- Cutting shareholders’ voice
The Sui Northern Gas Pipelines Limited is trying to use the specious cover of expense-cutting to reduce the number of members of the Board of Directors to be elected from three to one. The BoD has decided to reduce its number from 14 to 12. At present, it comprises three members elected by private shareholders, two by the National Investment Trust, and eight nominated by government. As the government and NIT are not about to give up any directorships, the cut will come from the private shareholders’ representatives. Interestingly, though the saving of two directors’ salaries is of such concern, there has been no action on the government’s representatives, who enjoy the full perks of their offices, drawing expenses for attending BoD meeting.
The government has already got more representation than it reserves, as it only has 58 percent of the shares of the company, which was once wholly owned by the government, but which had been partially disinvested on the way to complete privatization. However, since shareholders’ representatives came onto the BoD, it became difficult for bureaucrats to continue treating the company as a personal fiefdom, and a cash cow to be milked, no matter what harm was caused to the owner, the Government of Pakistan, and thus its people. Instead of inducting more members elected by the shareholders, in preparation for the time when the government is unrepresented in the BoD of a fully privatized company, bureaucrats have ensured that dissenting voices which object to their shenanigans are stilled, or at the very least reduced.
The government should notice that this is not just an attempt to control one company, but roll back the entire privatization policy of the government. The government should remember two things. First, that the privatization policy is part of the economic consensus of all parties, and it is a pillar of the various agreements reached with international financial institutions. Second, that apart from Sui Northern, it has several holdings which it has similarly disinvested. If Sui Northern becomes a precedent, others will follow. And that the government cannot afford, no matter how much heartburn this causes bureaucrats wishing for cushy directorships.
