Under the proposed plan, companies involved in commercial operations must be converted into companies that own shares. PHOTO: FILE
ISLAMABAD: The government is struggling now to revive Sarmaya-e-Pakistan Limited (SPL), a company established by the Pakistani government of Tehreek-e-Insaf (PTI) to change the loss-making companies that have become disabled due to the resignation of the majority. board member from the start.
In an effort to revive the company, the government has replaced Counselor as Prime Minister of Finance Dr. Hafeez Shaikh with Prime Minister Imran Khan as chair of the Cabinet Committee for State-Owned Enterprises. The PTI Government has prepared SPL with a capital of Rs500 billion in an effort to take over management control and have better supervision of all public sector companies. But the company’s operations stopped because the majority of the company’s board of directors resigned from the start.
Sources told The Express Tribune that the resignation of six of the eight independent directors from the start of the company caused a halt to the recruitment process for key SPL positions including chief executive officer, chief financial officer and company secretary.
The Finance Division moved the summary on December 17, 2018 to the Federal Cabinet which approved the constitution of the Cabinet Committee for State-Owned Enterprises (CCoSOEs). CCoSOEs approved the nomination of eight independent members of the SPL Board of Directors in its first meeting held on January 2, 2019. With the approval of the federal cabinet, the Finance Division included the SPL in February 2019 as the holding company to direct, supervise, supervise and coordinate the management of subsidiaries.
The SPL Board of Directors consists of eight independent directors and three ex-officio directors. The SPL has remained non-functional since its inception mainly because of the resignation of independent directors, thus stopping the recruitment process for SPL’s key positions including chief executive officer, chief financial officer and company secretary. The Finance Division moved the summary for CCoSOEs on 7 December 2019 to accept the resignation of six independent directors and approved the appointment of four new independent directors, who had given their approval to serve on the SPL Board.
However, due to the preoccupation of the CCoSOEs chair, Pakistan’s prime minister, the CCoSOEs meeting could not be held. Given the very busy schedule of Prime Minister Imran Khan, the Finance Division submitted a summary for approval that the PM’s financial advisors could be appointed as CCoSOEs chair. While agreeing to the proposal, the prime minister was glad to have the matter placed in front of the federal cabinet, as the cabinet division knew.
The Finance Division requested the cabinet’s approval to appoint Shaikh as chair of CCoSOEs, which was granted. To revive the loss-making public sector companies, the government has decided to frame the right governance structure while paying attention to the best international practices followed in Singapore and Malaysia.
Under the proposed plan, companies involved in commercial operations must be converted into companies that have share capital and then are transferred to the SPL.
Previously, Prime Minister Adviser for Institutional Reform and Savings Dr. Ishrat Husain had highlighted that recommendations for the placement of certain entities in Sarmaya Pakistan had been made in connection with the previous cabinet decision. However, he also sought clarity on whether the concept of Pakistan’s Sarmaya was still valid or not.
Shaikh has told the prime minister and cabinet members that due to legal complications related to the Sarmaya concept of Pakistan, easier alternatives are being explored. Cabinet members also expressed concern over the fate of employees affected by the closure / merger of various organizations. It has been clarified that according to previous cabinet directives, no employees will be laid off and instead will enter the surplus group for further adjustment in other organizations.
Published in The Express Tribune, May 3rd, 2020.