Khosa’s Clash with IT Executive Surfaces on Mainstream

We had hinted Sardar Latif Khosa’s conflict with multiple IT and Telecom executives in an earlier post. Today the issue was escalated by Ansar Abbasi of The News in a news report.

Adviser to the PM on Information Technology Sardar Latif Khosa faces a mutiny-like situation in his ministry and from the Board of Directors of the two extremely wealthy telecom-specific private sector companies, which the minister heads, but wants to run them in his own style.

There are apprehensions about the fate of a huge fund of more than Rs 20 billion available with these companies. However, what is really a serious matter for Khosa is the opposition that he is facing from his own secretary as well as member telecom of the IT Ministry over the question of key appointments in these companies, which were created for research and development and for spreading modern telecom services in under-served areas of Pakistan.

Already Khosa had a confrontation with his secretary in a recent Senate Committee meeting where yet another PPP Senator Syed Faisal Raza Abidi joined Khosa and shouted at the top officials of the ministry and these companies.

The adviser is alleged to have violated the SECP rules as he ignored the Board of Directors of these companies to impose his own will to get his choice men appointed as Chief Executive Officers (CEOs) of these companies – the Universal Service Fund (USF) and National Information Communication Technologies Research and Development Fund ICTRDF.

Neither have these companies nor has their fund anything to do with the government as they are registered under companies act with the SECP and generate fund from the telecom operators to support their corporate objectives.

The minister in-charge of the IT is the ex-officio chairman of these companies. Some directors are now seriously contemplating to remove Khosa as the chairman of their companies.

Khosa, when contacted, insisted that he was strictly going by the book and wanted that the appointments of the CEOs of these companies should be made on merit and through a transparent procedure.

He rejected the allegations that he wanted his choice men, including his brother-in-law, to be appointed as CEOs of these companies but said that he was really serious to scrutinize the projects of these companies.

Over the controversies surrounding the key appointments, Khosa has already suspended the company secretary following the intervention of the Senate Committee on IT where Senator Faisal Raza Abidi, interestingly, not only objected to the presence of USF CEO but also sought suspension of the company secretary.

The sources said that Khosa and Abidi, who both belong to the presidential camp, used extremely insulting language against the secretary IT, CEO USF and company secretary in the committee meeting. At one stage, these sources said that one of the senators was heard threatening that he would personally go to the IT Ministry to beat the people there with shoes.

Khosa, the sources said, confronted Federal Secretary IT Najibullah Malik, who insisted that despite being the chairman of the USF Khosa has just one vote and he cannot override the powers and authority of the Board of Directors.

In the rush of blood, Khosa during the Senate committee meeting announced the suspension of USF company’s secretary although the SECP rules say that the chairman of a company could sack the company secretary but only with the approval of the Board of Directors.

The secretary IT Ministry, member telecommunication IT Ministry and all other members of the USF BoD believe that the chairman USF could neither suspend the company’s secretary on his own nor he could initiate appointment procedure for the appointment of a new CEO USF.

Documents available with The News reveal that in one of its recent meetings, the board of USF, with the exception of Khosa, supported the proposal to give extension in the tenure of the incumbent CEO USF. Khosa instead objected that since the item seeking extension of the CEO USF was not part of the agenda, it should be brought before the board as part of the regular agenda for BoD’s consideration.

The BoD agreed to the chairman’s view but decided that the CEO USF would continue till the filling of the post by the board. But later, Khosa asked the company’s secretary to advertise the post. The USF secretary told Khosa that it couldn’t be done without the approval of the board. The company secretary was asked to get the approval of the board members through circulation but it could not happen and most of the members did not reply whereas a few of the members, instead of giving approval to this, asked to take up the matter before the next board meeting.

In the case of the other company, ICTRDF, the sources said that Khosa wanted to appoint his brother-in-law as CEO ICTRDF but it could not happen because the selection committee did not shortlist the favourite’s name after his PhD degree was found to be fake by the Higher Education Commission of Pakistan.

The aspirant is serving in the CDA. Khosa, when contacted, denied that he intended to appoint his brother-in-law as CEO ICTRDF and said that if he wanted to do it, his relative’s name would have been short-listed. Najibullah Malik and Member Telecom, Ministry of IT, Mushtaq Ahmad Bhatti, when contacted by The News said the company act clearly envisaged the BoD was the competent authority and that the chairman of the company had no over-riding powers but had just one vote like any other member of the board.

We have the details of senate’s standing committee on IT, held on May 25, 2010. Very same meeting that was mentioned by Ansar Abbasi in above report. Following is what we call detailed report of meeting:

The account is not in exact sequence and is also not full and complete. However it attempts to capture most of what occurred during discussions on Agenda Item regarding USF.

After the first three items of the agenda were discussed the item “Briefing by USF Company on its program for promoting Telecommunication, Broadband, Fiber Optics and other services in under-served and un-served areas of the country”, came up for discussion. The presentation was put up on the screen. Following occurred next;

• Senator Muhammad Zahid Khan asked who was the CEO of USF and Mr. Parvez Iftikhar introduced himself as CEO USF and tried to start his presentation.

• Senator Syed Faisal Raza Abidi asked the CEO why he was presenting when his contract had expired? And how come he was still serving as CEO USF? CEO politely replied that firstly under Companies Ordinance 1984 till the appointment of new CEO, he has to continue. Secondly, he explained, during the last Board Meeting on 31st March 2010 it was decided by the Board that he should continue till the Board finally decides.

