LAHORE: Today, the Honourable Mrs. Justice Ayesha A. Malik of the Lahore High Court, whilst taking up a writ petition filed by Mr. Waseem Majid Malik, to challenge certain illegalities and irregularities committed by the Federal Government and SNGPL leading up to the elections to the Board of Directors of the latter – which were to be held tomorrow, the 23rd of June, 2020 – issued a restraining order against the conducting of such elections.
The Petitioner’s counsel, Saad Amir, Advocate, argued that the Federal Government had adopted a practice of “nominating persons to contest elections” to the Board, which had no basis in law, and which the Lahore High Court had itself referred to as “irregular” – in a recent judgment also authored by Justice Ayesha A. Malik – on account of the fact that it does not differentiate between persons who are actually nominated by the Federal Government to serve as its representative directors on the Board, and those directors who contest elections and are appointed on the basis of votes cast by the shareholders.
Counsel for the Petitioner submitted that in spite of the practice being irregular, the Federal Government was again relying on it in the upcoming elections; which testified to the fact that the Federal Government was consciously employing it, with mala fide intentions, to pack the Board of SNGPL, and attempt to deprive private minority shareholders of their lawful representation on the Board.
Mr. Saad Amir for the Petitioner further submitted that the Companies Act, 2017 made it clear that in case the Federal Government did not opt to nominate directors to the Board (in accordance with section 165), then any and all contestants for these elections would need to meet all eligibility criteria listed in the law, including the requirement that they be members of SNGPL in their own right. Given that it appeared from the notice of election advertised under section 159(4) of the Companies Act, that all eleven (11) seats on the Board were up for open elections, counsel for the Petitioner submitted that all contestants (duly vetted by SNGPL) had to be members of the Company.
However, he submitted that at least six (6) persons “nominated for elections” by the Federal Government through a Cabinet-approved Summary, were in fact not members of the Company, and hence, were barred by law from contesting the upcoming elections.
It was submitted that the presence of these candidates prejudiced the rights of the Petitioner – who was also contesting these elections as a candidate. – and furthermore, without confirmation as to whether the Federal Government was in fact directly nominating directors to the Board or not – the elections could not go ahead. It was submitted that as a prerequisite for conducting elections, the shareholders had to be informed as to how many directors were in fact being elected.
It was submitted by counsel for the Petitioner that in light of the glaring omissions and irregularities committed, any purported election would be illegal, and would amount to a futile exercise.
After patiently hearing the Petitioner counsel’s arguments, the Learned Judge inquired as to whether any counsel for the respondents was present on a “watching brief”; at which Raza Qureshi, Advocate, appeared on behalf of SNGPL. The Learned Judge inquired as to how many directors the Federal Government would be nominating to the Board of SNGPL (under section 165 of the Companies Act).
Upon being informed by Advocate Qureshi that persons had been “nominated to contest” by the Federal Government, the Learned Judge questioned counsel for SNGPL as to how such persons could contest elections under law?
The Learned Judge proceeded to call for replies to the petition from the respondents, to be filed before the next date of hearing, fixed for 24th June, 2020, and in the meanwhile, restrained the respondents from conducting the elections to the Board of SNGPL until the next date of hearing.
