ISLAMABAD: According to Section 155(3) of the Companies Act, 2017 any casual vacancy on the board of a listed company shall be filled up by the directors at the earliest but not later than 90 days from the date, the vacancy occurred.
Further, according to Rule 3A(3) of Public Sector Companies (Corporate Governance) Rules, 2013(3) a director nominated by the government shall hold office in accordance with Section 183 of the Ordinance.
During the audit of the SNGPL for the fiscal year 2021-22, it was observed that the government-nominated director elected in the AGM meeting held on July 6, 2020, tendered resignation on December 4, 2021, resulting in a casual vacancy of director. However, this casual vacancy had not been filled despite a lapse of 90 days as prescribed by law despite the fact that the company informed the Petroleum Division to get approval for nomination from the federal cabinet.
This resulted in non-compliance of laws related to the appointment on casual vacancy of government director.
The audit was of the view that non-compliance by the Petroleum Division resulted in weak oversight related to the appointment on casual vacancy of the director.
The matter was reported to the management in October 2022. The management in its reply on January 12, 2023, stated that the company had repeatedly requested the Petroleum Division for nomination of a director to fill the casual vacancy.
The audit recommended that the matter may be looked into besides seeking approval of government-nominated director.
Copyright Business Recorder, 2023