ISLAMABAD: A recent review by the Ministry of Finance has raised alarms over the financial health of several state-owned enterprises (SOEs) in Pakistan, warning that many are on the brink of bankruptcy, according to a news report.Â
The assessment reveals that these entities are operating under financial strain, and without urgent reforms, bankruptcy may be inevitable. The report stresses the need for immediate improvements in internal controls, governance structures, and risk management systems within these SOEs. It points to the lack of effective oversight, which has led to issues such as financial misreporting, rising operational costs, and suspected fraudulent activities.
The ministry’s review notes that the financial stability of these entities is far below acceptable levels, with many institutions in a state of collapse. It further criticizes the inactivity and dysfunctionality of many boards of directors, highlighting their failure to enforce strategic decisions or maintain accountability.
Governance failures are widespread, with audit committees in many SOEs either inactive or unable to challenge decisions. Risk management systems, where they exist, are either inadequate or disconnected from day-to-day operations. These weaknesses have allowed poor financial practices to persist, worsening instability and eroding public trust in state-run organizations.
The situation is particularly concerning in the energy and commercial sectors, where weak oversight and complex operations have created opportunities for manipulation and fraud.
The ministry’s findings have prompted a call for urgent reform, with policymakers and regulators being urged to overhaul the governance of SOEs before the financial challenges escalate into a broader institutional crisis.
