Lyonpo Om Pradhan, chairperson of Druk Holding and Investments

A result of the profound inspiration of His Majesty and a fitting response to the challenges and opportunities facing Bhutan today, Druk Holding and Investments (DHI) was created with the primary objective of safeguarding national wealth for all times to come, said the chairperson of DHI, Lyonpo Om Pradhan.

In keeping with the Royal Charter issued on November 11, DHI was formed with an initial grouping of 14 companies in sectors such as hydropower, banking, minerals and natural resources, where the government has full or partial stake. It has a total value of Nu 19,000 billion (US$ 500 million approx.).

“DHI will not only complement the government’s efforts to accelerate development activities, but also provide critical support and services to the growth of the private sector,� the chairperson told Bhutanese media on November 15.

DHI aims to achieve its objectives by promoting competitiveness in the Bhutanese economy by transforming its subsidiaries into highly efficient and productive companies that strive for excellence.

DHI’s role in promoting corporate governance would be in setting trends. In the fully owned companies, DHI would set corporate governance guidelines, required to be followed by these companies and, in the companies where it has shareholding representation, it would submit through the directors exemplary guidelines that could be followed.

The chief executive officer (CEO) of DHI, Karma Yonten, said that DHI was being set up as a full time organisation with professional people. “DHI would primarily look at two areas: enhancing the performance of DHI linked companies and looking at new investment opportunities. As the investment arm of the government, it will have to look at which projects it will execute. Some national projects have already been identified for execution and these will be implemented through DHI.�

Karma Yonten said that, in the past, most companies under DHI were managed by the ministry of finance, which already had other mandates as a government agency. “In a sense, the ministry of finance did not have enough time to devote to management of these companies and they might not have had specific skills to do so,� said DHI’s CEO. “With DHI making investments on behalf of the government, the government will have more time to focus on its other mandates like policy, regulations and planning.�

DHI will be involved in the selection of the board of directors of its subsidiaries, who will appoint the CEOs, which will have to be approved by DHI in keeping with the Company’s Act. However, it will not get involved in the operational aspects of its subsidiary companies.

“DHI will have a higher level sort of control, in the sense that it will set targets for these companies and guidelines and closely monitor their performance but they will have autonomy in an operational sense to take their own initiatives,� explained Karma Yonten.

Karma Yonten said that all DHI employees would be on a three-year contract, four years for CEOs. “Indefinite periods of appointments will no longer be there. One has to ensure that one has performed in order to be eligible for renewal.� He also said DHI will shortly be advertising vacancies through the media.

Government companies play a critical role in the economy and in the growth of the private sector.

Without effective performance of these companies, the government’s drive to improve the private sector and the economy would be unlikely to succeed.

The board of directors of DHI had their first meeting on Friday. Source: Kuenselonline