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    Saturday, 9 June 2018

    Ministry halts hiring of State Bank’s deputy governor

    The finance ministry has halted the process of appointing the State Bank of Pakistan’s (SBP) deputy governor and heads of three joint investment companies, blocking one of the last moves of the PML-N government to make appointments in these institutions on political grounds.
    The process had been stopped during last days of the PML-N term, said sources in the finance ministry.
    The last government had sent a summary to appoint Munir Saleem as deputy governor of the central bank. It also conducted interviews for hiring chief executive officers (CEOs) of Pak-Libya Investment Company, Pak-Kuwait Investment Company and Pak-Brunei Investment Company.
    In spite of the fact that all the three investment companies are facing serious financial issues and recording a steep decline in their profits, the PML-N government lowered the qualification criteria for the CEOs to bachelors’ degree holders.
    The finance secretary confirmed that the process to fill the posts of SBP’s deputy governor and chief executive officers of investment companies had been halted.
    The last government wanted to appoint Saleem who was considered close to a south Punjab-based business tycoon, said sources in the finance ministry. He is currently chief executive of EE Services Private Limited and has also remained associated with defunct KASB Bank and MCB Bank.
    The federal cabinet had approved the name of Saleem, but the notification could not be issued because of the Election Commission of Pakistan’s (ECP) restrictions, said Dr Miftah Ismail, former federal finance minister, while talking to The Express Tribune.
    The Pakistan Muslim League-Nawaz (PML-N) government had earlier appointed Shamsul Hasan as deputy governor of the SBP with effect from December 22, 2017 for a period of three years. He assumed his responsibilities from February 12, 2018. Hasan has served in Silkbank.
    For the central bank hierarchy, Hasan was an outsider and the SBP was reluctant to accept another outsider, said the sources. The other SBP deputy governor is Jameel Ahmad who has a long association with the bank and has served on key senior positions before his appointment as deputy governor.
    During its last few days, the PML-N government also finalised the names for the post of CEO of three joint investment companies, said the sources.
    Former prime minister Shahid Khaqan Abbasi asked the finance secretary to take input of the ECP to know whether the government could fill the posts.
    But after the end of the government’s term, the finance ministry decided to halt this process as well. An overwhelming majority of the candidates who had been called for interview enjoyed the backing of some political personalities.
    But former finance minister Ismail claimed that he had forwarded the names of best candidates among the shortlisted ones. Notifications could not be issued because of the ECP, he said.
    The ECP placed a ban on appointments, transfers and postings with effect from April 1 due to general elections on July 25. However, the planning ministry violated the ban as it hired a macroeconomic consultant during last days of the government.
    Had the last government appointed graduates as heads of these companies, their financial positions could have come under more stress.
    Pak-Kuwait Investment Company, which is relatively in a better financial position, has also recorded a massive reduction in profit. Its after-tax profit stood at Rs1.85 billion for the year ended December 31, 2017 compared to Rs3.45 billion in the previous year, according to its audited financial statement.
    The company attributed the 46% decrease in profit to below-par performance in capital markets, low disbursement of corporate finance, decline in income from associates and higher effective tax rate.
    Pak-Libya company is also facing serious financial problems. Its capital is below the statutory limit prescribed by the SBP. In its audited financial statement, the company noted that the shortfall in the capital was an impediment in the way of its growth. For the year ended December 2017, the company earned a net profit of Rs478 million against Rs1.3 billion in the preceding year.
    Similarly, Pak-Brunei company’s profit declined from Rs962 million to Rs470 million for the year ended December 2017.
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