Who Owns Pakistan - Yimg

govt. of arbitrarily fixing the reference prices of the privatized state units and
ignoring those suggested by the evaluations. It was revealed that bids for a total
amount of Rs 759 million were received for 16 Ghee Mills but they were sold for
636 million. The management of these units were handed over after a down of
Rs 315 million, out of which Rs 137 were repaid as govt. share in Golden
Handshake Scheme. The balance has not been paid to-date since the new
owners have gone to court, on one pretext or another.
Sartaj Aziz defended the allegation in " The privatization of Ghee Mills, a
rejoinder to FACC" released at a press conference. This is how he responded to
the allegation that several state enterprises were sold at a price below those
suggested by valuateors.
" No arbitrary fixation of price took place at all. The reason for any deviation from
the figures worked out by the consultants have been explained in detail in review
note of the valuation of each unit. The Privatization Commission, with approval of
the Cabinet Committee on Privatization (CCOP) had agreed to adopt a uniform
basis for the value of the goodwill in case of profitable units, as two years
purchase of average profit, net of tax. Similarly in the case of loss-making units
two years average losses net of tax credit were to be considered. Also a uniform
rate of depreciation based on the normal tax depreciation rate was to be
considered for depriciable fixed assets. These factors have been uniformally
applied to arrive at the reference prices of all units offered for disinvestment
without any exception".
The transparency in deciding the sale price is evident from the statement above
which is not easy to comprehend. But the crux of what it said is " YES, WAYS
WERE FOUND TO CHANGE THE REFERENCE PRICES FIXED BY THE
EVALUATORS". Selling the units at a price far below the reference price was not
limited to ghee units alone. At least half of the industrial units have been sold
much below the reference price, on one ground or another.
B: Schon Group
National Fibre was one of the most profitable public sector units whose
profitability induced others like ICI to set up polyester fibre projects. In 1991-92
when the project was privatized it had an impressive balance sheet of paid up
capital of Rs 423 million, annual sales of Rs 990 million and a profit of Rs177
million. It was sold on Feb 2, 1992 for Rs 756 million to Schon Group and
delivered after a down-payment of Rs 302 million, which is still defaulting in
payment of Rs 356 million for National Fibre.
In May 92, Pak-China Fertilizer was also sold to Schon group for Rs 456 million
and handed over on a payment of Rs 182 million. A balance of Rs 240 million
was outstanding against the group but no effort was made to recover it. Instead,
Bhutto govt. approved the sale of Pak-Saudi Fertilizer to front-man for the Schon
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