CCoSOEs Advocates Streamlined Appointments for State-Owned Enterprises

The Cabinet Committee on State-Owned Enterprises (CCoSOEs) has suggested a review and simplification of the appointment process for board members in state-owned enterprises. This is aimed at preventing administrative delays and maintaining operational continuity.

The committee convened on Wednesday, presided over by Federal Minister for Finance and Revenue Muhammad Aurangzeb, who joined the session remotely. The committee reviewed and sanctioned a proposal from the Ministry of Commerce to fill vacant positions on the Board of the Trading Corporation of Pakistan (TCP).

The committee supported the nomination of Aasim Aziz Siddiqi as Chairman of the Board of TCP, Ayesha Aziz as Independent Director, and Shoaib Mir Memon as Chairman of the Board of Pakistan Reinsurance Company Limited (PRCL).

According to the Finance Division’s recent bi-annual report on federal SOEs for fiscal year 2025 (covering July 2024 to December 2024), TCP’s equity base remains fragile at Rs111.5 billion, despite total assets increasing to Rs429 billion, including Rs225 billion in government receivables.

The report indicated that while the significant increase in surplus from asset revaluation, currently at Rs86.3 billion, provides temporary balance sheet strength, it is non-cash and non-operational. This capital structure implies that the actual equity available for leveraging is considerably lower, and any unfavorable changes in receivables or disputes could rapidly diminish operational capacity.

Moreover, pending litigation and un-provided tax contingencies amounting to Rs12.1 billion further escalate risks, necessitating a business plan adjustment to mitigate legal risks. The receivables situation raises concerns about the business plan, as Rs8.49 billion in trade debts from government entities remain unconfirmed for over six years, and Rs17.07 billion (inclusive of mark-up) is tied up in disputes with sugar mills, now under investigation by NAB.

This highlights structural weaknesses in TCP’s receivables management, stemming from inadequate contract enforcement and insufficient financial oversight. The report recommends a robust receivables collection strategy as part of the business plan, advocating for strong government support for timely recoveries and a phased write-off or provisioning approach.

The committee further recommended that relevant ministries, including the Finance Division, should assess and streamline the appointment process for board positions in state-owned enterprises. It was suggested that the process be initiated well before the incumbents’ retirement to prevent administrative delays and ensure seamless continuity.

The committee also approved the appointment of three ex-officio members to the Board of Directors of Postal Life Insurance Company Ltd, as proposed by the Ministry of Communications.

The ministry has been instructed to submit a summary for the selection of the chairman of the board from the existing four independent directors, to make the Board operational and facilitate decisive progress on the entity’s restructuring and potential winding-up, as it remains on the privatization list.

In addition, the cabinet committee assessed a proposal from the Ministry of Industries and Production concerning the restructuring of the Board of Directors of the Small and Medium Enterprises Development Authority (SMEDA).

The Committee endorsed a panel of six private sector members for appointment as independent directors, including Saif Ali Rastgar (Punjab), Mashood Khan (Sindh), Osman Saifullah Khan (Khyber Pakhtunkhwa), Israr Khan Kakar (Balochistan), Aasia Saail Khan (representing women), and Dr Syed Zahoor Hassan (development sector).

The meeting concluded with a presentation by the Ministry of Science and Technology on the restructuring and renaming of the Scientific and Technological Development Corporation of Pakistan as the Indigenous Research and Development Agency (IRADA), consistent with a prior decision by the committee.

The chair acknowledged the reform initiative, emphasizing that the objective of the restructuring was to enhance the organization’s effectiveness. The chair expressed optimism that IRADA would fulfill its intended mandate and make significant contributions to the national innovation ecosystem.

Attendees included Federal Minister for Housing and Works Mian Riaz Hussain Pirzada, Federal Minister for Commerce Jam Kamal Khan, the Chairman of SECP, federal secretaries, and senior officials from relevant ministries and government departments.