Secretary Finance Dr Waqar Masood Tuesday stated that the government with 51 percent shares in Public Sector Enterprises (PSEs) can not exercise the powers of 100 percent shareholding after the government''s powers to remove the chief executive officers (CEOs) of PSEs was challenged by the opposing members. The issue that the government has the power to remove the CEOs of the PSEs where it has 51 percent shares came under discussion during a meeting of the sub-committee of the National Assembly Standing Committee on Finance here.
Finance Division and Securities and Exchange Commission of Pakistan (SECP) briefed the sub-committee on the provisions in the Companies Amendment Bill 2016 related to the procedure for appointment and removal of chief executive officers and board of directors at the PSEs. The meeting chaired by Daniyal Aziz was attended by Asad Umar and Nafeesa Shah.
The SECP officials informed the committee that as per rules and procedure, majority shareholders have the right to appoint members of the board of directors of the PSEs; however, for the nomination of the CEO, three names are proposed to the government and one of them is chosen for the appointment of the CEO for a period of three years.
The meeting was informed that no person under the law can be nominated director of more than five public sector companies. The meeting was informed that as per previous law, the power for removal of the CEO rests with the government and board is responsible for evaluating his/her performance.
Asad Umar of Pakistan Tehreek-e-Insaf and Nafeesa Shah of Pakistan People''s Party Parliamentarians objected that the powers of the removal of CEO must not be rested with the government.
Nafeesa Shah wondered as to why the government being majority shareholders wants to deprive the minority shareholders from say in the removal of the CEOs. The SECP official contended that the government has the discretion to remove the CEO but it is subject to judicial review.
Dr Waqar Masood said the government has not made changes in the law and the previous regime is continuing, adding this is the company law and not the statutory one. The law has not been amended but changes are made in rules of business in the Companies Ordinance 2016, he added. The company law provides the right to make it functioning as per their desires. He said the government having 51 per cent share in public sector enterprises can not exercise the powers of 100 shareholdings.