LAHORE: The Lahore High Court (LHC) allowing a petition of Chief Executive Officer of Sui Northern Gas Pipelines Limited (SNGPL), Syed Ali Javaid Hamdani held that the board can initiate an inquiry against the CEO before removing him from office but without seizure of his powers.
The court held that the incumbent CEO is also a director of SNGPL and as a member of the board has the same powers, functions and responsibilities as any other member of the board.
The court therefore directed the petitioner the incumbent CEO to assume his office forthwith with full powers as were immediately held by him before the date and time of the 600th emergent meeting of the board of SNGPL.
Board terminates service contract of SNGPL MD
The manner and conduct of the impugned 600th emergent meeting of the Board of SNGPL with less than one day notice under a vague and generalized agenda infringed various principles of good governance under the applicable law and as such the same was unlawful being not held in accordance with law the court held.
The court further stated that the impugned 600th emergent meeting of the board of SNGPL and declared all the impugned decisions taken therein are declared unlawful, illegal, void ab initio, of no legal effect.
The court said all related and subsequent developments and acts of the board emanating or arising from any act or decision taken in the 600th emergent meeting of the board of SNGPL are also set aside.
The court dropped the contempt proceedings inter se the parties in order to provide an opportunity to the incumbent CEO, members of the board and all other concerned persons to act in accordance with law.
However, any willful deviation or deliberate disobedience of the court verdict by any person shall confer the right to any aggrieved person to initiate fresh contempt proceedings, the court observed.
The court asked for a fresh meeting of the SNGPL board to take stock of all events since the date of the impugned meeting of the board and necessary decisions may be taken strictly in accordance with law.
The fresh meeting of the board shall include the specific agenda for initiation of inquiry or removal of the CEO, the court added.
Briefly, during the course of service, certain allegations and complaints arose against the CEO. The Chairperson of the Board on February 17, 2023 required the company Secretary to call an emergent meeting of the Board to discuss critical human resource issues with transparency and governance implications.
The meeting of the board was held on February 18, 2023. It is alleged by the Petitioner attempted to cancel or illegally disrupt the meeting of the Board and consequently, the meeting was conducted via Zoom.
The board after thorough deliberation resolved that the petitioner shall seize to exercise any of his powers as the CEO of SNGPL with immediate effect. In this respect, the board also revoked the power of attorney in favour of the petitioner till further orders and delegated the powers to DMD(S) Amer Tufail being the senior most officer of SNGPL with immediate effect.
It was further resolved that a new power of attorney will be executed in due course of time in favour of the Acting CEO to enable him to exercise all powers and functions germane to the office of the CEO in accordance with law in his capacity as Acting CEO.
Thereafter, the petitioner instituted petition and court held, the acts of the board of SNGPL of suspending the incumbent CEO and/or withdrawing his powers, appointing the acting CEO and conferring him the powers of the CEO were unlawful, illegal and void-ab-initio being in violation of Section 190 of the Companies Act the court concluded.
Copyright Business Recorder, 2023