SECP concludes inquiry into Pakistan Reinsurance Company CEO’s controversial appointment, salary hikes

The Securities and Exchange Commission of Pakistan (SECP) has completed its inquiry into the appointment and salary enhancements of a former acting CEO of Pakistan Reinsurance Company Limited (PRCL), The News reported.  

The SECP’s findings revealed that the PRCL board violated multiple laws and regulations in its actions.

The SECP has decided to take action against the PRCL board and has referred the matter regarding the revision of the CEO’s compensation package to the Ministry of Commerce. 

According to a letter sent to the ministry on October 14, the SECP noted that the board failed to obtain approval from the federal government or the commission before appointing the individual as acting CEO. The inquiry also found that the CEO lacked the required experience at the time of his appointment.

Additionally, the board approved an excessive compensation package beyond what was sanctioned by the federal government under the Special Professional Pay Scale-III (SPPS-III). 

The SECP pointed out that this action disregarded several legal provisions, including those outlined in the Companies Act 2017, the Insurance Ordinance 2000, and other related regulations. The commission has recommended adjudication proceedings against the individuals involved and the PRCL itself.

The SECP further highlighted that the PRCL board, during its 178th meeting held on October 2, 2023, revised the CEO’s compensation package retrospectively, aligning it with the newly introduced State-Owned Enterprises (SOE) Act of 2023. 

This revision, the SECP said, violated Section 36(3) of the SOE Act, which prohibits retrospective application of the law. Since the SOE Act does not fall under the SECP’s jurisdiction, the matter has been forwarded to the Ministry of Commerce for consideration and potential action.

The inquiry was initiated after a media report revealed that the same CEO had received a total of Rs355 million in salary and perks over 32 months, with approval from the PRCL board, before moving to head another state-owned enterprise.