KARACHI, Feb 7: Less than 36 hours before the meeting of the board of directors of Pakistan State Oil (PSO) was to be held on the morning of Feb 6, the Ministry of Petroleum & Natural Resources dismissed the Board and installed new people to preside over the oil marketing company. The Board was scheduled to declare financial results of the company for the half year ended on December 31 at the meeting.

While investors in stocks could scarcely be expected to have sympathy with those who were made to step down and all but apathy for those who were ushered into the board room, the timing and manner in which the ‘interim government’ disbanded the old board has been taken in distaste.

Reports indicate that similar changes in haste have been made on the boards of several other enterprises in which the government commands the biggest share. The investors’ concern for an abrupt change of the PSO board stems more from the ministry’s decision to stay the old board from declaration of financial results. The inquisitive among the investors have been naturally trying to sniff ‘something’ foul in the 1H08 results.

The PSO stock, which carries quite a weight in the KSE-100 index, lost Rs9.40 or 2 per cent of the value in two days, part of it due to the bear market and partly due to question marks on upcoming accounts. Major players at the market say that the government being the majority shareholder has the right to put people of its choice on the board and the inefficient, if thought unfit for the job had best be shown the door. But a statement accompanying such change would have done much good to dispel investors’ fears.

The shareholders cannot take an issue with the postponement of the board meeting. A former managing director of Karachi Stock Exchange, M. A. Lodhi confirmed that the companies do seek approval of date of holding board meetings from the bourse, but such meetings could be postponed on the occurrence of any unforeseen event.

And a major stock player joked: “Since the elections are to be held in less than two weeks, will the new government retain the new boards at the government-controlled institutions or will they too prove to be just as ‘interim’ as the present administration”.