Appointments of CEOs of PSCs: Cabinet directs SECP to finalise amendments to regulations

ISLAMABAD: The Federal Cabinet has directed the Securities and Exchange Commission of Pakistan (SECP) to finalise amendments to regulations expeditiously meant to appoint CEOs of Public Sector Companies, well-informed sources told Business Recorder.

These instructions were issued during discussion on the appointment of Managing Director, House Building Finance Corporation (HBFC). The Finance Division, referring to Sub-Section 4 of Section 187 of the Companies Act, 2017, stated that the Federal Government is empowered to nominate Chief Executive Officer of a Company where majority of directors on the Board are nominated by the Government, in such manner as may be specified.

Syed Basit Aly, Director (OG-7), Infrastructure, Housing and SME Finance Department, SBP was appointed by Federal Government as Managing Director/CEO, HBFCL on deputation basis on October 20, 2017 for period of three years. The three years term expired on October 19, 2020.

The post was advertised in the national newspapers on August 4, 2020. In response to the advertisement, twenty five applications were received. After assessment of the CVs, credentials of the candidates, on the basis of required educational qualification, relevance and diversity of their experience, the Scrutiny/Shortlisting Committee shortlisted six candidates. Out of six shortlisted candidates, five candidates appeared for interview before the Selection Committee while one candidate regretted to appear before Selection Committee for interview.

The Selection Committee, comprising of Dr. Abdul Hafeez Shaikh, Finance Minister, Dr. Ishrat Hussain, Adviser to Prime Minister on Institutional Reforms and Austerity, Abdul Razak Dawood, Adviser to Prime Minister on Commerce and Investment, Naveed Kamran Baloch, Secretary Finance and Secretary, Establishment Division interviewed the five candidates.

The Selection Committee assessed the candidates as per the laid down criteria i.e. professional knowledge & expertise, leadership qualities and communication skills in the interview and recommended the following three candidates in order of merit for appointment as Managing Director (MD): (i) Imran Ahad (Principal); (ii) S H Irtiza Kazmi (alternate-1) and; (iii) Sanwal Qureshi (alternate-2).

Further, under Sub-Section 2 of Section 188 of Companies Act, 2017, Federal Government is competent to approve pay package/Terms and Conditions of appointment of MD, HBFCL, which stipulates the terms and conditions of appointment of a chief executive nominated under section 186 or 187 shall be determined by the Government, in such manner as may be specified.

The sources said, the following proposal was submitted for approval of the Cabinet: (i) Imran Ahad (Principal Candidate) may be appointed as Managing Director/CEO, HBFCL for period of three years under Sub-Section 4 of Section 187 of Companies Act, 2017, on pay package (ii) in case, the Principal Candidate does not accept offer of appointment within 15 days from the date of issuance of notification of appointment, the offer of appointment on same pay package will be issued to alternate candidate-1, ie, S H Irtiza Kazmi and if he does not accept the offer of appointment within 15 days of issuance of notification, the offer of appointment will be issued to Alternate-2, ie, Sanwal Qureshi on the same pay package offered to Principal Candidate.

During discussion, reference was made to the policy for selection to the positions of CEOs in 65 entities identified by the Establishment Division, in its Memorandum of March 28, 2019. It was noted that the SECP had yet to amend Rule (5(2) of the Public Sector Companies (Corporate Governance) Rules, 2013. The Prime Minister advised the Finance Division to ensure that the required amendments were made expeditiously.

The Cabinet approved the appointment of MD HBFC subject to confirmation by Law and Justice Division that the process followed by Finance Division, in the instant case, is in accordance with Section 187(4) of the Companies Act, 2017 and Rule 5(2) of the Public Sector Companies (Corporate Governance) Rules, 2013.

The Cabinet further directed that SECP shall frame/finalize the regulations specifying the manner in which nominations are to be made by the Federal Government, in terms of Section 187(4) of the Company's Act 2017, at the earliest.

Copyright Business Recorder, 2020