Senate on Friday passed unanimously the State-Owned Enterprises (Governance and Operations) (Amendment) Bill, 2024, aimed at strengthening the provisions for the removal of directors under the Act.
Minister for Law and Justice Azam Nazeer Tarar on behalf of the Minister for Finance and Revenue moved the bill in the House to amend the State-Owned Enterprises (Governance and Operations) Act, 2023 [The State-Owned Enterprises (Governance and Operations) (Amendment) Bill, 2024].
The minister said that the amendment was brought to enhance the efficiency of Board of Directors (BoDs) of all State-Owned Enterprises (SOE) besides ensuring good governance.
In the proposed changes, future board directors, including government and independent members, would undergo performance evaluations by the board’s nomination committee. Recommendations for removal would be sent to the federal government for approval.
The act would empower the government to nominate independent directors through an institutionalised mechanism and provide for the majority of independent directors, security of tenure, removal criteria, enhanced board independence, and appointment of chief executive officers on the recommendations of the boards.
The statement of objects and reasons of the bill says that the SOEs (Governance and Operations) Act was promulgated in February 2023. The Act, inter alia, provides for the matters relating to the constitution of Boards of Directors of SOEs.
Presently, there is a need to reconstitute the Boards of SOEs to better align them with the reform initiatives aimed at restructuring and transformation as well as privatisation of certain entities. In order to achieve the above objective, there is a need to strengthen the provisions for the removal of directors under the SOEs Act. Responding to points raised by Senators Ali Zafar and Syed Shibli Faraz, the minister said that the power would not only be limited to the BoDs of power sector entities. The amendment pertains to bringing good governance in the BoDs of SOEs, he added.
He said all issues were examined thread barely in the committee meeting, however, both members of PTI Syed Shibli Faraz and Mohsin Aziz did not turned up to the meeting.
Speaking on the occasion, Minister for Power Division Sardar Awais Leghari said that BODs were constituted under company ordinance. He categorically said that privatization of DISCOs was not yet presented before any BODs so far, he said.
He said framework has not yet be devised for privatization of the DISCOs and the stage came after appointing of Financial Advisor.
Regarding land asset calculation of DISCOs, the minister clarified that under NEPRA ACT, the DISCOs could not use its assets/land other than for power related purpose.
Foreign Minister Mohammad Ishaq Dar while speaking in the House said that the process of privatization would be very free and transparent. Being a chairman of the privatization committee, he would himself block the process if it lacked transparency.
He said the government would take on board his allies and this house before the privatization of any entity.
Regarding privatization of Pakistan Steel Mills (PMS) and Pakistan Telecommunication Limited (PTCL), he said that Pakistan received three bids for privatization of PTCL during Musharraf regime. The offer of 1st bidder (Etisalat) was more than the accumulative offers of bidder no 2 and 3. However, by the then then government headed by Shaukat Aziz and Gen Musharraf in haste included a clause in the privatization of PTCL that the government would transfer over 1000 PTCL properties to Etisalat.
