ISLAMABAD: The federal government would establish a central monitoring unit (CMU) in the Finance Division to maintain an electronic database of the financial and operational performance of State Owned Enterprises (SOEs) under the proposed SOEs (Governance and Operations) Bill, 2021.
According to the proposed law, the federal government will establish a central monitoring unit in the Finance Division which will also maintain an electronic database of the financial and operational performance of state-owned enterprises and the following information in relation to state owned enterprises, namely; (a) statements of corporate intent; (b) business plans; (c) half-yearly and annual reports; and (d) any other information prescribed in the state-owned enterprise management policy.
The central monitoring unit shall undertake analysis on the financial, commercial and operational performance of SOEs, and on the basis of such analysis, submit recommendations to the federal government on matters related to their performance and governance, including; (a) the overall performance of state-owned enterprises; (b) performance of SOEs against their primary objectives, business goals, and performance targets and benchmarks; (c) investment in, loans to, and guarantees of SOEs; (d) the risks associated with SOEs sector that could affect the State’s investment in it; (e) proposals relating to major transactions by state-owned enterprises as and when required by the federal government; (f) best practice by SOEs for encouraging and enhancing efficiencies and service delivery, and for improving performance; (g) agreements for public service obligations as and when required by the federal government; (h) compliance under section 32 by SOEs; (i) SOEs reform options as and when required by the federal government; (j) analysis of the content of the statements of corporate intent, business plans, annual reports and semi-annual reports; and (k) any other matter which the federal government may require.
The central monitoring unit shall issue periodic reports on the performance of the SOEs and matters listed in sub-section, which shall not be less than once every half year, in such form and manner as may be prescribed and such reports shall be submitted to the federal government.
The central monitoring unit shall publish a consolidated report on the performance of SOEs annually, with the approval of the federal government; (1) Every state-owned enterprise shall be required to submit information to the central monitoring unit as required under this Act Provided that if there is any change or error in the particulars already submitted to the state-owned enterprise monitoring unit, it shall be updated or corrected as the case may be, within fifteen days of such change or knowledge of error. (2) the central monitoring unit may, by notice in writing to a state-owned enterprise, require a disclosure by the state-owned enterprise to enable the central monitoring unit to discharge its functions under this Act; (3) a state-owned enterprise must comply with a notice under sub-section (2) within ten working days after receiving it.
The federal government shall establish a committee of the federal cabinet to monitor the implementation of the proposed Act. The Division to which the business of a SOE has been allocated under the Rules of Business, 1973 shall co-ordinate with the Board of such SOE to monitor compliance with the provisions of this Act, including, without limitation, with respect to the development of the business plan, statements of corporate intent, the annual reports, timely establishment of systems of internal controls of the SOE, appointment of the Chief Executive Officer, and reporting to the central monitoring unit.
The federal government may carry out its functions and powers under this Act, except the power to make rules or to appoint independent directors, either directly through or by delegation to one or more of its Divisions or a body corporate which may be established by the federal government for this purpose by notification in the official gazette.
In case the federal government establishes a body corporate then the functions of the central monitoring unit shall also be undertaken by such body.
Copyright Business Recorder, 2021