ISLAMABAD: Amid suspicion of foul play, a parliamentary panel has decided to launch an investigation over the government’s decision to sell Heavy Electrical Complex (HEC) to an apparently dubious company that eventually defaulted on the Rs250-million payment.
The Senate Standing Committee on Finance and Privatisation on Thursday set up a four-member special panel that would probe how Cargill Holdings Limited - the potential buyer of HEC - was allowed to bid despite having questionable credentials.
It will be the first such investigation of a privatisation transaction conducted by the PML-N government in its third stint. The standing committee also took up the issue of MCB Bank, which had been privatised during the first tenure of the PML-N government.
Read: The Habib Bank privatisation
Senator Saleem Mandviwalla, the chairman of the standing committee, expressed his shock over the government’s decision to sell HEC to a company that had neither sufficient capital nor any business presence in Pakistan.
The HEC is spread over 72 acres of land and manufactures transformers.
The government wanted to sell the HEC at any cost to avoid further losses, said Privatisation Commission Chairman Mohammad Zubair.
The government had sold the HEC to Cargill Holdings Limited - a company that was registered in Kenya on December 10 - a day after the government re-initiated the HEC privatisation process.
The transaction could not be completed after the buyer defaulted on Rs225 million payments. The Rs225-million cheque got dishonoured.
The fact that Cargill Holdings Limited was registered in Kenya a day after the government decided to re-initiate the process of HEC privatisation should have been a red flag, said Senator Mohsin Khan Leghari.
Leghari also came hard on Zubair for taking the committee business “non-seriously”. It is not a political talk show, Senator Leghari reminded Zubair.
Zubair refused to take any responsibility of pre-qualification of the Cargill Holdings Limited, saying it was the collective decision of the transaction committee, endorsed by the PC board.
The standing committee also decided to summon the officials of National Accountability Bureau (NAB) for not cooperating in the investigation of MCB privatisation deal. Senator Saeed Ghani of PPP has raised transparency concerns in the deal.
State Bank of Pakistan Governor Ashraf Wathra told the committee that the NAB had returned the MCB privatisation record on the pretext that it has not been authorised to take over the record from the central bank.
Read: Treasury bills, PIBs: 12 banks chosen by SBP to be primary dealers
However, Wathra said during a privileges committee meeting, it had been decided that the record will be handed over to NAB for further action.
The standing committee again refused to clear the Credit Information Bureau Bill in its present form. It decided that the Bill will be passed with certain amendments, which will effectively block its approval in the near future.
After amendments introduced by the Senate, the Bill will again go back to the National Assembly Standing Committee on Finance for a review.
Published in The Express Tribune, July 3rd, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