ISLAMABAD: While still in the government, the Petroleum Division has announced the nomination of Caretaker Finance Minister Dr Shamshad Akhtar as chairperson of the board of directors of the state-owned Sui Southern Gas Company Ltd (SSGCL) for another three-year term.“In recognition of her professional dedication and unwavering efforts, the government had nominated Dr Shamshad Akhtar for another tenure as chairperson of the board of directors for which elections will be held”, said a statement issued by the Petroleum Division. She is already holding the same position on a temporary basis through repeated extensions while also working as finance minister.

An official said the interim arrangement of the SSGCL board would be maintained until the first week of March because she could not contest elections to the chairperson position as finance minister. Once the new government is in place, Dr Akhtar will become eligible to contest chairperson’s elections to ensure continuity on the pattern of nomination of Punjab Chief Minister Mohsin Naqvi to the top slot of Pakistan Cricket Board.

The Petroleum Division said that Dr Akhtar along with board members of SSGCL had successfully led the organisation since her initial appointment in 2019. Under her leadership, SSGC has achieved significant milestones in crucial areas such as upgradation in the technology, improvement of business operations, human resources, policy formulation, discipline, risk management and significant reduction of Unaccounted-for-Gas (UFG) and collectively contributed significantly to budgetary systems, audit, finances, UFG strategies etc.

The Petroleum Division said the UFG in Sindh province has decreased from 15pc to 7pc, showing the effective approach of the management and the SSGCL board, especially Dr Akhtar.

Decision contradicts SOE Act requirements

Strangely, the Petroleum Division did not mention SSGCL’s 50pc UFG in Balochistan as reported by the Oil and Gas Regulatory Authority (Ogra) in its latest determination of SSGCL’s revenue requirement for the current fiscal year. Also, Ogra has worked out about 15.5pc average UFG in its latest price notification for the current month.

The Petroleum Division had earlier written to the SSGCL’s company secretary and Dr Akhtar that the term of the board had expired long ago and multiple extensions have also lapsed since.

“As 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.

The Petroleum Division, however, said it now fully supported and reposed its trust in SSGC, its board and Dr Akhtar as chairperson of the board “in all legal, governance and financial matters”. However, it did not comment on the legal requirements like the SOE Act 2023 and Companies Act 2017 which are also applicable to SSGCL, being the public sector listed company.

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 and 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.

The Petroleum Division said the SSGCL board had been involved in the policy and strategic decision-making and delegated the implementation to the management team. It said the institutionalisation of high-quality performance assessment and result-based accountability was underway in SSGCL to meet the expectations of stakeholders for which the new employment handbook had been developed under the oversight of the board.

Published in Dawn, January 24th, 2024

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