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Express Tribune
12 hours ago
- Business
- Express Tribune
Govt admits poor SOE governance
The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. photo: FILE Listen to article In a rare statement, a cabinet body on Friday admitted that poor governance concerns persisted with low transparency in government-owned companies while their cumulative losses increased further to a record Rs5.9 trillion by December last year. The statement issued by the Ministry of Finance after a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs) appeared to be a serious charge sheet about the poor performance of SOEs during the July-December 2024 period of the current fiscal year, particularly the power sector performance. The energy-sector circular debt, comprising power and gas, jumped to Rs4.9 trillion by December last year. "Governance concerns persist, with low levels of transparency in beneficial interest disclosures under Section 30 (of the SOEs Act) and other compliance gaps," stated the Ministry of Finance. Finance Minister Muhammad Aurangzeb chaired the meeting. The statement added that "the lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reforms". Muhammad Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency and financial sustainability of key public sector entities, it said. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. The cabinet committee reviewed the performance of government entities during the first half of current fiscal year, which also coincided with the first year of the government of Prime Minister Shehbaz Sharif. "The cabinet committee noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion," said the finance ministry. It added that Rs342 billion in additional losses were incurred in just the last six months - equating to a daily loss of Rs1.9 billion. Aurangzeb "emphasised that issues such as inefficiencies in DISCOs' (distribution companies) operations, slow network upgrades by National Transmission and Despatch Company, unfunded pension liabilities and low governance standards continue to erode fiscal space and undermine investor confidence". The finance minister stressed the importance of timely reforms, particularly in power and energy sectors, where circular debt has crossed Rs4.9 trillion, it added. The government reiterated the resolve to bring greater transparency, financial discipline and accountability to the SOE landscape. The finance ministry said that the Central Monitoring Unit gave a detailed briefing on a biannual report on the federal SOE performance covering the period from July to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting state-owned enterprises, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion being incurred in just six months. The committee was told that circular debt in oil, gas and power sectors crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – also exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as in the case of railways' pension obligations, the meeting was told. It was highlighted that government guarantees currently stood at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. The finance minister emphasised that directors representing the government on boards of SOEs must exercise due diligence and play an active role in safeguarding the financial health and operational performance of the entities through informed and responsible input. In a recent meeting of the National Assembly Standing Committee on Finance, Muhammad Aurangzeb said that government nominees on SOE boards were performing below requirements and they needed to pull their socks up. The cabinet committee also approved new nominees on various boards. It approved the appointment of chairman of the Quetta Electric Supply Company (Qesco) board, constitution of the board of directors of the Independent System Market Operator, appointment of independent director/chairman on the board of Gujranwala Electric Power Company (Gepco) and independent director on Genco Holding Company Limited (GHCL). It approved the nomination of independent directors on the board of Multan Electric Power Company (Mepco), Power Information Technology Company and the constitution of the board of Energy Infrastructure Development and Management Company. The cabinet body approved the winding up of three subsidiaries of the Ministry of Railways, which included RAILCOP, PRACS and PRFTC.
