Who Owns Pakistan - Yimg

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Accelerated privatization under a formula which is rooted in corruption and is further being corrupted would only doom Pakistan to consequences of far greater magnitude than those born out of Bhutto's nationalization. It would only mean more of the same, turning into reality the prediction that Pakistan's future is Pakistan's past. Now that second Nawaz government is determined to privatize bulk of the state enterprises and facilities developed by successive governments during the last 50 years, with tax payers money and foreign and local debt of rupees thee trillion, the least that must be demanded of the government is a new declaration about its agenda for privatization, the methods and objectives and how the government hopes to achieve them. The people of Pakistan have a right to demand from champions of transparency and freedom of information that the sale agreement of 90 privatized units be made public and people taken into confidence on whether or not the new owners have abided by these agreements, particularly their undertaking to repay liabilities of these units. In his first term, obsession with the Motorway earned Prime Minister Nawaz Sharif the name of " second Sher Shah of Sour", the Afghan King, remembered fondly in the subcontinent, for construction the road linking New Delhi with Kabul. It appears that in his second term, Nawaz Sharif is determined to go down in Pakistan's history, as a modern-day King Richard who used to say "I would sell London, if I find a suitable buyer". Owning the Liabilities, Transferring the Assets The unkindest cut on the people of Pakistan inflicted by privatization relates to the liabilities of privatized units. Under the privatization carried out in last seven years, assets have been transferred to new owners, but government has been left holding the liabilities of the privatized units which are manifold the yields from privatization. As explained above, the formaula designed by the Privatization Commission is 1991 envisaged that the reference price of a unit marked for privatization should be worked out on the basis of "current value of assets, less all liabilities at book value". It was maily because of this provision of reducing the value of the assets, by the amount of liability to arrive at a reference price that 88 privatized industrial units have fetched only Rs 15 billion. No exercise has been undertaken by the Privatization Commission or govt. about the foreign and domestic debt that has been transferred to the owners of privatized units. It is the sale agreement that spells out the liabilities of the privatized units to the national commercial banks, World Bank, International Finance Corporation (IFC), Asian Development Bank, bilateral donors and commercial lenders. The supreme irony of the whole exercise is that the foreign debt incurred by the Govt. of Pakistan is non-transferable. Thus after privatization these liabilities are only technically transferred to the new owners. Whether or not 37
the new owner abides by the sale agreement, govt. is required to meet its repayment obligation with respect to the foreign loans of privatized units. It can be safely said that the debt liabilities of the privatized units are manifold the yield from privatization since, in case of Naya Daur Motors whose sale agreement was made available to the author, the liabilities are many times the bid price. Naya Daur Motors were sold to Tawakkal for Rs 39 million while the new owner had undertaken to clear the liabilities of Rs 145 million outstanding against the Asian Development Bank, Republican Motors and National Development Finance Corporation (NDFC). The amount is in default four years after privatization. Interviews and case studies have revealed that neither Benazir nor Nawaz Sharif followed a clear cut policy for post-privatization liabilities. However Finance Minister, Sartaj Aziz told several press conferences attended by the author that Benazir Bhutto had sold the units on "as is where is" basis which meant without liabilities while Nawaz govt. privatization required the new owner to take over the liabilities. In theory Nawaz policy was sound but in practice it has worked out to be the same as that of Benazir Bhutto since huge amounts of loans are outstanding against units privatized by both. According to the list of defaulters published by caretaker Prime Minister Meraj Khalid, Rs2,303 million was in default against six privatized units namely Metropolitan Steel (Rs1,128 million), National Motors (Rs 464 million), Quality Steel (Rs 295 million), Naya Daur Motors (Rs 215 million), Associated Industries (Rs 103 million) and National Fibre (Rs 90 million). An amount of 1.5 billion was outstaning against Ghazi Textiles, Harapa Textile and Pasrur Sugar Mills privatized by Nawaz Sharif, as Chief Minister, Punjab in 1984- 86. Big Cover Up in Corruption in Privatization Corruption in privatization under Benazir and Nawaz Sharif governments during 1990-97 has made legends. Volumes can be written about corruption in their privatization simply by compling the charges that they have traded with each other. It would appear that not a single deal of privatization during the last seven years has been free from corruption. Yet the full story of corruption in privatization has not been told because the leadrs of of the two parties talked about each other's corruption when in opposition. But when in power they displayed a vested interest in covering up others corruption. In fact interviews by the author, with present and former cabinet ministers and officials of the Privatization Commission have revealed that Meraj Khalid govt. in which Shahid Javed Burki, Senior Vice-President of World Bank served as 38
Page 1: Who Owns Pakistan By Shahid-ur-Rahm
Page 4 and 5: G: UBL Privatization Bid ..........
Page 6 and 7: Pakistan's Robber Barons ..........
Page 8 and 9: A Brief introduction - For those wh
Page 10 and 11: Prologue "I Nawaz Sharif, do solemn
Page 12 and 13: Nawaz Sharif was not an individual.
