ISLAMABAD: The government has instructed all state-owned enterprises (SOEs) to disclose their assets and beneficially owned investments, following concerns over weak financial transparency and lack of accountability in these entities.
The directive comes after the Central Monitoring Unit (CMU), a special body overseeing public sector accountability, identified serious lapses in SOE management and board disclosures. The CMU found that most boards and management officials had failed to declare their assets, violating an Act of Parliament.
A Finance Ministry memorandum, issued to all SOE boards through their respective ministries, emphasized mandatory compliance with Section 30(1) of the State-Owned Enterprises (Governance and Operations) Act, 2023. “As part of ongoing efforts to enhance governance and transparency within SOEs, it is imperative that all entities comply with the provisions of the Act,” the document stated.
The directive coincides with a proposed amendment to the Civil Servants Act, which would require public disclosure of assets by members of 12 occupational groups. However, this law would cover only 25,000 individuals, limiting its overall impact.
The Finance Ministry’s crackdown follows reports of federal ministers and contractual employees holding SOE board positions in violation of governance laws. A contractual employee from the Finance Ministry is currently on the Privatisation Commission board, while a federal minister remains on the Pak-Arab Refinery Limited (PARCO) board, despite legal restrictions.
Despite enforcing compliance on SOEs, the Finance Ministry has yet to apply the same standards to its own employees. The law states, “Directors and senior management officers of an SOE must submit their assets and beneficially held investments to the board annually and report any changes within two weeks.”
The State-Owned Enterprises (Ownership and Management) Policy, 2023, further reinforces financial transparency, requiring SOEs to align governance mechanisms with disclosure rules. The Finance Ministry has instructed all boards and management to provide updates on implementation progress.
The International Monetary Fund (IMF) has also urged Pakistan to implement risk-based verification of civil servant asset disclosures, impose penalties for non-compliance, and investigate discrepancies between declared assets and income sources. Discussions have taken place about referring such cases to the National Accountability Bureau (NAB).
The Pakistan Revenue Automation Limited (PRAL) board—key to the government’s Rs. 3.7 billion tax IT modernization plan—has begun operations without disclosing conflicts of interest or adopting a code of conduct, a legal requirement under the SOE Act and SOE policy. Non-disclosure of conflicts violates legal frameworks developed with international financial institutions to improve governance in state-run entities.
According to the CMU’s Corporate Governance report, governance failures in oil and gas SOEs include delayed financial reporting, weak risk management, and inefficient board practices, which erode public trust and undermine national energy security. The report recommended a merit-based appointment system to strengthen decision-making.
Similarly, power sector SOEs face operational inefficiencies, financial losses, weak financial management, and underperforming boards, which have worsened circular debt and energy supply challenges. The CMU highlighted issues in LESCO, HESCO, TESCO, and GEPCO, where board members lack expertise in energy management. The report urged a skill-based selection process to improve governance.
For Development Financial Institutions (DFIs), the CMU advised that board appointments be based on professional expertise rather than political affiliations. However, the Finance Ministry is currently appointing board members in violation of policies and the law, with contractual employees and bureaucrats being placed in independent director roles.
The CMU also noted persistent political interference in Pakistan International Airlines (PIA), which has hurt its operational efficiency and profitability. “Ensuring independent board appointments based on merit rather than political considerations is crucial to improving governance,” the report stated.
With governance reforms now under increased scrutiny, SOEs face rising pressure to comply with transparency measures, as the government moves to tighten financial oversight and restore credibility in state-owned entities.
