ISLAMABAD: The Federal Cabinet has reconstituted Board of Directors (BoD) of Postal Life Insurance Company Limited (PLICL) aimed at converting it into an independent company under Companies Act.
Sharing the details, the sources said that Financial Action Task Force (FATF) placed Pakistan on its grey list category in June 2018. Asia Pacific Group (APG) was mandated by FATF regime to ensure effective implementation of international standards on Anti Money Laundering (AML) and Countering Terrorist Financing (Cr). APG conducted an evaluation of Pakistan for compliance against proffered recommendations and published its Mutual Evaluation Report (MER) in October 2019. The MER highlights 13 points regarding Pakistan Post Office Department (PPOD). One of the key points raised in MER was the absence of regulatory oversight over various services and functions of Pakistan Post Office Department (PPOD).
The Postal Life Insurance (PLI) was part of PPOD. For compliance of APG recommendations, and in order to extend a regulatory oversight regime, PLI was registered as a Section 42 Company under Companies Act 2017, under regulatory ambit of Securities and Exchange Commission of Pakistan, after approval from Federal Cabinet. Postal Life Insurance became PLICL.
The following officers of PPOD were notified as directors of PLICL Board of Directors (BoD); (i) Arshad Ali Khan, Additional Director General (A85F)-BS-21; (ii) Irfan All Baloch, Postmaster General BS-21; (iii) Zafar Ali Malik, Deputy Director General (Admn) BS-20; and (iv) Syed Athar Ali Shah, Postmaster General BS-20.
The BoD in its formative phase managed to get the PLICL registered with SECP on August 26, 2020. In accordance, with clause 2(2) of the Sound & Prudent Management Regulation 2012 of SECP, the BoD members and CEO need to be approved by SECP. However, SECP approved the appointment of all BoD members with the exception of Arshad All Khan. The SECP also did not accord approval of Arshad Ali Khan as CEO. It was also mentioned that Irfan Anwar Baloch and Syed Athar All Shah had retired from the government service with effect from September 25, 2020 and September 15, 2020 respectively. This situation had rendered the BoD of PLICL non-functional.
It was noted that the Section 165(3) of the Companies Act 2017 provides that the government had the authority to remove any Board member, who holds the office at the pleasure of the government.
The Ministry of Communication proposed that in order to salvage this inadvertent situation and to ensure compliance with MER recommendations, the BoD of PLICL needed to be reconstituted. Communications Ministry sought the approval of the Cabinet to the following nominations/replacements in ex-officio capacity as Directors of the Board; (i) DG (BS-22), PPOD (Ex-Officio Director/Chairman); (ii) Sr Joint Secretary (BS-21), M/o Communications (Ex-Officio) -Director; (iii) Dy DG (Admn) (BS-20) (Ex-Officio) Director; and (iv) Dy DG (SI) (55-20), PPOD (Ex-Officio) Director.
The Board, so constituted, shall manage the change management process of PLICL into an independent Section 42 Company Act under the regulatory supervision of SECP.
Copyright Business Recorder, 2020