LAHORE, Sept 28: The Lahore Electric Supply Company’s board of directors has ignored the rules of the Security and Exchange Commission of Pakistan (SECP) while appointing a company secretary, defeating the very purpose of “corporate governance and reforms” in the badly destroyed power sector.

The company had recently placed an advertisement in national dailies seeking applications for the post of secretary as all companies registered with the SECP are supposed to have a full-time secretary to “ensure compliance with statuaryprovisions of corporate law”.

However, though it chose to seek applications for the post of secretary to fulfill corporatisation requirement, it completely ignored the specific qualifications necessary because of the pivotal role the secretary plays in the transparent running of the company.

According to the SECP requirements, the secretary must either be a chartered accountant or a chartered secretary or holder of a master’s degree in business administration, commerce or law from a recognised university. Ignoring the criterion, Lesco restricted the applications only to those candidates who have an “MBA degree along with law.”

Insiders claimed that the company had rigged the SECP qualification criterion because it wanted to ensure the success of a “candidate who has already been selected for the job.” Since the already selected candidate had “MBA degree along with law,” the board decided to trim qualification criterion to suite the man, ignoring the SECP rules.

Lesco Board of Directors chairman Raffay Alam thinks that the SECP guidelines are for “only listed (on stock exchange) companies, whereas Lesco is not the one; all its shares are owned by the government.” Thus it can adjust the qualification.However, the advertisement defeats his argument. According to job profile given in it, the secretary has to ensure “compliance with statuary provisions of corporate law applicable to listed and non-listed companies with code of corporate governance.”

The roadmap given by the power-sector reforms programme also goes against the grain of the argument by the newly-appointed chairman of the Lesco Board to amend qualification of the company secretary.

According the government plan, two companies (Islamabad Electric Supply Company and Lahore Electric Supply Company) would be the first ones to be listed on the stock exchange, which may only be months away.Javaid Husain, who is a member of the selection committee, and had headed Sui Northern and Sui Southern, agreed that the SECP does not differentiate between a listed and non-listed company when it comes to appointment of the secretary. He, however, maintained that the board approved the post and advertisement for it, not the wording of the advertisement. It was left to the company staff to ensure that the “qualification and process are as per SECP rules.”

The committee, which meets on Thursday (today), would ensure that the SECP rules are followed in letter and spirit, he said and added: “The committee will first ensure everything falls within the SECP rules before taking the process any further.”