Senate panel okays SOE law tweaks

The Senate Standing Committee on Finance has approved amendments to the law governing state-owned companies, delegating powers to appoint and dismiss members of these companies to a Board Nomination Committee.

The Senate Standing Committee on Finance convened on Wednesday – with Senator Saleem Mandviwalla in the chair —to discuss the State-owned Enterprises Governance and Operations (Amendment) Bill, 2024. After detailed deliberations, the committee approved the bill.

Officials from the Ministry of Finance informed the committee that the law was originally enacted in February last year. Under the new amendments, a committee will be established to oversee the boards and performance of government companies. This committee will have the authority to nominate and remove board members in cases of irregularities.

Senator Sherry Rehman questioned whether the committee would have discretionary powers to remove board members and how this would be regulated across different companies with varying board authorities. The Ministry of Finance officials clarified that board members are guaranteed their tenure and cannot be removed without an inquiry.

Senator Anusha Rehman expressed concern that removing a board member for irregularities and corruption would be challenging. She said the government should have the authority to remove board members, similar to its power to appoint them.

Ministry of Finance officials said all government commercial companies and institutions fall under this law, excluding government educational institutions and hospitals.

Senator Anusha Rehman said the amendment allows for the removal of government board members. Chairman Mandviwalla remarked that the government seems to want to both grant autonomy to the boards and maintain control.