SSGC, Petroleum Division Locked Horns in Battle over MD’s Extension
Newztodays Team
The tension between the board of SSGC and the Petroleum division has intensified as the board refuses to follow the direction of the petroleum division to grant an extension to managing direction and hold an early election to appoint a new board of directors.
The current board of SSGC was granted four times an extension that had irked the petroleum division.
The petroleum division had barred the SSGC board from ousting the existing managing director and other policy decisions.
Petroleum Division has once again directed Sui Southern Gas Company Limited (SSGC) to grant an extension to the managing director (MD) and to conduct early elections to appoint a new board of directors.
The board of directors of SSGC is going to meet on Saturday to decide in this regard.
The current board’s tenure has already expired, and it was granted four extensions during its tenure.
The Petroleum Division sent letters to the SSGC company secretary on December 4 and December 8, 2023. However, there has been no implementation of the directives so far.
Recently, the board of directors held a meeting and assured the Petroleum Division that it would not remove the existing managing director of SSGC and would hold early elections to appoint a new board.
In a recent letter dated January 25 to the company secretary of SSGCL, the Petroleum Division mentioned that it has learned that the Ministry of Energy (Petroleum Division) letters dated December 4 and December 28, 2023, advising/directing the board, were discussed by the SSGCL Board regarding the extension of the MD, SSGCL.
However, the SSGCL Board has sought legal opinion about the terms of the MD’s contract, while the Ministry’s advice/direction dated December 28, 2023, was about the extension of the incumbent MD based on legal grounds/opinion, as per Section 187 of the Companies Act, 2017.
The Petroleum Division further stated that the directive in para-4 of its letter dated December 28, 2023, which prohibited SSGCL from removing the existing managing director and making other appointments, is still in effect for administrative arrangements to avoid a leadership gap in the company without prejudice. The Petroleum Division has called for early elections.
Earlier, the federal government had prohibited the current Board of Directors (BoD) of Sui Southern Gas Company (SSGC) from appointing a new Managing Director or filling senior positions.
The responsibility for such appointments has been transferred to the incoming board.
The Petroleum Division has directed the company secretary to promptly conduct elections for a new board of directors as the current board’s term has ended, and key positions remain vacant.Appointment of SSGC Board Chairperson Challenged in Court
The company was advised to defer strategic decisions to the incoming board. Despite several extensions in the existing board, the elections for SSGC’s board have not taken place, raising concerns about financial challenges and legal disputes.
The Petroleum Division emphasizes the urgency of elections, highlighting potential cash flow issues and the need for continuity in management. The current managing director’s tenure is set to expire next month.
