Delay in hiring MD irks shareholder

OGDC spokesperson insists existing MD performing duties to board’s satisfaction

ISLAMABAD:

The government’s failure to appoint permanent managing director of Oil and Gas Development Company (OGDC) has irked the state-owned company’s shareholders.

A shareholder in a letter to the OGDC board chairman, a copy of which was also sent to the Securities and Exchange Commission of Pakistan (SECP), has drawn the attention towards poor performance of the company in the absence of a regular MD.

He revealed that in the annual general meeting, held on October 28, 2021, the shareholders had been given assurance that the MD would be hired in the next four months. However, the deadline has passed but no appointment has been made so far.

Rather than appointing the MD, the shareholder said, the OGDC board started the process of hiring a chief operating officer (COO).

Earlier, the MD, appointed by the previous Pakistan Tehreek-e-Insaf (PTI) government, resigned due to “unsatisfactory performance”.

In the meantime, the OGDC officers association protested against attempts to hire the MD from outside of the company, which hampered the internal promotion of officers.

It argued that the OGDC management set the criteria in favour of the candidates from outside, adding that the practice restricted the growth of company officers.

According to sources, the new government wants to remove the officers appointed by the previous government by allegedly violating the recruitment rules and procedures.

“Senior government officials have received a number of complaints from different public sector enterprises, alleging that the previous government hired people on hefty packages before departing,” said a well-placed source in the new Pakistan Muslim League-Nawaz (PML-N) administration.

“The new government is considering reviewing the hiring made in the other profitable companies as well, which were allegedly done in haste and by violating the recruitment rules and compromising merit during the last days of the previous PTI government,” added a senior government official.

Earlier, the Auditor General of Pakistan termed the appointment of an executive director illegal and recommended the recovery of millions of rupees from him.

However, interestingly, the executive director was given a two-year extension by the board of directors instead of taking action against him.

“The company has also recently handed over the senior position of executive director exploration to a junior person by violating the eligibility criteria given in the advertisement,” a source in the energy ministry told The Express Tribune.

The government is a major shareholder in OGDC, which is the largest oil and gas exploration firm in the country.

The company posted profit of Rs91.3 billion in financial year 2020-21 on the back of surge in oil prices along with rupee devaluation against the dollar.

“OGDC MD is performing his duties as per his mandate and to the satisfaction of the board. OGDC has recently announced its results for the third quarter with significant increase in net profit,” said an OGDC spokesperson when asked for comments.

“Despite challenges, business plan is being implemented by way of aggressive exploratory programme, diversification and internationalisation.”

The spokesperson pointed out that discoveries in the Wali block, joint venture with Adnoc in Abu Dhabi and participation in Reko Diq are testament to the company’s growth-oriented business strategy.

“With the support of all stakeholders, the management is committed to maximising shareholder value.”

The spokesperson argued that all appointments in the company are made through a competitive process in accordance with the company policy and advertised criteria.

“No deviation or departure was made in the case of appointment of ED HR and ED Petroserve. OGDC has already furnished its response to the audit points to place on record the factual position.”

The officers have been appointed on the basis of their professional standing, experience and skills set, the OGDC spokesperson said.

“It is also incorrect to suggest that someone is favouring a particular entity. It is pertinent to note that a robust system of internal checks is in place and no individual can possibly exercise authority in an arbitrary manner.”

Published in The Express Tribune, June 3^rd, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.