The Petroleum Division is planning to seek another extension in the tenure of Sui Southern Gas Company’s (SSGC) board of directors.
The tenure of SSGC board expired on October 28, 2022. Though five months have passed, the ministry has failed to nominate new directors.
However, the ministry requested the Securities and Exchange Commission of Pakistan (SECP) for a three-month extension in the board’s term, which was granted as a one-time exception under the prevailing SECP rules.
The Ministry of Energy (Petroleum Division) could not nominate new directors by January 26, 2023 and approached the SECP again for an extension of 90 days.
Although there was no provision for such an extension in the SECP rules, it was “illegally” granted after repeated requests by the Ministry of Petroleum and Natural Resources.
The second extension in the board’s tenure will expire on April 26, 2023. However, SSGC needs to publish the names of contesting/nominated directors by April 5 to comply with the SECP rules.
Sources said that the list of new directors had not been finalised yet and the Ministry of Petroleum was planning to seek yet another extension in the board’s term.
It may be noted that SSGC’s performance during the tenure of the current technically defunct board had been worse in terms of line losses, which stood at 18.5% as of February 2023. The state-owned gas utility also has a negative equity of Rs28 billion, turning it into a sick unit.
The company, which was once known as the best public utility in the region, is now unable to provide uninterrupted gas supply to its consumers and is continuously incurring losses on account of unaccounted for gas (UFG) – a term used for gas theft and leakages – for the past three years.
It has been learnt that the two government-nominated directors and the company secretary have resigned from the board/ company because of illegal directives and irregularities in the board’s affairs, such as failure to record board proceedings, changing of minutes and interference in management’s affairs, rendering the management paralysed.
Sources revealed that the harsh and unfair policies of the company board had caused frustration among employees and officers equally, resulting in sit-ins and court cases.
Stakeholders associated with SSGC are now looking towards the coalition government, expecting it to take the right steps and appoint professionally competent directors to steer the company out of the quagmire.
When contacted, State Minister for Petroleum Musadik Malik and secretary petroleum did not respond to the request for comment.
An SECP spokesperson told The Express Tribune “Section 158(2) of the Companies Act 2017 empowers the registrar to grant extension for holding a general meeting in which elections are to be held by a company.”
In terms of Section 158(3) of the Act, the registrar may, upon expiry of the extended time period, may direct the company to hold the meeting for the election of directors, either upon its own motion or upon representation of the members holding not less than one-tenth of the total voting powers or one-tenth of the total members of the company, the spokesperson added.
Published in The Express Tribune, April 1st, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.