Finance Minister Ishaq Dar has set a 10-day deadline to resolve all outstanding issues with Etisalat, which has delayed payment of the remaining amount of $800 million for purchase of shares in Pakistan Telecommunication Company.
Dar has directed the Privatization Commission to settle the disputes that have hampered the transfer of properties belonging to PTCL and remove all hurdles within 10 days, according to the Finance Minister’s Office.
The deadline has been set in an effort to swiftly bring to an end the seven-year-old row.
“We need to think out of the box and move on a fast track,” Dar said. The directive was given in a meeting between Dar and an Etisalat delegation. The delegation comprised PTCL President and Chief Executive Officer Walid Irshaid, CEO-Asia Etisalat Jamal Jarwan and Etisalat Chairman Abdul Rahim Nooryani.
Etisalat had bought a 26% stake in PTCL along with management control at a price of $2.4 billion. However, it withheld $800 million on the grounds that grey traffic was hurting the company’s business and because of a dispute over transfer of 131 properties.
The main dispute is over Defence Housing Authority (DHA) property in Karachi, whose value is said to be in billions of rupees.
The government has anticipated in the budget for the fourth consecutive year that it will get $800 million from Etisalat and any further delay may create problems at a time when the country is entering into a fresh bailout programme with the International Monetary Fund (IMF).
Dar reiterated the government’s desire that the matter should be resolved in the spirit of brotherly relations between Pakistan and the UAE.
Market sources say Etisalat is taking profits on 26% shares but has actually paid less, raising questions over legality of the transaction. Sources were of the view that if the disputes between the two parties lingered on, the government of Pakistan may take some action.
However, before that it will again use the diplomatic channels as the PML-N government is said to have good relations with UAE rulers.
According to sources, Nooryani told the finance minister that they had come to this meeting with full confidence, believing transparency, merit and sincerity were the hallmarks of this government.
Dar apprised the delegation of the financial situation in Pakistan, saying this required an early settlement of the longstanding issues, so that the country could ease the pressure on its foreign exchange reserves.
He said the government was seeking a fair, transparent and equitable resolution based on established commercial rules as this was a commercial transaction.
Etisalat’s executives said they had been making serious efforts over the last seven years to get the titles of 131 properties transferred after which the outstanding payment could be made, according to an official handout issued by the FM Office.
Unfortunately the issue of properties had remained unresolved until now, they said.
Dar asked the delegation that issues pertaining to properties would be resolved and he would take personal interest in the matter. The delegation also invited the finance minister to visit UAE, which he accepted.
Published in The Express Tribune, July 6th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (13)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@BetelQ8: The price of the property is not relevant. What is relevanti is what was agreed I the contract which was signed by Musharraf government not Dar. If the properties were part of contrac, then withholding them is a breach of contract.
@Saleem: You clearly do not understand Otis Etisalat who owes $800 million to Pakistan not the other way around. S there is no question of Pakistan making any payment out of tis own treasury or Dar's pocket.
The dispute is of 800 million USD, and several properties were to be transferred to PTCL as part of the arrangement. Not transferred to Etisalat. Transferred to PTCL. of which PTCL has a 26% share, the rest is with the Govt. If Etisalat sells those shares back to the Govt, the property remains with the Govt.
32 properties are Public (Govt) properties, 99 are private.
The transfer of these properties was part of the agreement signed over 7 years ago. Interestingly, there is no confusion on this. If there was any, the matter could have been taken up in courts, both local and international arbitration courts are available.
Again, whoever thinks the properties are worth billions of "DOLLARS" needs to read correctly. Also, once again, the properties need to be transferred to PTCL. Not to Etisalat.
From the wiki page of Ishaq Dar , most probably created by his own office ( based on systemic bias stated on page ) :
So he is just doing his job left unfinished.
Now Dar is threatening UAE on only one company matter but only a matter of time when the UAE will issue warning whose consequences will be more than etisalat and this will be a blow to pakistan in this stage of international isolation.
To get favors on their businesses and activities in UAE , Dar can pay Etisalat as much as he wants BUT not from national exchequer. It is not his inherited money but it belongs to the nation. I wonder where the courts are sleeping. If no action is taken on this then it will remove any last doubts that courts are siding with Sharifs and cronies. Take suo moto action where 800 million USD is concerned instead of taking on reason for delayed flight because it caused inconvenience to you.
Only Dar can do it, to hand over Billions of dollars worth of property for 800 Million. After all he has billion of dollars business setup in UAE under the name of his sons and a Hindu partner. How can he dare upset the ruling Al-Nahyan family, the owners of Ettsalat.
"Etisalat withheld $800 million on the grounds that grey traffic was hurting the company’s business and because of a dispute over transfer of 131 properties." +++++++++++++++++++++++++++++++++++++++++++++ So on the morning of 15th July the above issues will be fully resolved and 800 USD Mn in the Bank. Sir Dar, I apologise if I even said something adverse about you in my dreams.
@abdussamad: It is easy to settle the conflict with in 24 hours, give them what they want and it will be settled , what they are looking for is a pound of flesh, and NS government needs the money so they will succumb to their pressure, unreasonable tactics, and demands and at the same getting the profits on agreed percentage but the full amount was never paid,so they should refund the excess profits they have received over the last 7 years. It is called they have us over the barrel. Mr. Dar should know that there is no such thing having good relation with UAE, it is all about money and business transaction so deal with it like it was agreed upon otherwise scuttle the deal , Pakistan is not some Banana Republic which could be pushed around by some ........................................ Don't' give away national assets by your whims.
Super dar to the rescue again.... Does he think he is a super hero?
Etisalat was last year kicked out of India due to its malpractices like paying bribes to certain parties for availing some concessions. India didnot take long, first it penalized it and then kicked it out. I donot know why Etisalat goes on doing such folly acts. A good step taken by the government of Pakistan.
This guy Dar is full of boasts. 10 days to fix the PTCL issue that has been dragging on for 7 years. 6 months to fix the entire economy. Next he'll promise to turn Pakistan into heaven on Earth within 1 year!
Does GOP really think, that they are in position to dictate, as too much money has already changed, for this to be a simple matter ! So grow up and acknowledge the facts as they are !
Etisalat should be told enough is enough.Pay up or cancel the deal due to 5 year default