Following a news report revealing that the CEO of a state-owned enterprise (SOE) amassed over Rs355 million in benefits over 32 months, Prime Minister Shehbaz Sharif has established a high-level committee to review and improve the governance framework of SOEs.
The News reported that the Cabinet Division issued a notification on August 15, assigning the committee the responsibility to assess and streamline the appointment and governance processes of SOE boards to prevent such instances of power abuse.
Concerns have arisen over the misuse of taxpayer money by top management in SOEs for personal gains. An official source highlighted that the SOEs law, amended under IMF advice, is being exploited by management.Â
On August 8, it emerged in print media that the CEO of an SOE affiliated with the economic ministry, who was appointed in 2022 at a fixed salary of Rs500,000, exploited legal loopholes to secure excessive perks. The CEO’s total benefits included Rs56.3 million in fixed bonuses, Rs27.5 million in performance bonuses, Rs52.3 million in self-approved payouts, and Rs58.6 million spent on 23 foreign trips deemed irrelevant to the SOE’s operations.
The report also pointed out that the SOE Act, 2023, which aimed to enhance governance, inadvertently empowered unchecked management and private-sector directors.
The nine-member committee, chaired by the Minister for Establishment, includes representatives from key ministries and private-sector experts. Its tasks include reviewing legal gaps in the SOE Act, expediting board appointments, ensuring transparency in CEO pay, and proposing reforms to prevent abuses of “independent” board powers.
The committee has been tasked with submitting recommendations within three weeks. Official sources have expressed concerns that similar abuses may be occurring in other SOEs across the country.
