KARACHI: K-Electric has appointed Ikram Sehgal as its new chairman with immediate effect in a bid to accelerate the long pending sale of its majority stake to China’s state-owned Shanghai Electric Power by the crisis-hit Abraaj Group.
The development in which Sehgal succeeded the former chairman, Tayyab Tareen, who remained in place for just seven months, came at a time when Shanghai Electric’s delegation was due to visit Pakistan in the next two to four days, The Express Tribune learnt.
“Tareen’s presence on K-Electric’s board of directors reflected conflict of interest as he was simultaneously a director on the KES Power (K-Electric’s holding company) board, which was dealing with Shanghai Electric Power,” a K-Electric director disclosed.
The authorities wanted that “there should not be any conflict of interest in the deal,” he said. “Now, he (Tareen) is free to concentrate on the sale transaction.”
To recall, the stake sale has been pending for around 27 months since the new buyer and seller sealed the deal at a price of $1.77 billion in October 2016. It was due to delay in acquiring approvals from Pakistan’s regulatory authorities.
The sale price was, however, set to be revised downwards by an estimated 15-20%, an official involved in the transaction claimed recently.
The major reason behind the revaluation is that the power-sector regulatory authority has revised down the end-consumer tariff.
When The Express Tribune asked Sehgal how his appointment may accelerate the K-Electric’s stake sale, he replied “Not my hiring, but the newly installed government has put things on a fast-track.”
“I cannot give you timelines when Shanghai Electric Power will take over K-Electric,” he added. “There is light at the end of the tunnel…It may take anywhere from three to four weeks to three to four months.”
The China-based power firm’s delegation will discuss the commitment to make an investment of $10 billion after taking over K-Electric.
“The new investment will help fix infrastructure problems and also increase power generation in the face of rising demand due to growth in the large-scale manufacturing sector,” Sehgal said.
The other issues remaining to be fixed are overcoming the gas supply problem with Sui Southern Gas Company (SSGC) and providing the committed voltage to the end-consumers, including the commercial and industrial sectors.
He emphasised that every challenge was an opportunity for him. “I am confident I would transform the challenges into opportunities of improving the quality of electricity and addressing citizens’ miseries,” he said.
Pakistan may soon clear K-Electric’s sale
Abraaj founder to return
Sehgal was of the view that the founder of Dubai-based Abraaj Group, Arif Naqvi, “will stage a comeback in six months to one year.”
To recall, the delay in completion of K-Electric’s sale to the Chinese buyer remains one of the leading causes why Naqvi filed for provisional liquidation of Abraaj.
There was no doubt that Naqvi had went through a mega crisis, but “Dubai-based cases have been settled now”.
A K-Electric’s statement said, “Ikram Sehgal succeeds Tayyab Tareen who resigned from the role today (Friday).”
Tareen served in many roles during his 10-year association with K-Electric including as CFO before being appointed CEO in 2014.
K-Electric’s performance improved in FY17: Nepra
“The board of directors is confident that Ikram Sehgal, with his proven track record of accomplishments, will bring a wealth of knowledge and valuable experience to the position,” it said.
Published in The Express Tribune, January 19th, 2019.
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