PC out to hunt defaulting buyers of state enterprises

Privatisation Commission to approach investigative bodies for recovery of Rs4 billion worth of dues

ISLAMABAD: The Privatisation Commission Board decided on Tuesday to approach investigative bodies for the purpose of recovering Rs4 billion outstanding dues from defaulting buyers of state-owned enterprises (SOEs). This decision comes after all the past attempts to recover dues have failed, partially because of connivance of commission’s officials.

Headed by Privatisation Minister Muhammad Mian Soomro, the board also set up a committee to finalise a plan by mid-December in a bid to recover the dues in these cases. Presently, the dues in 14 privatisation transactions are outstanding.

The chairman directed the committee to leave no stone unturned to recover the outstanding amount from the buyers of the SOEs that were privatised in the 1990s, according to a handout that the commission issued after the board meeting. Approximately Rs3.94 billion is yet to be recovered from defaulting buyers of various enterprises, it added.



The chairman further ordered to fix the responsibility and approach all relevant investigative bodies to inspect the truth and rectify the problem, stated the commission.

The Privatisation Commission has suspended one of its officials recently who allegedly colluded with a private party, said sources in the commission.

The receivables included balanced sale price, loans and advances by the government to these sold enterprises and interest charges on delayed payments. Out of nearly Rs4 billion, the balanced sale price is Rs1.2 billion including principal amount of Rs120.3 million. A major chunk of Rs2 billion was outstanding on account of advance loans given to these SOEs.

The amount is due in 14 cases but the commission has sought the directions of Privatisation Commission board in only half a dozen cases. “The commission informed the board that Rs526 million were due against Schon Group on account of sale proceeds of Pak China Fertilizer Limited, Quaidabad Woollen Mills Limited and National Fibers Limited,” the sources stated.

Over two years ago, the Privatisation Commission board approved a settlement plan but it could not be implemented, the sources said.

In January this year, the Privatisation Commission issued final notice to all the defaulters for payment of the outstanding dues. Schon Group showed willingness to repay the outstanding amount in tranches but no settlement could be reached, the officials added.

The Crescent Factories Vegetable Ghee Mills were sold to Javed Rafi of SJ Industries in 1993 for a price of Rs63 million. Due to non-payment of principal amount of Rs20 million, Rs94.8 million are still outstanding against SJ Industries. In this case too, the buyer agreed to pay the dues last month but the matter remained unresolved after it demanded withdrawal of the recovery suit, said the sources.

Mohammad Usman still owed Rs260.2 million on account of balance of Pioneer Steel Mills Limited even after 26 years of its privatisation, the commission informed the board. The Privatisation Commission is already in litigation against the buyer. However, a recovery suit filed in 2008 was dismissed by the Islamabad High Court in 2016.

The court directed the commission to provide an opportunity of hearing to the buyer but the matter remains pending, the sources said.

An amount of Rs117.8 million is also outstanding against Malik Naseer and Associates in Haripur Vegetable Oil processing industries privatisation that took place in 1992.



The board setup the committee comprising of officials from the commission and the private sector members to find a way out in all these six cases, the sources said.

In addition to that, dues are also pending in eight other cases. Reyaz Shaffi still owed Rs147.4 million in Pak PVC company privatisation case. The Sindh Alkalis EMG owed Rs129.2 million in its privatisation. Bibojee Services Private Limited owed Rs31 million in National Motors Privatisation case to the government.

The Tawakkal Group owed Rs73.7 million in Balochistan Wheels privatisation, Awan National Cement did not pay Rs57.2 million in National Cement Dandot privatisation and Friends Vegetable Ghee company owed Rs50.2 million in Haripur Vegetable Ghee Oil case privatisation, the sources said.

The PML-N government had also made attempts to recover the dues but no headway could be made.

Published in The Express Tribune, October 31^st, 2018.

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