The Board of Directors (BoD) of Sui Northern Gas Pipelines Limited (SNGPL) has disallowed the managing director (MD) from exercising any powers as top man of the company, Profit learnt on Sunday.
According to sources in the petroleum division, the BoD of SNGPL, in its 600th meeting held on Sunday (February 18, 2023), has passed a resolution that Ali Javed Hamdani shall cease the use of his powers as MD with immediate effect. This is till such time that the board and/or committee appointed by it, expeditiously completes its review of the matters discussed in the meeting, and the board takes a decision with respect to the future of Hamdani.
Last month, on January 22, 2023, Profit by Pakistan Today had reported that the government is likely to ask Hamdani to step down. Despite repeated efforts to speak to Hamdani and get his comment on the matter, there was no response.
The board has now revoked the Power of Attorney in his favour till further orders and has delegated it instead to Amer Tufail, Deputy Managing Director (Services), as he is the senior most officer with immediate effect. Tufail will now exercise all powers/functions conferred according to the law. Pursuant to the decision of the SNGPL board, all employees were directed on February 18, 2023, to act accordingly in letter and spirit, said sources. They added that acting MD Tufail has also directed all employees to ensure smooth operations and continuity of the business through their respective heads.
It is to be noted that the board has constituted a Special Sub-Committee of BoDs comprising Syed Akhtar Ali and Dr Sohail Razi Khan to investigate the conduct of Hamdani, including purported instances of financial irregularities, particularly relating to the Uch Compression Project. The submission of their report is within the next 15 working days.
Tufail has had experience in being acting MD before. In 2015, after the retirement of Uzma Adil Khan, he became acting MD SNGPL. He had also served the company as acting MD from January 2018, to April 2018, and October 2022 to December 2022. He is a chartered accountant by profession from the Institute of Chartered Accountants of Pakistan. He previously also served as Chief Financial Officer of the company. Tufail has been credited for being instrumental in successfully transforming SNGPL into a modern IT-enabled organisation. Prior to joining SNGPL, he worked for national and multinational organisations in Pakistan and abroad including in key multilateral donor agencies; he has more than 25 years of experience in a large variety of disciplines.
Sources earlier told the paper that PM Shehbaz Sharif was not happy with the MDs over their ‘poor performance’ and had taken serious notice of MDs of SNGPL and SSGCL. According to him, they had failed to achieve assigned targets and to control gas losses worth billions of rupees. Sources also said that after receiving the required explanation from the two MDs, it was feared that a process to remove both MDs (Hamdani and Imran Mainiar of SSGCL) from their positions through their respective BoDs will be initiated.
Besides these colossal losses, their ‘poor performance’ deprived Balochistan from the supply of gas in the winter season, making the premier unhappy. Sources added that “Both sui companies…fell short of UfG reduction targets in 2019, 2020, 2021 and 2022.”
Sources further said that the petroleum division had earlier shared data related to loss cutting targets of the two gas companies with the PM’s office on December 20, 2022. And, the PMO observed that SSGCL had achieved only seven out of 10 reported indicators, and fell short of the UfG reduction target by nearly 50% in the financial year (FY) 2019-20. The SSGC achieved only three out of 10 reported indicators and its UfG reduction target was surpassed by 25% in FY 2020-21.
Furthermore, in FY 2021-2022, the SSGCL’s UfG loss instead of registering any decline, increased. Similar data on SNGPL does not indicate the achievement of targets, due to which those made on the reported 13 indicators cannot be compared to any benchmark, sources explained, quoting observations of the PMO over data submitted by the petroleum division.
The petroleum division had furnished data on 10 and 13 indicators of SSGCL and SNGPL respectively against a total of 30 Key Monitoring Indicators (KMIs).
Sources also said that the PMO advised the petroleum division to furnish the final figures which should be duly verified by the Oil and Gas Regulatory Authority (OGRA). It just be added that OGRA had conducted a study in order to find the reasons behind the gas sector’s dismal losses and to give recommendations to help curb these.
It was also learnt that both companies had asked OGRA to approve 7.6% UfG for them. But, OGRA had approved only 5% UfG and linked the remaining 2.6% UfG with 30 KMIs. So far, both sui gas utilities failed to meet the 30 KMIs and so OGRA allowed only 1.6% UfG for them.
