Chief Executive Officer (CEO), Pakistan Steel Mills (PSM), Major General Muhammad Javed (Retd) has decided to get approval of his appointment and terms and conditions from the Board of Directors (BoD) after the entity was inflicted with about Rs 12 billion financial loss in ten months, sources close to Chairman of the Board told Business Recorder.
PSM Board is scheduled to meet on February 20, 2012 under the chairmanship of Fazal Ullah Qureshi. A couple of months ago, Minister for Production, Anwar Ali Cheema had expressed his dissatisfaction at not achieving the targets contained in the Business Plan by the PSM management and expressed the reservation that in case the management does not taken extraordinary steps to achieve the targets the entire bailout package can go to waste for which PSM management will be solely responsible.
According to sources, Ministry of Production had submitted a summary to the Prime Minister which he approved in principle to segregate the office of the Chief Executive Officer and Chairman, Board of Directors notified it vide MOI&P letter No 1(6)05-Steel(Vol-III) on March 05,2010. As per sections 198 and 199 of the Companies Ordinance 1984, the appointment of CEO is regulated hereinafter in line with BoD decision notified vide Corporate Secretary Memo dated March 19, 2010 and A&P Department Circular February 06, 2012.
Relevant para is reproduced as follows: “The Corporation shall have a Chief Executive appointed in terms of Section 198 and Section 199 of the Companies Ordinance, 1984. The Board of Directors shall appoint any person or one of the Directors who is nominated by the shareholders to be the Chief Executive of the Corporation for a period of maximum 3 years and on expiry of the said period he will retire but shall continue to act till the appointment of his successor”.
Cabinet Secretariat, Establishment Division, Islamabad notified the appointment of Major General Muhammad Javed (Retd) as CEO vide Notification No 1/48/2012-E-6 on April 24,2012. Accordingly, he joined on April 26, 2012. The sources said, in response to MoP OM No 1 (2)2012-PR-Steel-II of September 18, 2012, the Cabinet Secretariat, Establishment Division, Government of Pakistan vide letter No 1/48/2012-E-6 of September 20, 2012 received under MoP letter No 1(2)/2012-Pak Steel-II had conveyed the approval of the complete authority regarding terms and conditions of appointment of Major General Muhammad Javed (Retd), CEO, PSM.
PSM argued that in line with MoP letter No 11 (11)-01/PR-III-Steel of February 10, 2011, that CEO would be nominated as Member of Board of Directors. Accordingly, consequent upon appointment of Major General Muhammad Javed (retired) notified by Cabinet Secretariat, Establishment Division, the BoD in its meeting held on May 25, 2012 elected CEO as Director on Board of Directors.
PSM decided to seek ratification of appointment of CEO after passage of 10 months requesting the Board that the already approved terms & conditions by Cabinet Secretariat, Establishment Division, Government of Pakistan regarding appointment of CEO Pakistan Steel may be endorsed.
Insiders claim that CEO used financial powers during this period of stay in PSM to have the Charter of Demands of CBA approved, whose financial impact is not less than Rs 8 billion, which is an illegal act. They further argue that such action can result in audit paras and the CEO cannot use financial powers without endorsement of his appointment from the Board of Directors.