Sindh High Court orders GHCL CEO’s removal

The Sindh High Court has ordered removal of chief executive officer of Genco Holding Company Limited (GHCL) Muhammad Imran on the grounds that he is holding the post of a professional engineer while being a chartered accountant.

The judgment, reserved after the hearing conducted by Justice Zulfiqar Ahmed Khan and Justice Muhammad Saleem Jessar on May 18, was issued on Friday.

The SHC set aside the January 4, 2018, notification through which Imran was again appointed as the CEO after his initial appointment in 2016.

The court directed the federal ministry of energy (power division) to initiate the process of appointing a new CEO strictly in compliance with the Rules, 2013, Rules, 2015, and Pakistan Engineering Council Act (PECA) 1975, besides other relevant laws. The bench gave the federal government 30 days to implement the order and submit the compliance report.

Four Gencos are currently operating in the country under GHCL. These include Jamshoro Power Company Limited or Genco-I, Central Power Generation Company Limited or Genco-II at Guddu, Northern Power Generation Company Limited or Genco-III and Lakhra Power Generation Company Limited or Genco-IV at Jamshoro.

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The petitioner, Muhammad Sajan Panhwar, is the general-secretary of Water and Power Development Authority (WAPDA) Employees Pegham Union and works at Genco-I. His counsel, advocate Sajjad Ahmed Chandio, apprised the court that Imran's initial appointment was then challenged on the basis of Mustafa Impex case in Islamabad High Court (IHC). He was removed from the post during the hearing but he was again appointed on the same post on January 4, 2018, after approval by the federal cabinet by the then prime minister Shahid Khaqan Abbassi.

His appointment was challenged by the Pakistan Engineering Council (PEC), which had served a notice to the GHCL on September 1, 2016. The council underlined that under Section 27 (5A) of PECA 1975, only a PEC registered engineer could hold such an operational post in an engineering organisation.

"The CEO has to be a professional engineer as managing the power plants was a pure engineering specialty."

Advocate Chandio told the court that two predecessors of Imran were both professional engineers while the incumbent is a chartered accountant. The comments filed in the relevant petition by the PEC supported the petitioner's contention against Imran.

On the other hand, the CEO's counsel, advocate Haroun Bilal Sharif, contended that some other power companies like KEPCO are also being headed by non-engineers. He informed the court that the post was advertised on July 19, 2016, that a chartered accountant or master of business management and commerce were among the eligible qualifications. Imran, according to him, topped the list of candidates who had applied for the post.

Sharif also referred to a December 27, 2017, order of the IHC, which dismissed a similar petition challenging Imran's appointment on the same grounds. He also confronted jurisdiction of the SHC but the petitioner's counsel, advocate Chandio, responded by pointing that Genco-I existed in Jamshoro and its employees were domicile holders of Sindh's districts.

He also held Imran responsible for the closure of two electricity generation units in Genco-I Jamshoro due to his incompetence. Regarding the judgment of the IHC, the bench said the facts and circumstances of that case are different from the petition at hand in the SHC. "…that judgment fails to give any findings on the issue of the respondent [CEO] being a non-engineer."

The court noted that the GHCL was previously headed by professional engineers owing to which the PEC objected to Imran's appointment.

"It could be seen from a close examination of the said advertisement that the qualification criteria first requires an engineer and thereafter MBAs or CAs." The bench further observed that the reading of Section 27 (5A) of PECA 1975, made it clear that the GHCL ought to be under management of a professional engineer.

"This court isn't even sure that whether the respondent [CEO GHCL] knows the difference between an engine and a turbine which are two main thermal power generating equipment having poles apart efficiencies."

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The SHC also judged Imran's appointment through the lens of Public Sector Companies (Corporate Governance) Rules, 2013. The court referred to the rules 2 (A), 3 (6), 4 (3), 24 (1), 10 and clauses 1 and 2 of rule 14, underscoring that the requirement of 'fit and proper' candidate laced with professional skills for these posts has been emphasised in these rules.

The judgment stated that a combined reading of the Rules, 2013, Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015, and the schedule-II also necessitated competence, experience and ability for the post in question as the pre-requisites. The court also found the GHCL's website non-operational and held the CEO responsible for it.

"… we don't come to an agreement with the contentions of the learned counsel for [the CEO and HR chief of GHCL] that a chartered accountant is a fit and proper person to be the CEO of such a public sector company," the order reads.

The bench believed that if the former PM was briefed about the PEC's stance and professional requirement for the post of the CEO GHCL by the company's board of directors, which sent some names of the candidates for selection of one of them, he might not have appointed Imran.