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| August 21, 2006 | Monday | Rajab 25, 1427 |
Government accused of selling PECO through ‘back door’
ISLAMABAD, Aug 20: The opposition Pakistan Muslim League (N) has alleged that the government has sold a state-owned enterprise with assets of Rs20 billion through “back-door privatisation”.
Releasing a ‘fact sheet’, Mega corruption unlimited – Musharraf regime’s case of backdoor privatisation, at a press conference here on Sunday, PML-N information secretary Ahsan Iqbal said the government’s shareholding in the Pakistan Engineering Company (PECO) until recently was about 56 per cent and private shareholders and companies had the rest.
The government directly owned about 25 per cent shares, mainly through the Ministry of Industries and Production/State Engineering Corporation (SEC). Its remaining shares, about 31 per cent as on June 30, 2000, were held indirectly through government-controlled entities like the National Investment Trust (NIT), Investment Corporation of Pakistan (ICP), National Bank of Pakistan, State Life Insurance Corporation of Pakistan, Pakistan Re-Insurance Co. Ltd. and nationalised banks, including the United Bank and the Habib Bank.
Mr Iqbal said the Ministry of Finance had issued instructions to the NIT and the ICP on March 15, 2000, to consult the Privatisation Commission before divestment of shares in state-owned enterprises earmarked for privatisation so that the government’s plan to privatise them was not affected.
He said the NIT had mysteriously sold 1,179,530 shares and the ICP 25,900 shares to the general public through stock exchange without consulting the PECO or the Privatisation Commission, which had changed the ownership position of the PECO. He said the State Engineering Corporation, parent company of PECO, had taken up the matter with the NIT, which had failed to give any cogent reason for selling shares of PECO.
He said the Ministry of Industries had written to the Ministry of Finance on Dec 2, 2003, to look into the matter and instruct the NIT and the ICP to buy back the shares sold to enable the government to retain majority shareholding in PECO. He said it had been followed by more letters, memos and reminders, which had never been responded to.
He said the list of PECO directors as on May 11, 2006, had made it clear that the PECO had been sold to Arif Habib without the knowledge of the Privatisation Commission.
He said government nominated Mian Sohail Aslam and Imtiazur Rahman as directors and a third nomination was awaited. He said directors elected by private shareholders included Mohammad Arif Habib, Liaqat Mohammad, Mohammad Shabir Malik, Mohammad Iqbal, Mirza Mahmood Ahmad and Rashid Ali Khan.
Mr Iqbal said that only recently, the federal minister for privatisation and investment had stated in the National Assembly that the PECO was on the list of privatisation and its Kot Lakhpat works and Badami Bagh land would be put up for sale in near future.
He said no schedule had been announced for the sale of PECO, but its ownership had been given to the private sector.
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