ISLAMABAD:
The litigation between shareholders of K-Electric (KE) has created hurdles as the federal government has not been able to appoint new directors on the company board.
At a recent high-level meeting, chaired by Prime Minister Shehbaz Sharif, the cabinet has approved the appointment of a new independent director on the KE board to replace the previously approved board member.
The Power Division informed the meeting that KE was a private corporate entity registered with the Securities and Exchange Commission of Pakistan (SECP).
Pursuant to the share purchase agreement of 2005, the government of Pakistan holds a minority shareholder position in KE with a 24.36% stake, while 66.4% shares are held by ICES Power and 9.24% by other shareholders.
The company’s board of directors consists of 13 members, out of which three are nominated by the government, as per its shareholding, nine are nominated by ICES Power and one by other shareholders.
The Power Division said that as per traditional practice, the government nominated two ex-officio directors and one independent director for the board of KE, a private power utility that provides electricity to the entire Karachi city and some adjoining areas, to represent its shareholding. In that regard, the government announced the last nominations on December 22, 2022.
These nominations comprised Power Division secretary (ex-officio director), Finance Division secretary (ex-officio director) and Nasir Mahmood Khosa (independent director).
The cabinet was informed that after approval from the federal government, those names were conveyed to KE for completion of other formalities in line with the SECP requirements.
However, the nominations could not be finalised due to a stay order granted by the Sindh High Court in a case initiated by Al Jomaih Company of Saudi Arabia against any changes in board composition following litigation in Cayman Islands between shareholders of ICES Power, the main shareholder in KE.
Meanwhile, Nasir Mahmood Khosa indicated that he would not be able to represent the government of Pakistan on the KE board, following which a fresh panel of three independent members was picked and sent to the prime minister for nominating any one of the three suggested names.
The Prime Minister’s Office, through a letter dated July 9, 2024, directed the Power Division to present the panel of candidates in a cabinet meeting for consideration after obtaining comprehensive background of the proposed candidates. The panel comprised Javed Kureishi, Suhail Anwer and Sadia Haroon.
After assessing their background and finding the candidates well-reputed, the cabinet was requested to approve the nomination of any one of them for appointment as the government’s independent director on the KE board by replacing the previously approved director.
The cabinet considered a summary titled “Approval of GoP Nominations on Board of Directors of KE”, submitted by the Power Division, and approved the nomination of Javed Kureishi as the government’s independent director on the KE board in place of the previous director.
When asked for comments, KE said that those nominations had not taken effect due to a stay granted by the Sindh High Court in a case initiated by Al Jomaih of Saudi Arabia and Denham Investment.
“The court passed a restraining order against any changes in the composition of the board of KE,” it added.
Separately, the present government, which sacked the old board of directors of power distribution companies (DISCOs), has appointed new directors of Lahore Electric Supply Company (Lesco) and Faisalabad Electric Supply Company (Fesco).
Omer Farooq Khan has been hired as the chairman of Fesco board. Its independent directors include Zoe Khurshid Khan, Pervaiz Iqbal, Adil Bashir and Amir Zia.
Similarly, the government has appointed Amir Zia as the chairman of Lesco board. Its independent directors comprise Zafar Mahmood, Zoe Khurshid Khan, Asad Shafi and Tahir Basharat Cheema.
