Agreement with Chinese firm: SHC directs K-Electric to submit sale deed for second time

Bench questions additional attorney-general's plea to represent Chinese firm

KARACHI: The Sindh High Court (SHC) once again directed K-Electric (K-E) on Tuesday to submit the agreement regarding the sale and purchase of the power utility to a Chinese firm.

A two-judge bench, comprising justices Nadeem Akhtar and Faheem Ahmed Siddiqui, also directed the additional attorney-general to satisfy the court on how he could represent the private foreign firm, Shanghai Electric Company.

Meanwhile, the bench repeated notices to the Shanghai Electric Company through the Chinese embassy in Islamabad to file comments regarding the purchase of the power utility.



A group of non-profit organisations had approached the court seeking an inquiry into the facts and issues relating to K-E through appointment of an independent judicial commission.

Earlier, Advocate Irfan Munawar Gill undertook to file his power of attorney and comments on behalf of the National Electric Power Regulatory Authority (Nepra).

Advocate Amel Kasi informed the court that Advocate Arshad Tayeballey will file power of attorney on behalf of K-E. Allowing their requests, the judges directed Tayeballey to file comments on behalf of K-E by the next hearing date. "K-Electric is directed once again to place on record the sale and purchase agreement with Shanghai Electric Power Company Limited," they ordered.



The additional attorney-general, Salman Talibuddin, maintained he will file comments on behalf of the federal ministries of water and power and law.

In a surprising move, he informed the court that he will also be representing the Chinese company as well.

The petitioners' lawyer, Faisal Siddiqui, raised objection to this, arguing that the additional attorney-general cannot represent the private respondent.



Therefore, the judges directed the federal law officer to satisfy the court as to how he could represent the private respondent in the case in which he was already representing the federation.

They repeated notices to the Shanghai Electric Power Company through a courier service as well as the Chinese embassy in Islamabad.

Meanwhile, the bench also repeated notices to the National Accountability Bureau and the Federal Investigation Agency as comments were not filed by them despite issuance of notices on the previous hearing.



Case history

The petitioners, including Karamat Ali, Nazia Fida Hussain, the Pakistan Institute of Labour Education and Research, Urban Resource Centre and others, had approached the court, alleging that the respondents, including the ministry of water and power and Nepra, had utterly failed to investigate issues such as overbilling by the K-E management to the tune of Rs62 billion in a few years and unpaid dues of K-E regarding various federal government entities.

They alleged that the authorities had also failed to probe the use of K-E's metering or billing system and Nepra's failure to resolve the pending disputes before the transfer of the indirect shareholding and accounts of K-E to the Shanghai Electric Company Limited.

The petitioners contended that the authorities had also failed to investigate K-E's agreement to sell up to 66.4% of its shares to the Shanghai Electric Power Limited, a company incorporated under the law of China, subject to the terms and conditions signed between the two parties, which had not been disclosed to the public.



To support their argument, the petitioner's lawyer, Faisal Siddiqui, placed on record a January 26, 2017, letter issued by the ministry of water and power to Nepra advising it to take into consideration the matters highlighted in the letter, while setting the new tariff for K-E by correcting anomalies in the new tariff and ensure transferring excessive payment recovered by the power utility back to the consumers.

Siddiqui contended that the ministry's letter was responded to by Nepra by denying the allegations made against the power utility and defending its new tariff.

The lawyer alleged that Nepra, being a regulatory authority, was not acting in a proper and prudent manner and was not exercising its functions and powers as it ought to have taken timely action against K-E in order to save consumers from arbitrary and excessive billing.



The petitioners pleaded that the only solution for a proper inquiry into the illegal affairs of K-E and to provide relief to the innocent consumers was the appointment of an independent judicial commission. Therefore, the court was pleaded to order a judicial inquiry into the issues through a serving superior court judge.