Page 14 and 15: A white paper on " Economy under Bh
Page 16 and 17: The first Nawaz government was foll
Page 18 and 19: Another remarkable person mentioned
Page 20 and 21: Dawood lost Karnaphuli Paper Mills,
Page 22 and 23: disprove that bulk of the banking a
Page 24 and 25: perpetuated their control over the
Page 26 and 27: Kohat Cement, Dandot Cement and Tha
Page 28 and 29: Earlier in this chapter, we have li
Page 30 and 31: Insurance companies of 22 families
Page 32 and 33: Born in Rangoon, M A Rangoonwala ha
Page 34 and 35: Crescent was a joint venture of fou
Page 36 and 37: Privatization - Turning the Clock B
Page 38 and 39: day Privatization Conference in Isl
Page 40 and 41: Independant Resource Group (IRG) of
Page 42 and 43: companies, management was to be tra
Page 46 and 47: Finance Minister took a conscious d
Page 48 and 49: clauses and buyers have committed b
Page 50 and 51: 22nd May, 1989 suggested a strategy
Page 52 and 53: Pakistan Petroleum Limited (PPL) to
Page 54 and 55: group but thanks largely to the ala
Page 56 and 57: caretaker govt. to recover Rs 1,500
Page 58 and 59: Pakistan, had incorporated Muslim C
Page 60 and 61: Cement for Rs 137 million and Rs 18
Page 62 and 63: 5-star hotel. Bhutto who had planne
Page 64 and 65: For example, PSL is being managed b
Page 66 and 67: According to the Khalid Anwar, Burm
Page 68 and 69: also been assigned to the shelves o
Page 70 and 71: 32 Harijanss 61 - 61 33 Shafi 60.2
Page 72 and 73: 21 Sargodha 2,743 -- 22 Al-Noor 2,5
Page 74 and 75: had opened their offices in Japan,
Page 76 and 77: East, REDCO Textile Mills and Const
Page 78 and 79: 4 billion and a roaster of impressi
Page 80 and 81: The geographic location of the comp
Page 82 and 83: Haroon's great grandfather had migr
Page 84 and 85: Gujrati and tended to be organised
Page 86 and 87: 9 Karim 3 10 Hasham 2 11 Latif Jama
Page 88 and 89: At present, the Kaiser Monnoo group
Page 90 and 91: Sugar Mills and Samundri Sugar Mill
Page 92 and 93: " The days immediately after nation
Page 94 and 95:
fortunes which were multiplied, in
Page 96 and 97:
the pioneer Muslim industrialist in
Page 98 and 99:
According to Lawrence White, top se
Page 100 and 101:
Beginning of Bad Loans Bhutto's nat
Page 102 and 103:
Jang, Rawalpindi of December 14, 19
Page 104 and 105:
8 Saigol 1,086 9 Naqvi 1,056 10 Zah
Page 106 and 107:
10, 1997, the Supreme Court observe
Page 108 and 109:
Prime Minister Nawaz Sharif will gl
Page 110 and 111:
specific tax holidays. It was not c
Page 112 and 113:
This decision is based on personal
Page 114 and 115:
oil". It is not difficult from the
Page 116 and 117:
In the fiscal year 1991-92, Messers
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21 Hussain Nawaz Sharif 3,285,6813
Page 120 and 121:
The voiceless small investors have
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Chapter Four - Pakistan's Tax Web P
Page 124 and 125:
28. Ushr 29. Oilseeds Development C
Page 126 and 127:
political heavyweights or their hen
Page 128 and 129:
Export Duties It is one of the most
Page 130 and 131:
Capital Gain Tax As is evident from
Page 132 and 133:
Law Authority will soon seek public
Page 134 and 135:
Chapter 5 - Money and Politics Elec
Page 136 and 137:
Some of the known units of Saifulla
Page 138 and 139:
These charges were peanuts when vie
Page 140 and 141:
In the references about Lakeview Ho
Page 142 and 143:
Epilogue For several years, the peo
Page 144 and 145:
One wonders how a government that c
Page 146 and 147:
accustomed to buying his casual out
Page 148 and 149:
141
Page 150 and 151:
chemicals, synthetic fibres, cookin
Page 152 and 153:
Iqbal Saigol S. No Name Assets Turn
Page 154 and 155:
In a communication to the author in
Page 156 and 157:
Dewan Listed Companies S. NO Names
Page 158 and 159:
conference in Islamabad, on March 2
Page 160 and 161:
Listed Companies S. No Company Asse
Page 162 and 163:
when the Rserve Bank of India faile
Page 164 and 165:
10. Noble Computer Services (pvt) L
Page 166 and 167:
Syed Maratib Ali was a well known n
Page 168 and 169:
Unlisted Companies 1. Clearance and
Page 170 and 171:
Akbar Hashwani 1. Hashwani Construc
Page 172 and 173:
Dawood Cotton Mills was set up in 1
Page 174 and 175:
5. Margalla Textile 6. Rawal Textil
Page 176 and 177:
Lakhani (Lakson) Lakhanis have grow
Page 178 and 179:
6 Husein Sugar 358 560 7 Shadman Te
Page 180 and 181:
Unlisted Companies 1. Ibrahim Agenc
Page 182 and 183:
4 B F Modaraba 16 16 5 Bawany Air 5
Page 184 and 185:
Financial Assets 5 Schon Bank 1,994
Page 186 and 187:
Mian Mohammad Ismaeel Sheikh was a
Page 188 and 189:
1 Mubarik Textiles 346 119 2 Fatima
Page 190 and 191:
1 K S B Pumps 343 385 2 Adamjee Pap
Page 192 and 193:
Independently his group has four co
Page 194 and 195:
Bibliography 1. 50 years presentati
Page 196 and 197:
63. The sick industary therapy, art
Page 198:
29. Hotelier in Pakistan looks for
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