ISLAMABAD: The Senate Friday ‘unanimously’ passed the State Owned Enterprises (Governance and Operations) Amendment Bill, 2024, as the opposition stormed out of the House, alleging it was a move aimed at selling off public sector entities at throw-away prices without facing any hurdle.
Minister for Law and Justice Azam Nazeer Tarar, on behalf of the Minister for Finance and Revenue, moved the draft law in the House, which seeks to empower the government to remove members of the board of directors (BoDs) of SOEs, on the recommendation of board nomination committee.
While explaining the amendment bill, Tarar noted the amendment was brought to enhance efficiency of the BoDs of all State-Owned Enterprises and ensuring good governance. As per the proposed law, the future directors, including government and independent members, would undergo performance evaluations by the board’s nomination committee. Recommendations for removal would be sent to the federal government for action.
The draft law would empower the government to nominate independent directors through an institutionalised mechanism, providing for the majority of independent directors, security of tenure, removal criteria, enhanced board independence, and appointment of chief executive officers on the recommendations of the boards.
According to the statement of objectives and reasons of the bill, “Presently, there is a need to reconstitute the boards of SOEs to better align them with the reform initiatives aimed at restructuring and transformation as well as privatisation of certain entities. ….there is a need to strengthen the provisions for the removal of directors under the SOEs Act”.
However, the opposition lawmakers raised strong objections and questioned the motives behind the move. PTI’s parliamentary leader in the House Syed Ali Zafar alleged that there was an ulterior motive behind it. He cautioned that if passed in the present shape, the draft law would take away the currently secured three-year term of the board of directors of SOEs, whereas one of the basic principles of corporate governance was independence and security of tenure.
The government, through the law, he believed, wanted to get powers to remove board of directors without issuing any show-cause notice to them and replace them with their favourites on the basis of pick and choose, alleging the intent was to privatise some profit-making institutions. He went on to charge that the design behind this piece of legislation was to sell assets after under valuing them.
The minister rose to insist that the appointing authority always had the powers to remove and that the amendment was just meant to streamline the things and enhance efficiency of the Boards of Directors of State-Owned Enterprises.
Leader of the House in Senate Muhammad Ishaq Dar held out an assurance to the legislators that privatisation process would be taken forward in a transparent manner and due process would be followed. He also made it clear, “As chairman of Cabinet Committee on Privatisation, I will not entertain anything which is beyond any rules, process and transparency. If any transaction lacks transparency, and due process is not followed, then the first blockade will be the CCoP”.
Referring to the Supreme Court’s June, 2006 decision to annul the sale of Pakistan Steel Mills (PSM) to a three-party consortium, he said hundreds of billions had been lost because privatisation could not materialise. He added that how much Pakistan bled because of that single decision.
He also referred to privatisation of PTCL during General Pervez Musharraf days in power, and inclusion of a clause in, what he called, the absurd agreement due to which Etisalat was yet to pay over $800 million to Pakistan.
Dar proposed formation of a special committee on why the privatisation of Pakistan Steel Mills did not occur and how to deal with Etisalat matter, concerning the colossal amount.
Leader of the Opposition in the House Shibli Faraz was then on his feet to endorse him and said that it was sheer incompetence that Pakistan still had to get its amount, which was outstanding as a result of privatisation of the PTCL.
However, he said the PMLN and the PPP were the two parties which made controversial agreements with independent power producers, putting a burden on masses to get the costliest electricity. Shibli regretted that the country had virtually gone bankrupt because power sector’s circular debt and pensions were two major challenges for it.
With a paper in his hands, which he said, someone had given to him, Shibli alleged that Power Minister Awais Leghari had got appointed his brother Jamal Leghari as the chairman of Board of Directors to Multan Electric Supply Company (MEPCO).
He called for holding accountable all those who signed flawed power purchase agreements involving capacity charges and suggested a thorough examination of the agreements, as it was a matter of the country’s future.
Later, the bill was passed through voice vote, while the opposition members staged a walkout from the House as a mark of protest against it.
Some senators from the PPP and PTI’s Saifullah Abro paid rich tribute to former premier Zulfikar Ali Bhutto and condemned removal of his government on July 5, 1977 by dictator Ziaul Haq.
Senate Chairman Yusuf Raza Gilani, in his concluding remarks, said all political forces of the country had joined hands to sign a Charter of Democracy in 2006, which paved the way for revival of the 1973 Constitution in its original form afterwards.
During the question hour, replying to a question from a senator, Minister for Information Ataullah Tarar told the House that the government had not stopped advertisement of any television channel and that the ads are being given in accordance with their ratings.
He said newspapers received advertisements worth over Rs9 billion, whereas television channels got ads worth over Rs6 billion during the last five years. He clarified that no new tax had been imposed on newspapers in the budget, as proposed 10 per cent tax had been dropped.
The House was prorogued sine die on the conclusion of its business.
