The Board of Directors (BoD) of Pakistan Steel Mills (PSM) has accepted the justification of management with regard to exit of Chief Financial Officer (CFO). Official documents available with Business Recorder reveal that the Board was informed that Shahid Mohsin Shaikh, CFO Pakistan Steel who was also ex-officio member of BoD, tendered his resignation on 22nd January, 2013 on personal grounds.
The matter was referred to Board Human Resource Committee (BHRC) which considered it in its meeting held on 31st January, 2013 and decided to present the same in a Board meeting. The Board discussed the matter in detail and finally accepted the resignation of Shahid Mohsin Shaikh from the post of CFO with immediate effect and suggested to the management of Pakistan Steel to advertise for the post of CFO as early as possible.
During discussions it was noted that for the last two years the officers of A/CEO and CFO were held by the same person, which generated a conflict of interest. The Chairman explained the special circumstances under which the two positions were held by one person in the past.
The CEO revealed that GM (Accounts and Costs) has been appointed as Acting CFO. After discussions the Chairman of the Board concluded that PSM management and HRC must immediately advertise the post of CFO. The management gave the following reasons behind CFO's resignation:- Chief Finance Officer (CFO) tendered his resignation at his own free will and cited personal reasons for doing so. He also submitted application for the grant of a 19-day leave from 28-1-2013 to 15-2-2013, which was also sanctioned to him. He is widely criticised for his failure to collect the GOP grant of Rs 01 billion, resultantly the grant lapsed. He is also accused of failing to give any concrete suggestions in writing for the improvement of financial health of PSM. He proved himself a complete failure to develop cordial relations with banks and other financial institutions. In a meeting on 11th January, 2013 with the Minister of Finance, he wrongly committed to pay an amount equivalent to $15 million to M/s PASSCO whereas PSM is not in a position to pay the existing debt due to financial constraints. In a meeting with the Secretary Petroleum, he allegedly wrongly committed for the payment of M/s SSGC dues, as a consequence of that M/s SSGC has issued notice to PSM for disconnection of gas supply due to non-payment of SSGC outstanding dues. He always proved himself a complete failure to adopt a quick strategy for the arrangement of finances required for the purchase of raw materials. During the briefing to ECM on January 22, 2013 on a cash flow position by CFO, ECM members noted with concern that financial arrangement was the weakest link in the implementation of the business plan, which needed to be strengthened. ECM directed CFO to come up with a workable/realistic financial plan to meet the financial requirements. He lodged a complaint against CBA but later withdrew it, creating suspicions about his professionalism.
The Board was also informed that Farrukh Sadiq submitted a conditional request dated 13th December, for extension in the period of contract as General Manager (Internal Audit) for a period of one year from January 1 2013. As per Pakistan Steel Officers' Service Rules and Regulations, the required conditions of eligibility for the post of General Manager are a Masters Degree in relevant discipline from recognised university with 15-20 years of post-qualification experience. Farrukh obtained his bachelor's degree in Commerce in 1999. He possessed only 6 years post-qualification experience before he joined Pakistan Steel and about 51/2 years experience in Pakistan Steel. The request for elevation to the post of General Manager and enhancement of package was examined by IED, who did not recommend the same.