• At this the Advisor to PM on IT Mr. Sardar Muhammad Latif Khan Khosa spoke up that the matter was put before the Board but he declined to discuss it. He said that he instructed the Secretary IT to advertise the post but it was returned with the remarks that the post cannot be advertised without permission of the Board. He said that he then asked the company secretary but the company secretary sent it to the Board members for their views. The Advisor stated that this was a clear violation of his instructions and the CEO is continuing and enjoying all the perks despite that.

• Senator Abidi then shouted in an insulting tone that the contract of “this person” (CEO USF) had expired and he was getting 18 lacs as salary (in reality it is much less) and has signed over Rs. 20 Billion worth of projects (the correct figure is Rs. 15 Billion). He then said that after clear instructions of the Minister In-charge to advertise the post how come he is still working as CEO of USF and how can the company secretary refuse the instruction of the Minister Incharge?

• Mr. Hassan Shiko Company Secretary USF requested to be given a chance to explain the matter. He started saying that USF is formed under Companies Ordinance 1984, Section 42 and registered with SECP with an independent Board of Directors which is equally represented by the government and private sector. Under companies ordinance section 199(3) the existing CEO whose tenure is completed has to continue to perform his duties till either he is reappointed or a new CEO comes in. He was explaining that regarding the advertisement also he needed a Board decision which he was trying to seek.

• But Advisor on IT interrupted Mr. Shiko and said that he does not agree to the existing Board as some Board members are enjoying huge contracts from USF and his instructions were violated by not only the Company Secretary but also by the Secretary IT.

• At this stage Senator Abidi hit the desk hard with his hand and shouted that a strict action should be taken and the Chairman USF Board should suspend the company secretary with immediate effect. On this the Advisor IT also angrily said that he suspends the company secretary there and then.

• Secretary IT tried to calm the Advisor down by calling him his elder brother and assuring him that he had great regard for him. He started to clarify that this matter has been lingering on for a few weeks now where the Advisor’s instructions do not appear to be fully in line with the rules and therefore he has also apprised the PM on this. While he was still trying to put across his point-of-view in a very calm and controlled manner, the Advisor started debate regarding the rules under which the matter is referred to the PM.

• The Advisor accused in a raised voice that people in the Ministry have made a gang under Secretary IT. He said that in this Ministry he (the Advisor) feels just like a clerk as his instructions were not being followed.

• Senator Abidi very angrily added as to how could this be happening when the Minister is himself the Federal Government, while the secretary is a secretary to the Government. He again pointed at CEO USF and asked how this person (CEO USF) is still sitting as CEO, why was the CEO position not advertised?

• Senator Moula Baksh Chandio and Senator Zahid Khan at this stage requested the committee members to also listen to what CEO USF and the Secretary were trying to say and that they should also be given a chance to speak.

• CEO USF pleaded that he may be given a chance to make the presentation as per the meeting agenda to inform the senators as to what USF was doing. Senator Chandio agreed with him and asked the CEO to proceed but as soon as CEO USF started he was once again stopped by Senator Abidi that no this person is not allowed to give a presentation as his contract had expired on 30th April 2010. The senator said that the CEO had no “notification” that he could continue. The Agenda item itself was therefore not even touched during the meeting.

• Secretary IT tried to explain that under company rules, there is an HR Committee of USF Board, which has to take a decision and then the Board meeting decides as per recommendations of HRGC. During the last Board meeting held on 31st March 2010, the case of CEO USF was brought up for discussion and it was recommended by all the Board members to the chairman that the existing CEO is the most suitable person to continue and his contract should be renewed.

• The Minister Incharge cut the Secretary IT’s explanation and angrily denied and said that he declined to discuss this in the Board meeting as this was not an agenda item. The company secretary tried to explain that although the minister declined but the chairman and members allowed the CEO to continue, but he was again shouted down by Senator Abidi who addressed the Chairman and angrily shouted that they, as members of this committee, should decide that the Company Secretary of USF should be suspended and an advertisement for the position of CEO USF should be given, otherwise he would resign from the standing committee.

• Chairman of the committee Senator Safi suggested that an Enquiry Committee should be created to find out the exact situation. The members agreed to this and a sub committee comprising of three members, Senator Saleem Saifullah Khan, Senator Muhammad Zahid Khan and Senator Maula Baksh Chandio, was suggested and seconded by rest of the members. But at this stage Senator Abidi intervened and recommended himself to be included in the enquiry committee saying that he would personally investigate the matter.

All this time the tone and manner of Senator Abidi and Advisor IT was very loud and very insulting especially towards Secretary IT, CEO USF and Company Secretary of USF. In between there were several derogatory remarks made against the burocracy in general.

At one stage Senator Abidi said that he would personally go to the Ministry and beat the people with shoes.

The three persons who were being targeted were not allowed to speak. Whenever upon asking by other senators that the three should also be heard, they started to say something they were angrily shouted down by Senator Abidi and Advisor IT. They were also not interested in the working of USF which was the actual agenda item.

At several stages senators like chairman senator Safi, senator Saifullah Khan, senator Zahid Khan and others tried to put some sanity into the proceedings but Senator Abidi and Advisor IT did not let that happen.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK