ISLAMABAD, May 27: The ministry of commerce is reluctant to intervene in the affairs of Pakistan Horticulture Development Export Company (PHDEC) on the plea that the company is an independent entity.

The company was established few years ago to promote exports of fruits and vegetables from the country.

However, it has been marred by reports of irregularities within the organisation.

The reported irregularities include the appointment of a retired employee of PTCL as Chief Executive of the company in back date and termination of many employees without any genuine reasons.

A letter, copy of which is available with Dawn, was sent to the commerce ministry highlighted the illegalities in the affairs of the PHDEC, a subsidiary company of the ministry of commerce.

According to the letter, the Lahore High Court granted a stay on the working of new board of directors on a writ petition by original board of directors.

Despite a stay order, the new board of directors held a meeting and not only renewed contract of CEO Bashir Husain and also increased his salary substantially.

`Holding any meeting of board of directors and awarding a contract over and above superannuation of a retired employee from PTCL is an illegal activity,` the letter states.

Meanwhile, the ministry of commerce official spokesperson Mohammad Ashraf said the power to hire and fire the CEO are vested in the board of directors of the PHDEC. He further said the incumbent CEO`s tenure expired in 2011 at the time, when the composition of the board of directors was sub-judice.

The incumbent CEO, therefore, continued till the new board was notified. The newboard, in its first meeting, regularised the services of the CEO for a stipulated tenure of three years, the spokesperson confirmed to Dawn.

Since the appointment of new CEO, no audit was conducted from the private auditors. Under the companies ordinance audit is mandatoryand the commerce ministry`s own company is violating the company ordinance.

According to the letter, the delay in audit is an intention to hide the books of accounts from private auditors after new CEO appointment.

The spokesperson of the ministry claimed that the audit by the external auditor for the year 2007-11 has been completed and report signed by the board of directors. He further said that the audit for the year 2011-12 has been completed and waiting for presentation to the board.

Asked about the competence of Mr Bashir for appointment, the ministry spokesperson passed on the responsibility to the board of directors of the company.

`The eligibility criterion for the selection of the CEO of PHDEC is determined by the board of directors`, the spokesperson added.

The letter alleged that many employees were terminated without any genuine reason and without following legal process. Similarly, new PHDEC staff is hired without any planning, the letter added.

The spokesperson said that a few disputes regarding firing of company staff is the PHDEC have been brought to the notice of the ministry of commerce. The cases are being investigated and appropriate action under the law is being taken, the spokesperson added.