ISLAMABAD: Amid the opposition of the Finance Ministry, the Senate Standing Committee on Finance and Revenue recommended the “State Owned Enterprises (Governance and Operations) (Amendment) Bill, 2023” with amendments.
The parliamentary panel met with Senator Saleem Mandviwalla in the chair here on Wednesday and deliberated on the bill titled, “State Owned Enterprises (Governance and Operations) (Amendment) Bill, 2023.”
Senator Bahramand Khan Tangi, the bill’s mover, stated that the primary objective is to restrain the board of directors and chief executive officers of state-owned enterprises from using company assets for political and monetary purposes, proposing disqualification for such actions.
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The committee made two amendments in the amendment bill: first, reduced the 20 years of relevant experience for the chief executive officer to 10 years and changed the words “Personal gains and Political point scoring” to “Personal and Monetary Gains”.
However, the finance secretary opposed the amendments while saying that these were already covered in the Companies Act and the SOE law.
According to the proposed legislation, the federal government in the recommendation of the controlling ministry, in case of a company shall appoint a CEO having at least 20 years of relevant experience or concerned authority in case of statutory SOE under a performance based contract for a specified period unless such period is already specified in the enactment governing statuary SOE, provided that the Board or the concerned authority shall bring their existing arrangement with the appointment of CEO in line with this provision within one year of coming into effect of this law.
The Finance Division submitted that Section 22(2)(a) of the SOEs Act, 2023 defines: Notwithstanding anything contained in any other law for the time being in force, decisions of the Board shall be taken by majority, however the following decisions shall require a decision by three-fourth majority, which shall include the vote of the nominee director representing the Federal or Provincial Government, namely-(a) appointment and removal of chief executive officer of the state-owned enterprise;
In this respect, it is clarified that the independence of the Board is subject to Section 22(2)(a) of the SOEs Act, 2023 which states that the decisions regarding appointment and removal of the CEO of the SOE are required to be taken by the three-fourth majority, which shall include the vote of the nominee director representing the Federal or Provincial Government.
In this respect, Federal Government will exercise its role in the appointment of the CEOs through its nominated directors representing the Federal or Provincial Government and Section (18) of the SOES Act, 2023 does not eradicate the powers of the Government with respect to appointment and removal of the CEO of the SOE. It is further stated that the purpose of the SOES Act, 2023 is to give more independence to the Boards of the SOES regarding appointment of the CEO. Therefore, the proposed Amendment is against the spirit of the SOEs Act, 2023.
The committee took up the matter of Rs410 million that went missing from an overseas Pakistani’s account in Karachi.
The aggrieved party apprised the committee that they had transferred the amount to a foreign bank operating in Karachi, Pakistan in 2017. However, last year when they went to the bank for withdrawal, the bank replied that they had already withdrawn the amount and closed their account. They further added that bank officials had withdrawn their money by committing forgery, and currently, the matter is with the FIA.
Senator Mandviwalla stated that in the recent period, certain events have revealed that the State Bank has failed to protect the interests of depositors. The Committee decided to invite the Chairman of the Bank and the Director of FIA, along with Investigating Officers, in the next meeting for further deliberations.
The Senate body discussed the motion moved by Senator Zarqa Suharwardy on controlling the non-development expenditure of the Government.
The Secretary of the Finance Division stated that the government is complying with austerity measures, resulting in government spending for the current fiscal year staying within the budget. The Committee directed the Finance Division to provide details of the budget saved following the issuance of austerity measures notification, issued by the Finance Division.
While discussing the Public Petition for the deletion of the proviso in the Customs Act 1969 added by the Finance Act, 2022, Chairman FBR maintained that the proviso in Customs Act 1969 cannot be deleted as it is part of the Finance Act, 2022, and he assured the Committee that the FBR will consider the concerned proviso at the time of passage of the upcoming Finance Bill.
Furthermore, the Committee deliberated on the matter of Al Madina Floor Mills Aza Khel District Nowshera for providing fund subsidy, as assured by the Secretary of Finance. Imdad Ullah Bosal stated that the provision of funds would not be possible without a supplementary grant and requested the committee to invite the Secretary of National Food Security in the next meeting.
Additionally, the committee deferred the government bills titled, “The Deposit Corporation (Amendment) Bill, 2024” and “The Banking Companies Amendment Bill, 2024” until the next meeting.
The meeting was attended among others by Sherry Rehman, Saadia Abbasi, Zeeshan Khanzada, Kamil Ali Agha, Bahramand Khan Tangi, Zarqa Suharwardy, Secretary Finance Division Imdad Ullah Bosal, FBR Chairman Malik Amjed Zubair Tiwana, SBP Governor Jameel Ahmed and other senior officials of relevant departments.
Copyright Business Recorder, 2024
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