AHMAD AHMADANI
Prime Minister Nawaz Sharif has obtained necessary authority to remove managing director/chief executive officer of a public listed company especially after the introduction of Companies Ordinance 2016 in the country.
The official document available with this scribe disclosed that the premier has got complete hold on public listed companies with the promulgation of Companies Ordinance, 2016 in the country. A new clause has been made a part of the ordinance to empower the premier regarding the removal of a top man of any public listed company. And, with effect to this ordinance, the PM has become able to remove MD/CEO of almost 30 public listed companies without getting approval from the company’s board which was necessary in the past.
It is to note here that the board by resolutions passed that not less than three-fourth of the total number of directors for the time being, or the company by a special resolution, may remove a chief executive before the termination of his term of office notwithstanding anything contained in the articles or any agreement by the government under sections 186 and 187. However, the government has made its changes and added new clause in the ordinance to empower the premier.
According to Companies Ordinance 2016, ‘Nothing contained in sub-section (1) shall apply to a person nominated as chief executive by the government under section 186 & 187’.
The sources said that Finance Minister Senator Ishaq Dar has played a key role in the inclusion of new clause in the ordinance. They said the inclusion of new clause in the ordinance was apparently to bound the top man of a public listed company to obey the orders of the Pakistan Muslim League-Nawaz government and deprive the company’s board to exercise such power.
Earlier, PM Nawaz sacked Arif Hameed, former managing director of Sui Northern Gas Pipeline Company Limited (SNGPL) allegedly over non-cooperation in finalizing tripartite agreement between PSO, SSGCL and SNGPL for smooth LNG transaction. But, Hmaeed refused to surrender before the termination of office tenure. He obtained stay order and was reinstated by the Lahore High Court as managing director of a gas utility while the government failed to topple the top man of SNGPL. The present Petroleum secretary made utmost efforts to convince board of directors (BoDs) of the SNGPL. However, the BoDs of gas utility refused to subscribe to the stand of the government and the government faced the music only because it could not convince majority of the members of the BoD. Later, Arif Hameed, while sensing the mood of the government tabled his resignation in the BoDs meeting.
The president had promulgated the Companies Ordinance, 2016, on November 11, 2016, in order to replace the Companies Ordinance, 1984. The Companies Ordinance, 2016, contains provisions for simplifying the procedure for incorporation of companies, enabling maximum use of technology, conversion of physical shares into book-entry form in unlisted companies, and encouraging paperless environment at all levels. In order to ensure maximum participation of members in the decision-making the process of the company, the Companies Ordinance, 2016, encourages the use of modern electronic means of communication.
