KE exits Al Jomaih Power lawsuit

SECP directive and ongoing court stay continue to bar changes to board composition

ISLAMABAD:

K-Electric (KE) Limited has disclosed that it is no longer a party to a key legal case following the withdrawal of claims by Al Jomaih Power Limited and other plaintiffs, and the dismissal of all related proceedings by a Karachi court. Despite this legal relief, the company remains unable to hold board elections due to continuing judicial restraints and a standing regulatory direction issued by the Securities and Exchange Commission of Pakistan (SECP).

In a material information disclosure submitted to the Pakistan Stock Exchange (PSX) and the SECP on January 26, 2026, KE stated that the senior civil judge, Karachi South, through an order dated January 23, 2026, allowed the withdrawal application filed by Al Jomaih Power Limited and other plaintiffs in Civil Suit No 1566 of 2025. Consequently, the suit against KE and all pending applications were dismissed as withdrawn and declared infructuous. The company confirmed that it now stands discharged from those proceedings. However, the broader legal context remains complex. While Al Jomaih Power Limited withdrew its claims against IGCF SPV 21 Limited, Alvarez & Marsal, KES Power Limited and KE, the stay obtained by Al Jomaih continues to operate against the National Electric Power Regulatory Authority (NEPRA), the SECP and the Power Division, keeping key regulatory aspects of the dispute alive.

The litigation had been closely watched due to its potential implications for governance and control at Pakistan's largest power distribution company. However, legal experts caution that the development does not translate into immediate governance flexibility.

According to a legal expert familiar with the matter, K-Electric remains a party to a separate, similar case pending before the courts, in which it is expressly barred from making any changes to the composition of its Board of Directors. In addition, a direction issued by the SECP prohibiting any change in the board's composition remains in effect.

The SECP direction was issued on November 8, 2022, under Section 125 of the Securities Act, 2015, directing that the board's composition "shall not be changed whatsoever, till further orders of the Commission." The restriction followed concerns over changes in indirect ownership and control, particularly involving KES Power Limited and the acquisition of controlling interests by Sage Venture Group.

As a result, board elections at KE are unlikely to take place anytime soon. KE did not respond by the time of filing.