LAHORE - Justice Shahid Karim of the Lahore High Court on Monday directed the Punjab government and Punjab Minister Mian Mehmoodur Rashid, who is the petitioner, to raise the issue of functioning of 56 public sector companies in the cabinet meeting and decide the matter by December 7.

In 2016, Mian Mehmoodur Rasheed, who is currently Punjab Housing and Urban Development Minister and then was opposition leader in the Punjab Assembly as well as then chairman of Public Accounts Committee, had filed a petition under Article 199 of the constitution challenging the legality of such companies.

The court directed Mehmoodur Rashid and the government’s representative to raise the issue in the cabinet whether the companies should continue functioning else the court would decide the matter on merits on the next date of hearing – December 7. Appearing on behalf of the Mian Mehmoodur Rashid, Sheraz Zaka Advocate argued that these public sector companies were functioning in violation of Article 140 of the Constitution and impinges upon the efficient functioning of the local government.

He said that these 56 companies had made political appointments consisting of members of Punjab Assembly which should be declared in violation of Public Sector Companies Rules 2013.

The court directed the petitioner who is a Punjab minister as well as Punjab Advocate General to raise the issue in the cabinet meeting by 7 December and apprise the court with the decision of cabinet on the issue. The court also directed the Punjab government and the petitioner to produce the minutes of cabinet meeting by on the next date of hearing.

Some of the public sector companies filed their replies before the Lahore High Court defending their establishment and rejecting the charges of corruption leveled in petitions taken up by the court about legal status of 56 such companies.

Their replies state the companies had been duly established under the Companies Ordinance of 1984 by the provincial government. These companies were following all corporate compliance and governance procedures and requirements under the statutory provisions of the Companies Act, 2017 and the subordinate legislation(s)--Public Sector Companies (Corporate Governance) Rules 2013 including statutory audit.

The companies also challenged the merits of the petitions, saying the petitions had not asserted a single constitutional or legal ground to invoke constitutional jurisdiction of the high court.

The petitioner had pleaded that Rs150 billion had been spent by the provincial government on the public companies established on the pretext of ‘good governance.’ He alleged that government faced a huge setback as the companies failed to deliver. He claimed the audit of the accounts of these companies had not been carried out except one for performance audit. They added no company published any annual audit report while heads of these companies had been drawing huge salaries besides other perks and privileges.

These companies include Punjab Saaf Pani Company, Lahore Cattle Company, Punjab Land Development Company and others. Several of such companies now fall under the control of PTI’s senior ministers including Local Government Minister Aleem Khan and Housing and Urban Development Minister Mian Mehmoodur Rasheed.

Before the elections, the PTI had challenged the legality of companies created by Pakistan Muslim League-Nawaz (PML-N) government.

In June, 2018, the LHC had postponed the hearing, maintaining that before the court decides upon the matter, the new government after the 2018 elections should be given a chance to use its executive prerogative to decide whether they want to keep the companies or not.

The petitioner made Federation of Pakistan, Govt of Punjab, the Securities Exchange Commission of Pakistan and Lahore Transport Company as respondents.

The petitioner says unfortunately the respondents No.9 to 20 were already members of Punjab Assembly and at the same time simultaneously also functioning as directors of the Companies, incorporated under Section 42 of Companies Ordinance controlled by Punjab Government hence their functioning as Board of Directors is illegal.

The affairs of these companies should have been administered on transparent and fairness basis but actually the affairs of these companies are tainted with malpractices, it says