CEO’s appointment on deputation rejected
MUSHTAQ GHUMMAN
ISLAMABAD: The federal cabinet has reportedly rejected appointment of Director General, Ministry of Commerce Muhammad Ashraf as the Chief Executive Officer (CEO) of Pakistan Horticulture Devel-opment & Export Company (PHDEC) on deputation, well informed sources told Business Recorder. Secretary to Prime Minister, Fawad Hasan Fawad, sources said, pointed out during the cabinet meeting that PHDEC rules do not provide for appointment of CEO on deputation, the sources said, adding the Prime Minister agreed and directed Commerce Division to look into the proposal in light of PHDEC rules. Commerce Minister Engineer Khurram Dastgir Khan had intended to dissolve the organization regarded as waste of national resources. He kept the company’s file for several months in his custody at a time when the former Secretary Commerce Shahzad Arbab was bent upon reviving it.
Last year, Commerce Ministry formally informed the National Assembly Standing Committee that the Commerce Ministry had decided to wind up the company due to rampant corruption.
On August 21, 2017, the acting CEO, Muhammad Ashraf had briefed the audit committee of PHDEC that Commerce Ministry vehemently followed up the matter with the Ministry of Finance and finally got the approval of Rs 950 million as PHDEC-Endowment Fund of which Rs 500 million was released on June 30, 2017 and the remaining will be released in financial year 2017-18 after approval of draft financial procedures which have already been submitted to the Ministry of Finance for concurrence.
However, on January 24, 2018, Secretary EDF, an officer of Commerce Ministry, placed the proposal of PHDEC for financial support of Rs 104 million comprising of administrative expenses of Rs 55.25 million and activity-based budget of Rs 48.7 million to be financed from EDF.
According to sources, the EDB Board criticised the PHDEC management for seeking funds, saying that after obtaining funds under STPF, the company should not have looked towards EDF. However, after a detailed discussion, the Board approved Rs 30.25 million for salaries for 2017-18 with a dissenting vote by Secretary TDAP.
Commerce Division, in its proposal for the cabinet said that Strategic Trade Policy Framework 2015-18 identifies horticulture sector as one of the four sectors, which due to low gestation period, has high potential for export enhancement. Restructuring and strengthening of PHDEC to restore its professional character has been envisioned as a vital institutional support to the sector, which requires extensive hand-holding.
Commerce Division has identified three sequential steps for revitalization of the company: (i) reconstitution of Board of Directors comprising stakeholders and professionals; (ii) appointment of a dynamic Chief Executive Officer through open competition/ merit; (iii) replacing the non-performing employees amongst all ranks of the company with professionals; and (iv) creation of Endowment Fund for providing financial sustainability to the organisation.
Accordingly, with the approval of the Prime Minister, the Board of Directors was reconstituted on July 2015, 2015. An Endowment Fund has been created with an initial release of Rs 500 million. The new Board, in accordance with the Public Sector Companies (appointment of Chief Executive) Guidelines, 2015, constituted a Nomination Committee for selection of the new CEO. Advertisement was placed in the media as well as on website of PPRA and PHEDC. The Nomination Committee short-listed five out of total 69 applicants. The five short-listed candidates were interviewed by the Board. The candidates were required to make presentations regarding their strategic vision to transform PHDEC into a vibrant sectoral organisation.
Keeping in view the company’s present status and requirements, candidates’ experiences and vision, the Board recommended following three candidates for the position of CEO, PHDEC for a period of three years in order of merit: (i) Muhammad Ashraf- DG Commerce and incumbent CEO PHDEC – (appointment on deputation); (ii) Assad Khalid- financial controlled Asian Food Industry (MP-1); and (iii) Kashif Jamshed- National Consultant, Asian Development Bank (MP-1).
The most interesting part of the proposal states: “the Board was of the unanimous view in terms of professional experience, clarity of strategic vision to turn around the organisation, the candidate at serial number 1 (incumbent acting CEO) was significantly ahead of other candidates”.
The proposal submitted to the Cabinet further states that in pursuance of the section 186(4) of the Companies Act, 2017 the government has the power to nominate the CEO in this case.
The sources said the incumbent CEO is not eligible for the position of permanent CEO unless the rules are amended to have a provision as is the case with many public sector companies.
When contacted Secretary Commerce, Younus Dagha said that Law Ministry will be consulted on this issue and their advice will be followed.
The newspaper also sent a message to incumbent acting CEO who is also Director General Trade Policy (TP) in Commerce Division for comments on the cabinet decision. He, however, did not reply till the filing of the story.
