SSGC Board Faces Delays Despite Multiple Extensions
The board of directors of Sui Southern Gas Company Limited (SSGC) has been operating without a permanent, elected body since October 2022, reflecting one of the most prolonged governance crises in Pakistan’s energy sector.
This is despite the fact that the Petroleum Division had asked the company to appoint a new board of directors. The crisis has also resulted in the appointment of a permanent managing director of the gas utility.SSGC defaults Rs 59b payment
Sources told Tribune that the tussle between PPP and PML-N over the appointment of a new MD had also resulted in a delay in the board of directors of the company. During the previous tenure of PDM, the government had asked its coalition partner, PPP, to appoint a new board of directors.
The government had also sought the names of directors and the chairman of the new board of SSGC, but the process was stalled. Sources said that PPP had not finalized the names of board directors and the chairman, and therefore, the government could not appoint a new chairman and board directors.
Repeated Extensions Beyond SECP Rules
The federal government, through the Petroleum Division, has repeatedly sought extensions for the company’s board from the Securities and Exchange Commission of Pakistan (SECP). While SECP rules allow only a one-time exceptional extension, the government has obtained multiple approvals over the past two years.
Petroleum Division had asked Sui Southern Gas Company (SSGCL) earlier to approach the Securities Exchange Commission of Pakistan (SECP) to seek consent for a third time extension in the tenure of the company board.
The government had already given an extension to the board twice. Sources further said that the board was operating now without seeking an extension from SECP as its tenure had already expired.
The Petroleum Division had written a letter to SSGC saying that the nominations on the Board of Directors (BoDs) of SSGCL, on behalf of the Federal Government, are still under the finalization process owing to the fulfillment of lengthy legal/codal formalities, including approval from the Federal Cabinet, and the same process requires more time
to complete the whole process.
In view, elections for the Board of Directors of SSGCL may further be delayed for another period of (180) days, enabling the Federal Government to complete all the requisite legal formalities for the upcoming election of BoDs of SSGCL, including the finalization of nominations of Directors on the BoDs of SSGCL, Petroleum Division said.
SSGC board expired on October 28, 2022. The ministry has not appointed new directors after five months.
However, the ministry requested a three-month board term extension from the Securities and Exchange Commission of Pakistan (SECP), which was approved as a one-time exception under SECP rules.
The Ministry of Energy (Petroleum Division) requested another 90 days from the SECP after failing to name new directors by January 26, 2023.
Another extension was granted which expired on April 26, 2023.
Now, the ministry had asked SSGC to approach SECP for another extension.
The company, formerly the best public utility in the region, is now unable to deliver uninterrupted gas supply to its consumers and has been losing money due to unaccounted-for gas (UFG)—gas theft and leaks—for three years..
