Cabinet members question USC performance

Stress on automation of organisation to curtail corrupt practices

Zafar Bhutta June 22, 2021


Cabinet members have questioned the performance of Utility Stores Corporation (USC), which has been allegedly marred by corruption.

During a meeting of the cabinet on June 8, members pointed out corrupt practices in the corporation while discussing the performance of the USC. The issue came under discussion while considering appointment of USC managing director.

The members were informed that the revenue of USC had increased from Rs10 billion to Rs100 billion and the previously loss-making entity was now showing an operating profit. The automation of the organisation was in final stages, which would be pivotal in curtailing corrupt practices.

The prime minister underlined the importance of early automation of USC and the FBR, especially FBR’s Track & Trace system and directed to resolve all impeding issues on priority. The finance minister informed that the date of the case challenging Track & Trace system had been fixed on June 11, 2021, and it was expected that the matter would be disposed of favourably.

Read more: You can buy ‘only sugar’ from Utility Stores

It was also pointed out that terms and conditions of appointment are governed under Section 188(1) of the Companies Act, 2017 whereby the board, instead of the federal government/cabinet, was competent to determine the same.

The Industries and Production Division apprised the cabinet that the USC, a public sector company, was incorporated under the Companies Act, 1913 (now Companies Act 2017), with a vision to ease the underprivileged and economically vulnerable segments of the country, through financial support of the federal government.

The tenure of the incumbent USC MD Umer Habib Lodhi had expired on May 2, 2021. In a meeting of the USC board, advertisement for the position of managing director was approved, which was subsequently published.

In response to the advertisement, a total of 27 applications were received against the said post. Human Resource & Nomination Committee of the board scrutinised the applications and shortlisted 10 candidates for final interviews.

The USC board conducted final interviews in April 2021 and unanimously, recommended the following three names (in order of priority) for the post, in line with Rule-5 (2) of the Public Sector Companies (Corporate Governance) Rules, 2013.

In order of merit, the board recommended; Umer Habib Khan Lodhi, Taha Aziz Magrabi and Muhammad Sajjad.

In lieu of the above, the proposals were submitted for approval of the federal cabinet.

The Ministry of Industries recommended appointment of managing director from the list of three recommended candidates.

It also sought approval of the cabinet to allow the USC board of directors to appoint the next candidate in the list as managing director, if the one appointed by the federal government, due to any reason, is not able to join; and allow the board to determine the terms and conditions of service of the managing director so appointed.

The cabinet directed that his terms and conditions, including pay raise, may be settled by the Board and approved the appointment of Lodhi as USC managing director.

Published in The Express Tribune, June 22nd, 2021.

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