Finance Minister Ishaq Dar has set a 10-day deadline to resolve all outstanding issues with Etisalat, which has delayed payment of the remaining amount of $800 million for purchase of shares in Pakistan Telecommunication Company.
Dar has directed the Privatization Commission to settle the disputes that have hampered the transfer of properties belonging to PTCL and remove all hurdles within 10 days, according to the Finance Minister’s Office.
The deadline has been set in an effort to swiftly bring to an end the seven-year-old row.
“We need to think out of the box and move on a fast track,” Dar said. The directive was given in a meeting between Dar and an Etisalat delegation. The delegation comprised PTCL President and Chief Executive Officer Walid Irshaid, CEO-Asia Etisalat Jamal Jarwan and Etisalat Chairman Abdul Rahim Nooryani.
Etisalat had bought a 26% stake in PTCL along with management control at a price of $2.4 billion. However, it withheld $800 million on the grounds that grey traffic was hurting the company’s business and because of a dispute over transfer of 131 properties.
The main dispute is over Defence Housing Authority (DHA) property in Karachi, whose value is said to be in billions of rupees.
The government has anticipated in the budget for the fourth consecutive year that it will get $800 million from Etisalat and any further delay may create problems at a time when the country is entering into a fresh bailout programme with the International Monetary Fund (IMF).
Dar reiterated the government’s desire that the matter should be resolved in the spirit of brotherly relations between Pakistan and the UAE.
Market sources say Etisalat is taking profits on 26% shares but has actually paid less, raising questions over legality of the transaction. Sources were of the view that if the disputes between the two parties lingered on, the government of Pakistan may take some action.
However, before that it will again use the diplomatic channels as the PML-N government is said to have good relations with UAE rulers.
According to sources, Nooryani told the finance minister that they had come to this meeting with full confidence, believing transparency, merit and sincerity were the hallmarks of this government.
Dar apprised the delegation of the financial situation in Pakistan, saying this required an early settlement of the longstanding issues, so that the country could ease the pressure on its foreign exchange reserves.
He said the government was seeking a fair, transparent and equitable resolution based on established commercial rules as this was a commercial transaction.
Etisalat’s executives said they had been making serious efforts over the last seven years to get the titles of 131 properties transferred after which the outstanding payment could be made, according to an official handout issued by the FM Office.
Unfortunately the issue of properties had remained unresolved until now, they said.
Dar asked the delegation that issues pertaining to properties would be resolved and he would take personal interest in the matter. The delegation also invited the finance minister to visit UAE, which he accepted.
Published in The Express Tribune, July 6th, 2013.
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