Security Paper and the case of the delayed elections

The offices of Security Paper Limited. 13th of February 2024. It is an unexpectedly chilly February day in Karachi as one can hear the faint train whistle from the Malir Cantonment Railway Station just a stone throw away from the building. The 8th Extraordinary Meeting (EOGM) of the shareholders has been called and on the agenda is the election of four directors. The meeting begins on schedule at 9:00 AM and, within a few minutes, the Chairman of its board slams the gavel down and adjourns the meeting. Thus the theater continues into another act of a play that has gone on too long.

The election of a board of directors for Security Papers Limited, the semi-public semi-government company that manufactures the paper on which banknotes among other things are printed, has become a bone of contention. On one end is the company which feels that it is publicly listed and its board of directors should be elected based on the regulations governing them. On the other end are some minority shareholders who feel that the company should be considered a public sector company and should adhere to the rules that are applicable to them. 

The impact of this definition falls on who is elected as a board member of the company and there is a tussle between the two sides as to who is eligible for elections. This is the story of the fact that “independence of a director” lies in the eye of the beholder.