PM has no power to dissolve SNGPL, SSGCL’s BoDs

ISLAMABAD: Former caretaker Minister for Petroleum and Power and prominent lawyer Ali Zafar Shah says neither the prime minister nor the federal cabinet has any power, whatsoever, to order dissolution of the board of directors (BoD) of the listed public companies like the Sui Southern and Sui Northern.

On Dec 13, Prime Minister Imran Khan, approved disbandment of the BoDs of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for being unable to foresee the gas shortage and not informing the government in time regarding the malfunctioning of gas compressors that pump natural gas to the upcountry.

When contacted by The News, Zafar Shah said that the directors were elected for three years and can’t be removed before the expiration of their term.

However, the Special Assistant to the Prime Minister on Media, Iftikhar Durrani, told this correspondent when approached for the official version that the premier is the “competent authority” to liquidate these BoDs under the law.

But Zafar Shah disputed Durrani's claim and said it was not true, and there was no such provision in the law--the Companies Act--that governs the BoDs of the public listed companies.

There were only four ways cause a vacancy in such BoD, he explained. One is that a BoD member himself resigns. Another is that he passes away or becomes unable mentally or physically to perform his functions. The third way is that his tenure comes to an end. Lastly, if 75pc of the directors formally approve removal of a member.

The ex-minister said that the BoDs were run under the Companies Act. The directors are elected under this law and can be ousted only by invoking this act. He said if the government wants to get rid of a member, it can “request” 75pc of BoDs to take a decision to the effect, but it can’t force the board to do so as the law doesn’t provide for such recourse.

Zafar Shah said that the prime minister has no authority to pass a decree dissolving the boards of the Sui Southern and Sui Northern. He believed that Imran Khan was not properly advised in this connection; otherwise, the premier would not have taken this decision.

As the caretaker petroleum minister, he said, the issue of dismissing these boards came up as per the “wave” of transfers and postings during the interim period to hold the general elections freely and fairly. “We examined the law and concluded that the government has no power to do so.”

Zafar Shah said that it was also then decided that the Election Commission of Pakistan (ECP), which had wide powers at the time, too, did not have any authority to wind up these BoDs or remove any of its member.

It was officially stated that the final decision about dissolution of the two BoDs would be taken after the approval from the federal cabinet in its next meeting. As per rules and procedures, such approval is mandatory for taking such decisions, it was further said.

The Minister for Energy (Petroleum Division), Ghulam Sarwar Khan, recently announced that the government has decided to reconstitute BoDs of state-run oil and gas companies, including change of their chairmen and CEOs in the next 100 days in a bid to purge them of politically motivated appointments.

“There are 14 companies under my ministry that are registered under the Companies Act. The previous government reconstituted their boards in 2017, making political appointments,” he claimed.