Pak PM restored with powers to sack heads of public entities

Pakistan Prime Minister Nawaz Sharif has had powers to sack heads of public sector entities (PSE) restored to him without assigning a reason.

Under the Companies Ordinance of 1984, the government or the prime minister did not have the powers to remove a chief executive officer or managing director of a PSE.

The ordinance had ensured that heads of public sector entities took independent commercial decisions in the best interest of the companies.

The heads of the PSU will now be inclined to follow the written or verbal directives of the ministries concerned.

The Dawn quoted sources, as saying that amendments to the law were made following resistance in recent years by some chief executives who had approached high courts against removal orders issued by respective ministries with the approval of the prime minister.

However, the removal orders were set aside by the high courts.

Under the 1984 law, only "the directors of a company by resolution passed by not less than three-fourths of the total number of directors" could remove a chief executive before the expiration of his term of office.

A sub-clause to Section 191 of the Companies Ordinance 2016 promulgated on Nov 11 was added by the government to change the protection available to chief executives.

This sub-clause says that the protections and conditions provided in the sections 186 and 187 shall not apply to a person nominated by the government.

Another new clause said the chief executive would "hold the office during the pleasure of the government".

The government will now be enabled to directly remove chief executives of about 100 public sector companies by the change in the law without requesting or manipulating the boards of directors.

According to the new law, the chief executive of a company can be nominated and appointed by the government where majority of directors are nominated by it and such a nominee will "hold office during the pleasure of the government".

The board or the company at a general meeting or the government in case of a PSE will determine the terms and conditions of appointment of a chief executive.