There are whispers in the wind that a new presidential ordinance is in the works which would make significant changes in our company law. The Pakistan Tehreek-i-Insaaf (PTI) government has planned to amend various sections of the Companies Act, 2017, including Section 172 which lays out the disqualification criteria of persons holding the office of a director of a company. After this amendment, individuals who have entered into plea bargains with the National Accountability Bureau (NAB) will be able to become directors of private, as well as public companies, whereas, in the current law, they are disqualified from doing so. Even more needlessly, the government has also deleted Section 459 of the act that had guaranteed a quota for persons with disabilities in the public interest companies.

These amendments contain the exact characteristics that the PTI government criticised the Pakistan Muslim League-Nawaz (PML-N) of indulging in – it would almost seem that the ruling party is overlooking financial irregularities and making person-specific laws. Since PTI claims that meritocracy, transparency and accountability have always been guiding principles, the reasons for making these changes must be clarified.

Our legal system is already burdened with loopholes and contradictions – legislation has to be carefully drafted and deliberated upon. The new amendments the government have a political character, are not well-thought-out and will cause complications down the road – already the government is rolling back the amendment of Section 282 of the act, which withdrew the SECP’s powers – effectively threatening a current transaction valuing up to Rs300 billion While this specific section has been sent back to the finance ministry to be reviewed, the rest of the ordinance should also be given a second thought to ensure that it does not further complicate company law and is consistent with PTI’s principles on accountability.