PESHAWAR: Four days after removing chairman Board of Directors of Bank of Khyber, the PTI-led government on Tuesday issued another notification rescinding its previous order and reinstated Hamad Awais Agha, making its senior coalition partner, Jamaat-i-Islami, unhappy.

The short order issued by finance secretary said: “In compliance of the Chief Secretary, Khyber Pakhtunkhwa, the notification of the Finance Department bearing No. BO (F/L)FD/1-2/2015/Vol.III, dated 26.06,2015, regarding substitution of Chairman BOD, BoK, is hereby withdrawn.”

The finance secretary in a notification issued on June 26, in a surprising development, had appointed Dr Ihsanul Haq as director of BoK’s Board of Directors by replacing him with Chairman, Additional Chief Secretary, Planning and Development Department, Hamad Awais Agha.

Jamaat-i-Islami’s Muzaffar Said, who holds the portfolio of the minister for finance, expressed his displeasure over the cancellation of the notification, terming it against the interest of KP and its bank.

“I don’t know who ordered the withdrawal of the notification but it is against the interest of the province and the bank,” Mr Said argued.

The Jamaat-i-Islami took up the matter immediately with Chief Minister Pervez Khattak and a meeting had been convened today (Wednesday) to mull the matter, the finance minister said.

The nomination of Dr Ihsanul Haq, a retired civil servant, known for his association with Jamaat-i-Islami, as director of BoK’s Board of Directors had raised eyebrows, though Mr Said defended the decision, saying it was done to offset the implication of what he described as a bad decision by Mr Hamad to accord undue advantage to private shareholders.

However, according to the Bank of Khyber Act 1991, the chairman of the board is to be nominated by government from amongst official directors.

Govt reinstates chairman Board of Directors of the bank after his removal four days ago

Whether the finance department obtained prior approval from the chief minister is not clear but competence, jurisdiction and mandate notwithstanding, locking of horns by two key departments in the open has caused huge embarrassment and brought the spotlight on a bank that has suffered due to political interference.

Analysts worry that the internal wrangling could impact the reputation of the bank and draw punitive action from the regulator, State Bank of Pakistan, that might end up in removal of directors or other managerial persons from the office and or superseding Board of Directors.

Insiders say that this was not the first time that a tiff had arisen between the bureaucracy and the finance minister on managing the affairs of BoK.

In the not too distant past Sirajul Haq, the then finance minister, who had opted to quit his office and provincial assembly seat to move to the Senate after becoming his party’s head, developed serious differences over the bank matters with the former secretary finance, Sahibzada Saeed Ahmad, which ultimately ended up in his transfer from his position.

Mr Siraj, as finance minister during the MMA government, too had drawn criticism for interfering and over the appointment of a managing director of BoK, who was found to have held a fake PhD in Islamic Banking.

Insiders say that the current incident was sparked off by a series of events that had been brewing over for the past about two years.

Finance Secretary Said Badshah Bukhari, who has just retired, was believed to have an uneasy relationship private shareholder which got aggravated with the passage of time.

Mr Bukhari had been of the view that the private shareholder holding 26 per cent was entitled to have two directors on the board and not three as being asked for. The government of Khyber Pakhtunkhwa is the largest shareholder with 71 per cent shares in the bank.

The finance department therefore fielded a nominee to contest the elections as it was in a position to easily get him elected through proxy.

However, reportedly on the request of Maqsood Ismail, the private shareholder, who justified his version that all along he had had three directors on the board, the practice should continue in the interest of encouraging private sector, the ACS P&D prevailed upon the finance department to withdraw its nominee.

Consequent upon the withdrawal of the nominee, the stage was set for the election of three directors unopposed.

The finance department being outwitted issued orders to call off the Annual General Meeting, which was not complied with. The ACS, as chairman of the Board of Director of BOK, went ahead with the AGM as planned and three directors belonging to the private shareholders group were elected unopposed.

This, say the insiders, caused a row between the finance and P&D departments which eventually led to the removal of the ACS as chairman of the BoK’s Board of Directors. The chief secretary, however, moved against on Tuesday to annul the previous notification and restore Mr Hamad as chairman of the BoK’s Board of Directors.

The finance secretary, who incidentally retired the day he signed the rescinding order, and additional chief secretary did not respond to text messages for comments on the issue.

“It will be interesting to see who relents on this issue. Will it be the chief minister again, who has to keep the JI in good humour to save his government or will it be the JI to concede space,” an analyst wondered.

Published in Dawn, July 1st, 2015

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