The Board of Directors (BoD) of Pakistan Steel Mills (PSM) has reportedly not approved perks and privileges of Chief Executive Officer (CEO) of the steel mills despite the passage of nine months since his appointment.
Sources close to Chairman PSM Board told Business Recorder, perks and privileges of CEO, approved by the Prime Minister and Cabinet Committee on Restructuring (CCoR) headed by Finance Minister, Dr Abdul Hafeez Shaikh which are about Rs 1.6 million per month, have neither been submitted by the mills to the Board nor has the Board sought any details. The Board is headed by Fazal Ullah Qureshi, a former Secretary Planning and Development Division.
On May 25, 2012, PSM Board was informed that Major-General Muhammad Javed (Retd) has been appointed as CEO, PSM whereas Shahid Mohsin Shaikh was posted as Chief Financial Officer (CFO). The Board was further apprised that according to Ministry of Industries and Production letter number 11. (11)/01-PR-III-steel of February 10, 2011 CEO and CFO are ex-officio members of the PSM Board. Consequently both the officers will be members of the Board of Directors.
However, the Board did not approve the appointment of Major General Muhammad Javed (retired) as CEO. According to the Companies Ordinance, 1984- Memorandum and Article of Association of Pakistan Steel Mills Limited, revised on April 2011 " The Corporation shall have a Chief Executive appointed in terms of section 198 and section 199 of the Companies Ordinance, 1984. The Board of Directors shall appoint any person or one of the Directors who is nominated by the shareholders to be the Chief Executive of the Corporation for a period of maximum three years and on expiry of the said period he will retire but shall continue to act till the appointment of his successors. He shall have administrative, financial and other power as are exercisable".
Sources said that a CEO can be nominated by the shareholders provided he is already a Director of the Board. Sources said, that procedurally the Ministry should have nominated him as a Director and may only recommend the Board for his appointment as CEO of PSM. The appointment powers ie direct appointment through advertisements or by way of accepting nomination of the Ministry are within the Board's prerogatives.
According to sources, remuneration of the CEO is to be determined by the Board; in the present case the Board never discussed any remuneration and never ratified or considered remuneration's. Sources maintained that there could be an audit in respect of exercise of financial approval and use of powers as CEO of anyone who is not procedurally appointed by the Board and his remuneration can also be subject to audit para as the same has not been determined by the Board.
Further the non listed companies also have to follow code of corporate governance which also recently was endorsed by the SECP. When this issue was discussed with the CEO at his office in Islamabad on February 8, 2013, he stated that since the Board accepted him as Director on the Board on the basis of a notification as CEO issued by the federal government there was no need to submit a separate case before the BoD for endorsement of his appointment. He, however, confirmed that his perks and privileges have not been approved by the Board as the notification was issued four to five months after the appointment.