Islamabad, July 21: Ministry of Finance has sounded a warning over the poor financial health of Pakistan’s state-owned enterprises (SOEs), claiming that many are on the verge of bankruptcy.
According to a recent assessment reported in the media, the ministry has raised serious concerns about the financial operations of numerous SOEs. The findings indicate that these institutions are grappling with severe financial strain, and without swift corrective action, insolvency appears imminent.
The ministry’s review highlights major shortcomings in governance, internal controls, and risk management frameworks. A lack of effective oversight has led to persistent problems, including financial misreporting, escalating operational expenses, and suspected instances of fraud.
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The report reveals that many SOEs are functioning far below acceptable financial standards, with some already in a state of near-collapse. It criticizes the dysfunction of several boards of directors, pointing to their failure to implement strategic decisions and maintain accountability.
Audit committees, in many cases, are either inactive or incapable of exercising meaningful scrutiny. Risk management systems, where present, are often disconnected from daily operations, exacerbating instability and contributing to a growing erosion of public trust in government-run institutions.
Particularly alarming is the situation in the energy and commercial sectors, where weak oversight and complex operational structures have created environments ripe for mismanagement and manipulation.
The Ministry of Finance has urged policymakers and regulatory authorities to undertake immediate and comprehensive reforms. It warns that without structural changes to the governance of SOEs, the current financial challenges could escalate into a full-blown institutional crisis.
