Islamabad: After three decades of devolution, the Pakistan Muslim League-Nawaz government has silently restored powers of the prime minister to sack heads of public sector entities (PSE) without assigning reasons. The government or the prime minister did not have the powers to remove a chief executive officer or managing director of a PSE under the Companies Ordinance of 1984 which had ensured that heads of such entities took independent commercial decisions in the best interest of the companies.
In fact, the powers to remove a chief executive were well defined in the 1984 law so that heads of public sector companies could not play in the hands of the government or any other interest group. The chief executives also had security of tenure under the law. The chief executives of companies will now tend to follow written or verbal directives of the ministries concerned to save their jobs and, at the same time, try to balance rights and powers with boards of directors.
Informed sources said that amendments to the law were made following resistance in recent years by some chief executives who approached high courts against removal orders issued by respective ministries with the approval of the prime minister. The high courts had set aside the removal orders.
In one such example last year, the government had removed chief executive of Sui Northern Gas Pipelines Limited Arif Hameed when he refused to sign agreements relating to import of liquefied natural gas (LNG) and its sale to consumers on terms unacceptable to his company and the board of directors. The government has changed this protection available to chief executives by adding a sub-clause to Section 191 of the Companies Ordinance 2016 promulgated on Nov 11, which says that the protections and conditions provided in the sections 186 and 187 shall not apply to a person nominated by the government.
