Courts find appointments illegal: Chiefs of PTV, SECP, USC get the axe
Nasir Iqbal and Malik Asad
ISLAMABAD: The superior judiciary has ordered the sacking of three executives in the Securities and Exchange Commission, Pakistan Television and the Utility Stores Corporation after declaring the appointments illegal.
And curiously enough, a former chief of PTV saw his own appointment held unlawful after the court acted on his petition against his successor and incumbent.
The decision on the SECP head was handed down by the Supreme Court while the others were pronounced by the Islamabad High Court.
The officials in question were: Mohammad Ali Ghulam Mohammad, chairman of the SECP; Mirza Yousuf Baig, managing director of PTV, his predecessor Ashraf Azeem, and retired Major General Mohammad Farooq, head of the Utility Stores Corporation.
Justice Jawwad S. Khawaja, a judge of the Supreme Court, in a short order on the petition against Mr Mohammad Ali, observed: “The selection and appointment of respondent Mohammad Ali Ghulam Mohammad as Commissioner and Chairman of SECP does not meet the requirements of the SECP Act of 1997.” A detailed judgment will be issued later.
The order set aside the Dec 24, 2010, order for his appointment as commissioner and chairman of the SECP.
The appointment was challenged by Mohammad Ashraf Tiwana, a former head of the commission’s legal department, on the grounds that he was the largest shareholder and director of a private brokerage firm, Fortune Securities Limited.
Constituted as an autonomous statutory body, the SECP regulates corporate and financial sectors and all corporate entities and companies, including securities market, non-banking finance sector, insurance industry, stock markets, credit rating agencies, brokers, surveyors and auditors.
In the order, Justice Khawaja observed that the petitioner had raised questions of public importance relating to the enforcement of fundamental rights guaranteed under chapter I of part II of the constitution. The court asked the federal government to appoint without any delay an individual who met the requirements of the SECP Act in a credible, rigorous, transparent and open manner.
The selection and appointment process should be undertaken with due diligence and deliberation which manifestly and demonstrably ensures that the appointee meets all requirements of the law.
The order held that insertion of section 5(5) in the SECP Act through the Finance Act of 2003 was a violation of the constitution, particularly of article 73 (3-1) of chapter 11 of the SECP Service Rules which allowed termination simpliciter (without cause) of employees of the SECP.
This rule, the order added, was not only against the constitution, but also the SECP Act. The section must be replaced appropriately by provisions ensuring due process and adherence to articles 9, 10A, 14, 18 and 25 of the constitution and should be consistent with the provisions of the SECP Act ensuring independent and objective decision making without fear or favour, as required by an independent regulator, the order said.
The court, however, did not accept the petitioner’s request for striking down a June 13, 2011, decision of terminating his (Ashraf Tiwana) service, but allowed him to seek remedies, if available, from a competent forum.
The court directed that the copy of the order be sent to every member of the Securities and Exchange Policy Board for action deemed appropriate by the board in relation to the governance structure and decision making policies of the SECP and for consideration on issues of policymaking highlighted by the petition and for the effective performance of the board’s functions under the SECP Act, particularly section 21 thereof.
The board, which oversees the performance of the commission to the extent of the SECP Act, is required to look into the petition and documents placed on file and submit within 45 days a report on the performance of the commission.
The finance secretary is required to examine wrongdoings/shortcomings, if any, within the ministry and decision making processes of the federal government under the SECP Act and submit a report in 45 days.
PTV AND USC CASES: The Islamabad High Court (IHC) declared illegal the notifications for appointment of three managing directors (MDs) of two state-owned organisations, Pakistan Television and Utility Stores Corporation, observing that rules were not followed while making the appointments.
Justice Shaukat Aziz Siddiqui observed that the appointments of the incumbent chief of PTV, Mirza Yousaf Baig, and his predecessor, Ashraf Azeem, had been made without adopting competitive process — inviting applications through advertisement.
A similar order was issued regarding the appointment of the USC head, retired Major General Mohammad Farooq.
The court directed the government to fill the vacant positions in a month after completing formalities and till then assign senior most officials to take charge of the organisations.
The IHC bench, through a short order, declared the appointment of PTV MD Mr Mirza illegal after its former MD Muhammad Ashraf Azeem challenged his appointment.
The court also declared illegal the appointment of Ashraf Azeem made in 2006 because it was also made without adopting the competitive process.
Naeem Bokhari, counsel for Mr Mirza, submitted record of the appointments in the PTV and salary packages of the two MDs.
Deputy Attorney General (DAG) Tariq Mehmood Jehangiri told the court that the appointment of Mr Mirza was made on verbal instructions of Nargis Sethi, a former principal secretary to the prime minister. She directed the ministry of information to forward a summary for removing the previous MD and appointing Mirza instead, Mr Jehangiri added.
During a hearing last week, the court enquired of Mr Mirza to enlighten it on the competitive process adopted for his appointment. But he admitted that nothing of the sort was done.
He also confirmed that under an agreement with the ministry, he was entitled to three per cent of the profit the PTV earned through advertisements.
His counsel told the court that all managing directors of PTV since 1965 were appointed through the same procedure and without advertising the post.
Mr Farooq, the USC managing director, was sacked on April 9 by the federal caretaker government after canceling his contract. Taking up the petition of Mr Farooq, Justice Siddiqui observed that there were clear instructions from the Supreme Court in the Haj corruption case regarding reappointment of retired bureaucrats and armed forces’ personnel.
The IHC bench declared the contract appointment of the USC MD illegal after a DAG told it that the process adopted for his appointment was illegal and unlawful.
On April 10 Mr Farooq had filed a petition before the IHC challenging his removal. The court, through an interim order, had issued stay order against his removal while seeking reply from the establishment division and the Ministry of Industries.
His counsel Akram Sheikh had argued in the court that his client had been removed in an illegal manner and condemned unheard.
After the IHC bench took up the matter on Friday, the DAG told it that no advertisement was published for the appointment of the MD of the corporation.
The counsel for the retired major general said that the federal government had issued instructions in 2000 that there was no need for advertisement for re-employment of former personnel of armed forces, former judges and former bureaucrats.
The order was issued by the military government of Pervez Musharraf, the court noted.