As
you would be aware, Directors nominated by the Government
on the board of Public Sector Enterprises (PSE) do not represent
any beneficial interest in such entities and as such their
position on the boards is distinct from those represented
on the boards of entities by virtue of majority shareholdings.
These persons are placed on the boards by the Government owing
to their professional competence, experience and qualifications.
A person represented as a nominee director in any PSE may
as well be represented on the board of other private corporate
entities. Banks / NBFIs while furnishing CIB data in respect
of their borrowers to the State Bank of Pakistan however,
do not make any distinction between these two classes of directorship.
In case the PSE is in default, commercial interest of nominee
directors are affected as banks / NBFIs are reluctant to extend
further financing to all such concerns because of default
of the PSE. This situation has resulted in reluctance of competent,
qualified and experienced persons to accept their nomination
as directors on the boards of PSEs.
In order to redress this situation, it has been decided that
private sector directors nominated on the boards of PSE’s
will not be treated as defaulters on the basis of any overdue/default
of the PSE reported to CIB. However, any overdue/default in
a private sector company on which the said director is an
elected director, shall continue to be governed under the
existing rules. Henceforth banks / NBFIs may while furnishing
data to the Credit Information Bureau (CIB) in respect of
PSEs should also separately indicate the type of directors
(elected or nominee). A revised format of database file structure
of permanent data (CIB-1) is enclosed. This will facilitate
consideration of financing facilities by banks/NBFIs to the
other companies of the nominee directors.
Please
acknowledge receipt.
Click
here to see the Enclosure.
|