ISLAMABAD:
A Senate panel on Thursday decided to withdraw the legal powers of the boards of the central bank and equity market regulator to fix salaries of their top executives, after an exorbitant increase in the pay packages of Securities and Exchange Commission of Pakistan (SECP) executives shocked legislators.
Ministry of Law and Justice Secretary Raja Naeem Akbar backed the Senate Standing Committee on Finance’s decision to amend the State Bank of Pakistan (SBP) Act and the SECP Act to withdraw the authority of their boards to fix executive salaries.
Headed by Senator Saleem Mandviwalla of the Pakistan People’s Party (PPP), the committee had called SECP Chairman Akif Saeed to brief on the issue of retrospective increases in his salary and that of SECP commissioners.
On Senator Anusha Rahman’s recommendation, the committee unanimously decided to move amendments in both laws — the SECP Act and the SBP Act. The law secretary assured the panel that said laws will be amended to withdraw the powers of the boards.
Rahman, as per her working, told the committee that out of 18 regulators, salaries of only three were fixed by their boards, while pay packages of the other 15 were approved by the federal cabinet.
On Tuesday, the Public Accounts Committee (PAC) also expressed “shock” over reports that the SECP chairman was drawing an annual salary of Rs41 million. The Daily Dawn reported that an audit had raised serious concerns over SECP’s finances, including unauthorised pay hikes for its chairman and commissioners amounting to over Rs156 million annually.
The report stated that the Auditor General of Pakistan (AGP) held that under the law, SECP must obtain finance ministry approval for salary hikes. However, the SECP management proceeded to approve raises for its employees during a Policy Board meeting on October 17, 2024, effective from July 1, 2023.
On Monday, the PAC questioned how a country in economic crisis could afford such packages. The audit found SECP Chairman Akif Saeed’s pay had reached Rs41.53 million for FY24, while each commissioner received Rs35.8 million due to backdated increases. It also revealed the SECP illegally distributed Rs110 million in entertainment allowances to commissioners and staff.
The SECP chairman defended the board’s decision to increase his salary, saying it was fully empowered to act and made its decision based on a market survey.
“The authority to increase the salary has been misused,” remarked former law minister Senator Farooq H Naek.
Standing Committee Chairman Senator Saleem Mandviwalla added that FBR Chairman Rashid Langrial was also making such decisions. But Langrial, who was present in the meeting, denied it.
“My salary is one-seventh of the SECP chairman’s,” said Dr Kabir Sidhu, Chairman of the Competition Commission of Pakistan (CCP), who was also present. He noted that the CCP, also a regulator, cannot fix salaries without government approval.
The FBR chairman said it was not an unfettered right to increase salaries at will and boards must define a process before determining the increase in salaries.
Law Secretary Raja Naeem Akbar, also a member of the SECP board, disclosed that SECP management had recommended the increases, which the board accepted after months of discussion.
Senator Rahman criticised the finance ministry for granting these powers to SECP and SBP boards by creating exceptions. She said no one could abuse public funds in the name of autonomy and freedom. Senator Naek pointed out that even the Supreme Court of Pakistan cannot set judges’ salaries, which are fixed by the President of Pakistan on the prime minister’s advice.
The Daily Dawn also reported in February this year that top officials of the National Electric Power Regulatory Authority (Nepra) had raised their remunerations significantly without mandatory cabinet approval.
The report said chairpersons and members of regulatory bodies are normally entitled to a maximum Management Position (MP) Scale-I with a basic pay of Rs629,000 to Rs772,780 per month.
But after self-approved increases, the Nepra chairperson’s gross monthly salary rose to almost Rs3.25 million, while senior officials’ salaries reached around Rs2.95 million, as per the Dawn report.
