Minister challenges SECP action against PRCL in Rs355m CEO package case

ISLAMABAD: Commerce Minister Jam Kamal has raised serious concerns over the SECP’s issuance of a show-cause notice to Pakistan Reinsurance Company Limited (PRCL) board members over allowing illegal Rs355m package to its former CEO.

The minister warned that the regulator’s unilateral action may undermine coordination between the two institutions, disrupt the company’s operational stability and negatively affect investor confidence at a time when PRCL is on the active privatization list.

In a formal communication dated 31 October 2025, Commerce Minister Jam Kamal Khan wrote to SECP Chairman Akif Saeed expressing reservations about the notice issued on October 17 to PRCL, its former Board members and its ex-Chief Executive Officer.

The letter, a copy of which has been seen by The News, states that PRCL, the country’s sole state-run reinsurance entity occupies a critical position in the national insurance and financial framework. Under the Rules of Business, insurance falls squarely within the ministry’s purview.

The minister said the SECP’s move, made without prior briefing or consultation with the administrative ministry, risked “undermining the coordinated working relationship” necessary between the regulator and state-run enterprises.

The minister noted that the timing of the show-cause notice coincided with two sensitive developments: PRCL’s ongoing CEO appointment process and its placement on the active privatization list. The letter warns that such regulatory action at this stage “may adversely affect investor confidence and the company’s operational continuity.”

A further concern raised was the delay in clearing newly nominated directors from the Ministry of Commerce and State Life Insurance Corporation -- a delay the minister says is based on procedural grounds not applied previously. This, according to the letter, has “impeded the CEO selection process and affected the smooth functioning of the company.”

The SECP’s show-cause notice relates to allegations previously reported by The News, wherein the commission accused PRCL’s former Board and ex-CEO of serious regulatory violations.

According to the notice, PRCL’s Board allegedly bypassed legal requirements in the former CEO’s appointment and approved an extraordinarily generous compensation package, allowing him to draw Rs355 million in just 32 months, far above the SPPS-III scale approved by the federal government.

The SECP said the Board appointed the individual as Acting CEO without obtaining government concurrence, failed to evaluate him under the “fit and proper” criteria, and submitted what the regulator believes was misleading information about his experience to satisfy eligibility requirements under the Insurance Ordinance and sound management regulations.

The Board was alleged of having approved extensive benefits including ten annual bonuses, severance payments, multiple allowances, club memberships, home furnishing support, recreation leaves and sizable annual increments in violation of the Companies Act and rules governing public-sector companies. The SECP notice had added that penalties for such contraventions may include up to Rs5 million in fines and disqualification for up to five years.