Who Owns Pakistan - Yimg

inter-corporate investment was the route taken by the, " Lahore Mafia" to acquire
several of the profitable units privatized by first Sharif govt.
The Monopoly Control Authority (MCA) annual report for 1991-92 found 308
cases of inter-corporate financing during the year and another report about textile
found that 105 of 164 textile units examined by it, invested Rs 6,585 million and
Rs 4,285 million repectively in 1991-92 and 1192-93 in their associated
undertakings.
There was also a reverse flow from the associated companies to the parent
companies and 92 textile units received Rs 2,524 million and Rs 2,222 million
from their associated companies during the two years. Thus total inter-corporate
financing in the textile sector during 1990-92 came to a staggering Rs 9 billion.
Even before the promulgation of Companies Amendment Ordinance 1993,
company-law 1984 and related laws were impregnated with provisions aimed at
checking the concentration of wealth and creation of cartels and monopolies. For
example the company law required a listed company seeking to extend loan to
an associated undertaking to give a notice, in at least two newspapers, stating
what will be the security, terms of payment, profit or rate of interest etc.
The Monopolies and Restrictive Trade Practice, Control and Prevention
Ordinance 1970 had clearly envisaged that the provisions prohibiting undue
concentration of wealth will be attracted if an individual holds or controls more
than 50% shares of a company. It also stated that a situation of undue
concentration of wealth would arise if there are dealings between " associated
undertakings" resulting in unfair benefits to the shareholders of one undertaking,
to the prejudice of the other.
The law also established a presumption of unreasonable monopoly power when
competing undertakings with 20% or more of a market are interlocked through
common management or control or through common partners. It prohibited anticompetitive
mergers and acquisitions and financial institutions from making loans
to firm associated with them, on terms and in amount more favorable than those
afforded to an unrelated firm. Many of the above mentioned situations emerged
in respect of acquisition of five cement plants by Mian Mohammad Mansha and
his relatives and business associates and yet Corporate Law Authority failed to
take cognizance of the situation. When the unprecedented price hike of cement
in the wake of privatization forced the government to launch an inquiry into the
phenomenon, MCA concluded that " the MCA is unable to regulate prices of any
goods manufactured by a dominating or single monopolistic firm"
In an interview with Pakistan and Gulf Economists in March 10, 1990 issue,
Chairman of Corporate Law Authority Irtaza Hussain had said, " in my view, the
consolidation of group accounts should be introduced shortly" and that Corporate
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