs were directory and not mandatory. They argued that "notwithstanding the Corporate Governance Rules being valid and subsisting, the federal government is conferred with absolute and unfettered powers under section 183 of the Companies Ordinance 1984 to nominate or remove a member of the board of NTDC."
The judgment pointed out that federal government is a shareholder owning 88 percent of the shares, and it is not the only stakeholder. The board of directors, employees of the NTDC, minority shareholders are equally important stakeholders. The court noted that the ministry of water and power admitted that the NTDC board comprised of professionals and competent directors but despite this fact, it did not bother to raise key matters related to the functioning of the company before the said board.
Subsequently, the judgment declared that the ministry of water and power has no discretion, exclusive authority or right to make appointments or remove members of the board of director or the chief executive of the NTDC through direct intervention.
"Consequently, the notification dated September 29, 2014 for removal of chairman NTDC, advertisement dated November 11, 2014 seeking candidates for the appointment of its managing director, the notification of April 15, 2015 purportedly expanding the board of directors...issued by the respondent without lawful authority and jurisdiction, therefore, the same are set aside," the court ruled. The court directed the federal government to "strictly comply with the provisions of the Companies Ordinance 1984, the CGR and the Articles of the Association of the NTDC."