No party is willing to take over the trouble-ridden Bank of Khyber despite the passage of more than one-and-a-half years since the decision by the Khyber-Pakhtunkhwa cabinet that the administrative control and position of managing-director will be handed over to a party that will have 26 per cent shares.
The bank has been operating in loss and its sale is under consideration.
The decision to hand over the bank to a party holding 26 per cent of its shares was taken back on 26 December 2009. Fifty-one shares of the bank are owned by the provincial government while the rest is with private companies. The bank had a target to raise its paid-up capital to Rs8 billion by December 2010, but was only able to reach Rs5 billion. The figure is reduced further by Rs600 million taking into account losses.
The provincial government had contributed Rs5 billion as help and the State Bank of Pakistan gave a grace period to reach the target of Rs8 billion. However, not a single party came forward to vie for the 26 per cent share on offer as most of the 54 branches are said to be running in a loss.
It is learnt that the highest proportion of shares owned by a single party was 14 per cent - held by Candyland, which then also purchased the shares of a renowned Karachi-based businessman Aqil Dhedi, takings its total ownership to 20 to 22 per cent. But it is still not in a position to secure administrative control of the bank.
Germany and World Bank held shares in the bank during the 2002 Muttahida Majlis-e-Amal (MMA) government era. Though the two insisted that the government should give administrative control to a private company, the then government did not agree to this condition. Subsequently, both withdrew their shares as a result of the disagreement. Their shares were sold to other companies later.
Published in The Express Tribune, June 2nd, 2011.
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