ISLAMABAD: K-Electric (KE) has asked Power Division to nominate at least two Directors to represent the Government of Pakistan (GoP) at the KE Board.
In a letter to Secretary Power Division, KE’s Chief Risk Officer/Company Secretary, Rizwan Pesnani has noted that elections of KE Board of Directors are expected to be held on July 29, 2022. The KE Board of Directors has fixed the number of Directors to be elected at the Extraordinary General Meeting at thirteen.
According to Company Secretary, KE is currently owned by KES Power Limited (KESP), having ownership of 55.40%, Government of Pakistan (GoP) having ownership of 24.36%, and certain minority shareholders accounting for the remaining equity stake of 9.24%.
Regulation 6 of Listed Companies (Code of Corporate Governance) 2019 obligates the listed companies to have minimum 2 to 1/3d Independent Directors (lDs), whichever is higher. Accordingly, KE is required by the Regulations to have at least four lDs on the Board.
Based on KE’s shareholding structure, GoP can nominate up to 3 Directors on KE Board. However, GoP may limit its nomination to 2 Directors to enable the company to comply with the requirements of appointment of lD.
Company Secretary maintains that pursuant to Section 165 of the Companies Act, 2017 Directors nominated by GoP, not exceeding pro rata to their shareholding, shall be appointed to the Board automatically.
Subsequently, once nominated Directors are appointed to the Board, the total number of votes available to the nominating body (in this case the GoP) at a Directors’ elections will be reduced by the proportionate number of votes corresponding to the nominated Directors.
KE has asked Power Division to send early response on the letter but the nominations have to be provided 14 days before the date of Elections which are expected on July 29, 2022 in which case the last date of nomination would be July 15, 2022, in order to complete statutory requirements relating to Directors’ elections under relevant rules and regulations.
Copyright Business Recorder, 2022
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