ISLAMABAD: Caretaker Finance Minister Dr Shamshad Akhtar is retaining the position of chairperson and independent director on the board of directors of the state-run Sui Southern Gas Company Ltd (SSGCL) apparently against the letter and spirit of the State Owned Enterprises (Governance and Operations) Act 2023.

Dr Akhtar who also continues to be the chairperson and independent director of the Pakistan Stock Exchange among others had assumed the official position of the caretaker finance minister in August last year. As finance minister, the entire corporate sector including the PSX comes under the policy jurisdiction of the Ministry of Finance although the financial interests of the government and the stock exchange are not only different but could potentially conflict with each other.

The caretaker minister did not respond to written questions about the conflict of interest and violations of the SOE’s law for holding the position of SSGCL chairperson and the finance minister at the same time. However, at a recent news conference, she denied that the gas tariff increase involving finances of the gas company as chairperson of the Economic Coordination Committee (ECC) of the Cabinet and BoD of SSGCL had any conflict of interest.

In contrast, Minister for Power and Petroleum Muhammad Ali soon after joining the caretaker cabinet got a resignation from a family member working in the Power Division for years to rule out the conflict of interest.

Law bars public officials from holding multiple positions

His ministry — Petroleum Division of the Ministry of Energy — has formally reminded the SSGCL company secretary and chairperson of the SSGCL board that the term of the board had expired long ago and multiple extensions have also lapsed since.

“Since the term of current board has already expired, it is required that elections must be held at the earliest”, it wrote on Dec 28, 2023, adding that elections were scheduled on Oct 23, 2023, but postponed for six weeks and with the approval of the SECP the date for board elections was extended till Dec 4, 2023. However, the elections were not held within the stipulated time and have been postponed for the fourth time till March 4.

As a public sector listed company, the SSGCL is subject to the applicability of the SOE Act 2023 and the Companies Act of 2017. Interestingly, Dr Akhtar herself announced the SOE policy as finance minister under the SOE Act as a policy action under the IMF programme. Section 11(i) of the SOE law explicitly requires that an individual holding a political office, irrespective of any legislative role, is barred from being appointed or continuing the position of an independent director.

Also, section 31 of the said law requires the federal government to set up a central monitoring unit (CMU) in the Ministry of Finance to ensure quarterly reporting on the performance of SOEs. The CMU has already been established it has also published updated financial reports of SOEs because of the Dec 31 deadline of the IMF. As finance minister, both CMU and SSGCL come under her supervision.

Likewise, section 166(2)(h) of the Companies Act 2017 requires that an independent director, in case of a public sector entity, should not be in the service of an institution owned or controlled by the government. Interestingly, the caretaker finance minister is simultaneously holding the position of board chairperson of an entity that is owned and controlled by the government.

Published in Dawn, January 17th, 2024