PESHAWAR: The Peshawar High Court has stopped Khyber Pakhtunkhwa government from initiating the process to appoint the new chief executive officer of the KP Economic Zone Development and Management Company (EZDMC) until further orders.

A bench consisting of Justice Syed Arshad Ali and Justice Shahid Khan gave the government three days to file comments on a petition filed by former CEO of the company Javed Iqbal Khattak against his recent removal by the provincial cabinet.

It fixed Sept 12 for the next hearing into the petition.

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The petitioner has requested the court to declare the impugned acts related to his removal including the cabinet decision as illegal and unconstitutional.

Seeks its response to petition against former CEO’s removal

After filing of the petitioner a new development took place as the secretary of the industries department had issued a notification on Sept 2 terminating services of the petitioner.

Senior lawyer Shumail Ahmad Butt appeared for the petitioner and said that the board of directors of the EZDMC after observing all the legal formalities

had selected and appointed the petitioner as the CEO of the company on Feb 10, 2020.

He said that the decision was subsequently approved by the provincial cabinet and the relevant notification of his appointment was issued on Mar 18, 2020 for a term of three years.

The counsel said that in view of the outstanding performance of the petitioner, the HR committee of the BoD, in its meeting on Aug 17, 2022, recommended the extension of his employment term.

He said that the said recommendation was made by keeping in view the provisions of extension of a CEO in light of the SECP Public Sectors Company (Appointment of Chief Executive) Guidelines, 2015.

The lawyer also pointed out that the Article of association of EZDMC declared that the CEO should be a contractual employee to be hired for a period of three years renewable term with the approval of the government.

He contended that the contract of the petitioner was later extended for another term of three years by KP cabinet in its meeting on Dec 13, 2022, on the recommendation of BoD and the said term would expire in 2026.

The counsel, however, said that the cabinet in its meeting on Aug 27 decided to remove the petitioner though the issue was not on the agenda of the meeting.

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He argued that Section 190 of the Companies Act authorised a company’s BoD to remove its CEO.

Mr Butt argued that the KP cabinet was not vested with any authority to remove a CEO.

While referring to the records, he said that the petitioner had an exceptional track record and his annual performance evaluation reports also proved him a great asset to the company.

He also highlighted that before removing him, the provincial government didn’t bother to consult the Board.

While citing different judgements, the counsel argued that in case of any public sector company, no one can just throw an employee out of company without any show cause notice or opportunity of fair hearing.

He invited the attention of the Bench to a recent judgment of PHC where the court had struck down a similar removal of the CEO of the Water and Sanitation Services Peshawar, another government-owned company.

Mr Butt also informed that the board has also objected to removal of Mr. Javed Iqbal while reposing full confidence in his performance.

Assistant advocate general Waqar Khan informed the court that the department had duly notified the removal of the CEO on Sept 2 and initiated the process for the fresh CEO appointment.

Published in Dawn, September 7th, 2024