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February 20, 2020

PM’s startup programme gets bad start

Top Story

February 20, 2020

ISLAMABAD: Prime Minister Imran Khan’s recently inaugurated Startup programme has attracted controversies even before it commences its operations as the Ministry of Information Technology (MOIT) and its subsidiary organisation’s Board of Directors (BoD) have locked horns on the appointment of Chief Executive Officer (CEO) of Ignite.

On February 12, Prime Minister Imran Khan inaugurated National Incubation Centre (NIC) startup programme. The NIC is being run by Ignite, which is a national Information and Communication Technology (ICT) Research and Development (R&D) company incorporated under Section 42 of the Companies Act 2017 with its independent board of directors.

The MOIT on December 12, 2019 issued a notification to give acting CEO charge to Syed Junaid Imam, Member (IT) while the BoD was still deliberating the appointment of acting CEO as the post was vacant. The independent directors on the BoD protested this move as they believe that government has bypassed the board’s approval for such an important post.

A well-placed source privy to the development informed The News that the independent directors of Ignite’s BoD complained to the government that the said notification of MOIT has no legal basis under Companies Act, 2017, Public Sector Companies (Corporate Governance Rules), 2013, Articles of Association of Ignite, and Public Sector Companies (Appointment of Chief Executive) Regulations, 2019. “As majority of the directors did not agree to give acting CEO charge to Member (IT), the independent directors protested terming the notification beyond its legitimate jurisdiction, undermining the sanctity of the BoD and in violation of all prevailing laws, rules and regulations”, commented the source.

“The MOIT wants to exercise its direct control over Ignite through its Member (IT) as acting CEO of company is bypassing the BOD so that it can fund projects of its own choice and appoint handpicked persons on key positions,” informed the source.

MOIT has also halted the process of hiring of new CEO by the BoD vide its letter of Jan 10, 2020 citing concerns of lack of transparency and merit in hiring process, said the source adding that the Ignite in its letter of Jan 27, 2020 with approval of BoD chairman informed MOIT that the hiring process was being conducted in accordance with SECP Rules and merit.

It is pertinent to mention here that unlike government organisations funded by taxpayers’ money, Ignite is funded by contribution @ 0.5 percent of annual revenues of licenced telecom operators to promote indigenous R&D in ICT. BoD of Ignite has representation of government whereas nominees of academia and telecom operators join as independent directors. The NICs were launched by Ignite three years back under previous government.

When contacted Shoaib Ahmad Siddiqui, Federal Secretary Information Technology & Telecommunication said the board members might have said this due to lack of knowledge. There were serious issues in the process of appointment of Ignite CEO and the government could not sit as silent spectator.

“Under the Companies Act, the government has to take the decision for its public sector company. This is not a charity being contributed by the private companies rather tax, which is being collected from these telecom companies for this fund. The money came from the government through State Bank of Pakistan. Although the private companies give their nominations but it is the government, which has to appoint the directors for BoD”, commented Mr Siddiqui.

The government wants to appoint the permanent CEO of Ignite as soon as possible and hopefully, the process will be finalised soon. According to Mr Siddiqui, the company has already delayed the programme and it was restricting the competition and transparency of startup programme. Then they have to reverse this programme, as initially the website was restricted. There were many complaints against the company, which are on the record.

The ministry had to take the action and appoint a caretaker CEO because it was getting too late and government could not sit as a spectator in this whole scenario. The company’s BoD should proceed according to the rules and regulations for the appointment of permanent CEO.

“Any board member is welcome to come and meet me if they have any reservations. If someone has objections then they should come forward instead of hiding behind the curtains. This is not a private limited company rather a public sector company and the government has to act whenever it feels the need. The government is answerable on behalf of Ignite not the private companies. Therefore, things should be transparent”, commented the federal secretary.