Conflict of interest : MPAs’ appointments illegal, LHC informed
Court issues show-cause notice to the LPC
Lahore High Court. PHOTO: FILE
LAHORE:
LHC) was informed on Friday by the Securities and Exchange Commission of Pakistan (SECP) that the appointment of MPAs Ramazan Siddique Bhatti and Kiran Dar as Lahore Parking Company (LPC) directors violated corporate governance rules.
The court also issued a show-cause notice to the company in this regard. “Rule 3(7) of the Public Sector Companies (corporate governance) Rules 2013 requires that a person proposed to be appointed as a director shall not suffer from a conflict of interest; including political office holders in legislative roles,” SECP Additional Registrar of Companies Liaquat Ali Dolla told the court in a written reply. The reply came in the wake of a petition against the appointment of 12 MPAs as directors across five companies operating in the public sector. These are the LPC, the Lahore Transport Company (LTC), the Punjab Saaf Pani Company (PSPC), the Lahore Waste Management Company (LWMC) and the Punjab Agricultural and Meat Company (PAMC).
Dolla further said that the names of the two MPAs had been disclosed in a statement of compliance filed by the LPC before the SECP for 2014. He said they had been named as independent directors in the document which failed to mention that they held public office and rendered a legislative function. Dolla said the SECP had already initiated proceedings against the LPC under Rule 25 for failing to file a statement of compliance for 2015. He said the matter had been fixed before the commissioner for hearing. Dolla said the commission would ensure that the standard requirements governing the nomination of individuals to be elected to the company’s BoGs were fulfilled.
The SECP functionary said the LPC was the only company of the five named in the petition that was registered with it. He said the remaining had been incorporated as joint stock companies under Section 5 of the Companies Ordinance 1984 with the pertinent registrar. Justice Ali Akbar Qureshi of LHC adjourned the hearing of the petition till May 18 after perusing Dolla’s reply.
Petitioner Mian Mehmoodur Rasheed, the leader of the Opposition in the Provincial Assembly (PA), had said MPA Ramazan Bhatti was one of the LTC’s directors. He had said lawmakers Nasreen Nawaz, Ramazan Bhatti and Kiran Dar were serving as directors of the LPC. Rasheed had said MPAs Kashif Padhiar, Amanullah Khan, Qazi Adnan Fareed, Rana Babar Hussain, Chaudhry Lal Hussain, Mahmood Qadir Khan, Qamarul Islam, and Waheed Gul were directors of the PSPC. He had said MPA Majid Zahoor was serving as one of the directors of the LWMC while MPA Hussain Gardezi was a director of the PAMC.
Rasheed had told the court that the companies were incorporated under Section 42 of the Companies Ordinance 1984 and were owned by the provincial government. He had said the MPAs were serving as directors of the various companies in violation of section 3(7) of Public Sector Companies Corporate Government Rules 2013.
The Pakistan Tehreek-i-Insaf (PTI) leader had said the provision proscribed the holder of a political office or one rendering a legislative function from becoming a director of a company governed by Public Sector Companies Corporate Governance Rules 2013. He had said all the aforementioned individuals were members of the PA and had been serving on boards of the various companies. This, Rasheed had told the court, was illegal.
He had requested the court to direct the Public Sector Companies Corporate Governance Rules 2013 to be implemented. Rasheed had also requested the court to direct the Law Ministry, the Punjab chief secretary and companies to desist from appointing those with political affiliations or exercising legislative functions. He also requested the court to declare the exercise of authority by these MPAs as directors illegal, null and void.
Published in The Express Tribune, May 14th, 2016.
LHC) was informed on Friday by the Securities and Exchange Commission of Pakistan (SECP) that the appointment of MPAs Ramazan Siddique Bhatti and Kiran Dar as Lahore Parking Company (LPC) directors violated corporate governance rules.
The court also issued a show-cause notice to the company in this regard. “Rule 3(7) of the Public Sector Companies (corporate governance) Rules 2013 requires that a person proposed to be appointed as a director shall not suffer from a conflict of interest; including political office holders in legislative roles,” SECP Additional Registrar of Companies Liaquat Ali Dolla told the court in a written reply. The reply came in the wake of a petition against the appointment of 12 MPAs as directors across five companies operating in the public sector. These are the LPC, the Lahore Transport Company (LTC), the Punjab Saaf Pani Company (PSPC), the Lahore Waste Management Company (LWMC) and the Punjab Agricultural and Meat Company (PAMC).
Dolla further said that the names of the two MPAs had been disclosed in a statement of compliance filed by the LPC before the SECP for 2014. He said they had been named as independent directors in the document which failed to mention that they held public office and rendered a legislative function. Dolla said the SECP had already initiated proceedings against the LPC under Rule 25 for failing to file a statement of compliance for 2015. He said the matter had been fixed before the commissioner for hearing. Dolla said the commission would ensure that the standard requirements governing the nomination of individuals to be elected to the company’s BoGs were fulfilled.
The SECP functionary said the LPC was the only company of the five named in the petition that was registered with it. He said the remaining had been incorporated as joint stock companies under Section 5 of the Companies Ordinance 1984 with the pertinent registrar. Justice Ali Akbar Qureshi of LHC adjourned the hearing of the petition till May 18 after perusing Dolla’s reply.
Petitioner Mian Mehmoodur Rasheed, the leader of the Opposition in the Provincial Assembly (PA), had said MPA Ramazan Bhatti was one of the LTC’s directors. He had said lawmakers Nasreen Nawaz, Ramazan Bhatti and Kiran Dar were serving as directors of the LPC. Rasheed had said MPAs Kashif Padhiar, Amanullah Khan, Qazi Adnan Fareed, Rana Babar Hussain, Chaudhry Lal Hussain, Mahmood Qadir Khan, Qamarul Islam, and Waheed Gul were directors of the PSPC. He had said MPA Majid Zahoor was serving as one of the directors of the LWMC while MPA Hussain Gardezi was a director of the PAMC.
Rasheed had told the court that the companies were incorporated under Section 42 of the Companies Ordinance 1984 and were owned by the provincial government. He had said the MPAs were serving as directors of the various companies in violation of section 3(7) of Public Sector Companies Corporate Government Rules 2013.
The Pakistan Tehreek-i-Insaf (PTI) leader had said the provision proscribed the holder of a political office or one rendering a legislative function from becoming a director of a company governed by Public Sector Companies Corporate Governance Rules 2013. He had said all the aforementioned individuals were members of the PA and had been serving on boards of the various companies. This, Rasheed had told the court, was illegal.
He had requested the court to direct the Public Sector Companies Corporate Governance Rules 2013 to be implemented. Rasheed had also requested the court to direct the Law Ministry, the Punjab chief secretary and companies to desist from appointing those with political affiliations or exercising legislative functions. He also requested the court to declare the exercise of authority by these MPAs as directors illegal, null and void.
Published in The Express Tribune, May 14th, 2016.