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January 19, 2020

Companies’ case

Editorial

 
January 19, 2020

So, finally it has been done. The Supreme Court has sealed the fate of 56 companies by saying that ‘no one among these 56 companies will stay’. This decision came during the hearing of an application filed by the general manager of Lahore Transport Company Private Limited (LTCPL) that was formed by the Punjab government under the Companies Act 2017. But to understand this, we must look at another case that has been going on for around two years now – ever since the SC took suo-motu notice about companies that were formed during the previous Punjab government headed by Shahbaz Sharif. The case started in early 2018 when a two-member bench comprising then CJ Saqib Nisar and Justice Umar Ata Bandial asked NAB to collect the details of appointments in the newly formed public sector companies. There were around 70 such companies but initially 56 companies became the focus of investigation. The heads of these companies and other employees were hired on salaries that according to the then CJ were not justified.

So in April 2018, CJ Saqib Nisar directed all the public servants working as heads of public-sector companies to return the money received by them over and above their regular salaries to the government by the end of May 2018. The thinking was that these companies were constituted to dole out heavy reward to some favourite government servants. The court also ordered that the retrieved money be deposited in the account established for the ‘dam fund’. In the first week of June 2018, former Punjab CM Shahbaz Sharif was reprimanded by the then CJ for not being able to satisfy the court about the need for such companies and the appointment on hefty salaries. Shahbaz’s response that the companies were created to improve the governance in Punjab and that the appointments were made on merit by selection committees was not accepted by the court.

In July 2018, the court once again ordered the recovery of salaries within ten days to be deposited in the dam fund. In August 2018, the auditor general of Pakistan (AGP) report was submitted to the court highlighting irregularities in the 56 companies. In November 2018, NAB informed the court that the heads of 45 companies had agreed to return the excess salaries they had received. After the PTI government assumed power, it formed a review committee headed by Punjab CM Usman Buzdar to decide the fate of the 56 companies. After the retirement of CJ Saqib Nisar the case lingered on and in May 2019 the new Punjab government announced that 16 companies set up by the PML-N government had been closed down. In June 2019, the Punjab government declared that it had decided to shut down 35 of the 56 companies.

In October 2019, the case was resumed after a hiatus by a new three-justice bench. Now in the latest development, in another related case in which Lahore Transport Company Private Limited deputy general manager had filed an application seeking his reinstatement, the current CJ has observed that all 56 companies will be closed down. This has come as a shock to employees of these companies as hundreds of people will be affected by the closure of these companies. Though the law will take its course, may we humbly request that the matter be considered keeping in mind an ever-increasing inflation and unemployment in the country.