Cabinet may okay trust fund rules

The cabinet, which is scheduled to meet on Tuesday, is likely to approve revised rules for the public sector entities holding trust funds to pave the way for investment in non-government securities.

According to directives of the Board of Investment (BOl), the Federal Employees Benevolent and Group Insurance Fund (FEB&GIF) has proposed revised terms of reference (TORs) for its investment committee.

It has incorporated different requirements and analysis of financial ratios for investment in non-government securities instead of merely depending on reports of credit rating agencies, which will help avoid any weak investment decision.

Sources told The Express Tribune that the Finance Division had given its consent to TORs of the investment committee.

The FEB&GIF scheme was introduced in 1969 through the promulgation of Federal Employees Benevolent Fund and Group Insurance Act 1969. This is a welfare fund governed by the board of trustees, headed by the establishment secretary.

The prime objective of launching the scheme is to provide financial assistance to the widows/orphans of federal government employees including the specified autonomous bodies.

Funds are generated through contribution by the employees and the receipt of investment. Surplus funds are invested in different permissible investment avenues under Section 7(t) of the 1969 Act.

Under the Act, the money held in the benevolent fund is invested in government securities and units of Investment Corporation of Pakistan (ICP) or National Investment Trust (NIT), in the construction of buildings for the purpose of rent income and in other profitable ventures the plans for which have been approved previously by the federal government.

The Finance Division had permitted the public sector entities, holding trust funds such as pension, benevolent or insurance funds, to draw up investment policies with the help of their own boards.

Accordingly, the FEB&GIF, with the approval of board of trustees and in consultation with the Finance Division, approved TORs for its investment committee in 2004. Some additions and changes were also approved by the board - the competent forum as per the Finance Division policy.

As per directives of the BOl, the FEB&GlF proposed revised TORs for the investment committee by incorporating different requirements and analysis of financial ratios for investment in non-government securities.

The cabinet is also likely to allow the cultivation and commercialisation of hemp for industrial and medicinal purposes.

Comprehensive deliberations were held on the commercialisation of hemp at the Ministry of Narcotics Control where representatives of the Ministry of Commerce, Ministry of National Food Security and Ministry of National Health Services were present.

Later, the Ministry of Science and Technology requested for hemp plantation for industrial use and a summary was prepared for seeking permission from the Prime Minister’s Office.

The PM Office advised the Ministry of Narcotics Control to seek approval of the federal cabinet under Section 4 of the Control of Narcotic Substances Act 1997 for the cultivation of hemp for industrial and medicinal purposes.

A similar case had been submitted by the International Centre for Chemical and Biological Sciences, University of Karachi seeking permission for the cultivation of industrial hemp at different locations.

The cabinet is also likely to approve the reconstitution of board of directors of Pakistan Petroleum Limited (PPL).

The Petroleum Division has proposed the name of Shahab Rizvi as board director and possible board chairman from Sindh. Other names proposed for the board include Khurshid Bhaimia, Imtiaz AH Laliwala, Aftab Ahmad, Abid Sattar and Mian Imtiazuddin.

Board members representing the provincial and federal governments include Balochistan energy secretary, Petroleum Division additional secretary (administration), another official from the Petroleum Division and a representative of the Finance Division.

The government, in pursuance of its policy of empowerment of non-political and autonomous boards, reconstituted the PPL board on June 3, 2019 for its remaining statutory period.

The tenure of the board is set to expire on August 30, 2020 whereas the extraordinary general meeting for the election of directors is scheduled to be held on Sept 16, 2020.

The government of Pakistan holds 74.86% of the paid-up capital of PPL. Its board comprises 11 directors including the managing director.

Published in The Express Tribune, September 1^st, 2020.

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