ISLAMABAD: The SECP faces mounting criticism from all sides to drop its proceeding against Reinsurance Company Limited (PRCL) Board of Directors in connection with the controversial Rs355 million compensation package awarded to the company’s former CEO.
While the report of Commerce Minister Jam Kamal Khan formally challenging the SECP’s decision to show cause all concerned has already been published by The News, it is now learnt that the SECP also faces pressure from the Balochistan Assembly in the same case for the same objective — drop the proceedings.
The Balochistan Assembly has formally raised serious objections to the SECP’s move, alleging discriminatory treatment towards PRCL’s ex-CEO, who belongs to the province. The Assembly Secretariat sought a detailed clarification from the SECP, terming an earlier response “unsatisfactory” and accusing the regulator of selective scrutiny.
In a letter issued on the Speaker’s ruling, the Assembly Secretariat asked the SECP to answer 11 specific queries, including why previous acting CEOs were not questioned; that SECP’s 2019 guidance stating that “fit and proper” does not apply to look-after charge, is now being ignored; a disputed letter from a PRCL board member, whose appointment was declared void, appears to be the basis of the action; SECP publicised the notice in the media before conclusion of due process. The assembly has directed the SECP to submit a detailed response within three days.
In an earlier letter to the assembly, the commission maintained it was acting strictly within legal boundaries and without discrimination. It said issuing a show-cause does not imply punitive action and is intended only to seek clarification and allows the board to be heard. SECP emphasized that it operates independently and applies the law uniformly across Pakistan, without regard to political or provincial considerations.
The SECP, in its show cause notice, had alleged that the former PRCL CEO was appointed in violation of the Insurance Ordinance and public-sector governance rules, and was allowed to draw Rs355 million in only 32 months, far exceeding the SPPS-III scale approved by the federal government.
The Board is accused of appointing the CEO without mandatory government concurrence, bypassing “fit and proper” eligibility requirements, providing misleading information on his experience, approving ten bonuses, severance payments, club memberships, recreation leaves, lucrative allowances and home furnishing support and violating multiple provisions of the Companies Act and SOE rules.
SECP had cautioned that penalties could include up to Rs5 million in fines and disqualification for directors for up to five years.