Business Recorder
13 hours ago
- Business
- Business Recorder
State-Owned Enterprises: CCoSOEs concerned over staggering losses
ISLAMABAD: The Cabinet Committee on State-Owned Enterprises (CCoSOEs) on Friday noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion, with Rs342 billion incurred in just the last six months—equating to a daily loss of Rs1.9 billion. The committee chaired by Federal Minister for Finance and Revenue Muhammad Aurangzeb emphasised that issues such as inefficiencies in DISCO operations, slow network upgrades by NTDC, unfunded pension liabilities, and low governance standards continue to erode fiscal space and undermine investor confidence. The chair also stressed the importance of timely reforms, particularly in the power and energy sectors where circular debt has crossed Rs4.9 trillion, and reiterated the government's resolve to bring greater transparency, financial discipline, and accountability to the SOE landscape. SOEs' performance: PM directs ministries, divisions to implement monitoring system The committee heard a detailed briefing from the Central Monitoring Unit of the Finance Division on a biannual report on the Federal SOE Performance covering the period from July 2024 to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting SOEs, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion incurred in just six months. The committee was told that the circular debt in the oil, gas, and power sectors had crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs—through grants, subsidies, loans, and other injections—had also exceeded Rs600 billion in six months, equivalent to nearly 10 percent of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as do railways' pension obligations, the meeting was told. It was also highlighted that government guarantees currently stand at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. Governance concerns persist, with low levels of transparency in beneficial interest disclosures under IFRS Section 30 and other compliance gaps. The lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reform. The chair also emphasised the directors representing the government on the boards of state-owned enterprises must exercise due diligence and play an active role in safeguarding the financial health and operational performance of these entities through informed and responsible input. During the meeting, separate summaries submitted by the Power Division for appointment of Chairman on the Quetta Electric Supply Company (QESCO) Board; constitution of the Board of Directors of the Independent System Market Operator (ISMO); appointment of Independent Director/Chairman on the Board of Gujranwala Electric Supply Company (GEPCO) and Independent Director on GENCO Holding Company Limited (GHCL), submitted by the Power Division; and nomination of Independent Directors on the Board of Multan Electric Power Company (MEPCO), Power Information Technology Company (PITC), and constitution of the Board of Energy Infrastructure Development and Management Company (EIDMC), were also discussed and approved. Additionally, a summary moved by the Ministry of Railways for winding up of three railway companies—RAILCOP, PRACS, and PRFTC was also discussed and approved. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency, and financial sustainability of key public sector entities. Federal Minister for Power Sardar Awais Ahmed Khan Leghari, Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry, Minister for Science and Technology Khalid Hussain Magsi, and senior officials from relevant ministries and divisions attended the meeting. Copyright Business Recorder, 2025
Express Tribune
15-03-2025
- Express Tribune
Fraud case filed against housing society manager
The Secretariat Police Station has registered a fraud case against the manager of a private housing society for failing to return Rs4.9 million to a citizen. The complainant, Malik Shehbaz, resident of Rawalpindi, reported to the police that the society's manager, Muhammad Arshad, had ties with him. Arshad had claimed that the society was facing financial difficulties and asked Shehbaz to organise a function at a private hotel on Murree Road, Islamabad. He had promised to return the money soon. Subsequently Shehbaz spent Rs4.15 million on the event and an additional Rs0.9 million on promotional campaigns.
Express Tribune
22-02-2025
- Business
- Express Tribune
Standard Chartered posts Rs100.6b profit
Listen to article Standard Chartered Bank Pakistan Limited (SCBPL) has posted a profit before tax of Rs100.6 billion reflecting a growth of 13% year on year (YoY). Performance was driven by strong income growth of 9% YoY, with positive contributions from all segments. Operating expenses of the bank reached the industry's lowest cost-to-income ratio at 19%, despite high inflation and investments in infrastructure. According to a statement filed at the Pakistan Stock Exchange (PSX), SCBPL said its prudent risk approach and recoveries of bad debts led to a net reversal in impairment of Rs4.9 billion during the year. On the liabilities side, bank's total deposits stand at Rs836 billion; up by Rs116 billion from last year, whereas current accounts registered a growth of Rs37 billion up 10% YoY and comprise 48% of the deposit base, as per the statement. On the asset side, net advances were lower by Rs49 billion or 22% compared to last year. During 2024, the Bank contributed Rs78.9 billion to the national exchequer in lieu of direct income taxes, as an agent of Federal Board of Revenue (FBR) and on account of FED/Provincial Sales Taxes. Commenting on the results, Rehan Shaikh, Chief Executive Officer and Head of Coverage, Standard Chartered Bank Pakistan said with a strong Return on Equity (ROE) of 43% for the year and a Capital Adequacy Ratio (CAR) of 23.5%, the Bank remains well positioned for future growth, as per a statement released by the company. The statement added that on the back of a strong performance, the BoD announced a final cash dividend of 55.0% (Rs5.50/- per share). This is in addition to 35.0% (Rs3.50/- per share) interim cash dividend announced/paid during the year.
