Govt allowed to proceed with sale of 10pc OGDCL shares

ISLAMABAD: The Supreme Court allowed the federal government on Friday to proceed with the sale of the Oil and Gas Development Company Limited (OGDCL) shares after overturning a Peshawar High Court (PHC) stay against the decision to sell off the government’s shares in the company.

A two-judge Supreme Court bench, consisting of Justice Ejaz Afzal Khan and Justice Gulzar Ahmed, granted an appeal filed by the federal government on Thursday, challenging the high court’s Oct 3 interim order to staying the sale of 10 per cent of the government’s shares in the oil and gas exploration company.

Know more: KP challenged OGDCL sale with ‘unclean hands’: centre

On Friday, the apex court asked the government, as well as the Privatisation Commission (PC), to accept bids, but not to transfer the shares until the court’s final decision in the matter. The case will again be taken up on Monday.

On Oct 3, a division bench of the PHC had issued an interim order on a challenge moved by the provincial government of Khyber Pakhtunkhwa (KP).

Earlier, the Cabinet Committee on Privatisation (CCOP) on Oct 3 last year and the PC on Jan 8-9 this year had decided to put on sale 10 per cent or 322 million ordinary shares of the government in OGDCL to international and domestic investors. The PC Board even approved the appointment of a consortium consisting of Messers Merrill Lynch International, Citigroup and KASB Bank to act as financial advisers for the transaction.

On Friday, Attorney General Salman Aslam Butt and Additional Attorney General (AAG) Waqar Rana appeared before the Supreme Court to argue the petition, jointly moved by the petroleum secretary, OGDCL and PC.

They argued that the KP government, challenging the privatisation process, had concealed important facts, ostensibly with mala fide intentions and thus invoked the discretionary jurisdiction of the high court with “unclean hands”, especially when it was not an aggrieved party.

The government’s appeal argued that the provincial government, while filing the petition in the high court, was legally obligated to implead the federal government as a party but had failed to do so, ignoring the fact that the decision of divestment of OGDCL shares was taken by the federal cabinet.

Published in Dawn, October 11th , 2014

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Comments (11) Closed

Yasir.

Oct 11, 2014 11:29am

What KP govt has to do with OGDC?. It has nothing to do with dhrana organisation sciences. Although OGDC is profitable, but privatization would increase profits as they are already hampered by political appointees by PPP who have formed Labour unions to avoid work so OGDC has to outsource its exploration work.

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Tariq Rashid

Oct 11, 2014 11:30am

Go ahead with the sale and save the money to foreign accounts for running your own business empires what a short-cut solutions to the problems Pakistan facing today, real strategists we have at the helm of affairs.....

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Amir

Oct 11, 2014 11:41am

good work PTI for filling against it. Pakistani people want opposition from you on these kind of matters instead of dahrnas and last year election. give gov a tough time on real issues plz

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mahmood

Oct 11, 2014 11:53am

This shows nothing but PTI's malafide intentions to go to any limit, hurting the economy and maligning everyone and everything with baseless accusations. This is an abuse of democratic and legal rights and PTI while commenting on the present system, itself is an abuser and beneficiary of the system too. IK n PTI supporters are not realizing their contradictions and want to have their cake n eat it too.

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rosy

Oct 11, 2014 02:12pm

shame on PTI for trying to stall progress in the country.

Recommend 0

Oct 11, 2014 04:37pm

This sale of shares of OGDCL is being mis-represented in some quarters as being a strategic sale. This is a sale of 7.5% of the Government's holding, with the government still retaining almost 68% of the holding. The objective of the Privatization programme is that 90% of the proceeds will be used for debt retirement while 10% will be used for poverty alleviation. Pakistani and foreign institutions will have equal opportunity to purchase these shares, so it is wrong to say that this is being sold to the foreigners at a throw-away price. The recent privatisation program has renewed the interest of foreigners in the domestic markets and OGDCL is part of this process. While someone might argue that this is illegal, please note that this transaction has been approved by all the stakeholders, including the KPK government which is part of of the Council of Common Interest. The proceeds from this Transaction are part of the revenue target of the government, and if this transaction does not go ahead, we might see another huge spike in the dollar rate.

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Realistic

Oct 11, 2014 05:23pm

@rosy What kind of strategy it is to sell only profitable institutions and burn billions on bailout packages for loss making PIA, Railways, Pak Steel......... Should not we get rid of companies costing millions to nation each day. Priority should be stop leakage before filling the the tank

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Mahmood

Oct 11, 2014 08:18pm

@Realistic Do you think with the evnironment prevailing in the country (PTI dharnas, conflict with India, challenge to the transaction in the court) any sane investor will come for a loss making or problem company. One should even thank if somebody comes to buy a profitable company with good valuation. I am a finance professional and can easily judge the consequences of factors listed above on valuation of the shares. There is nothing to gain out of it by PTI except to hurt the valuation and consequently to hurt the Pakistan and its people.

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AsR

Oct 12, 2014 12:15am

@Realistic Better to privatize the organization while in profit. Whenever a public sector organization is in profit, corrupt people are appointed to take the piece of cake by the influential people in power.

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Justice for all

Oct 12, 2014 12:24am

@Yasir. The KPK Government has to do with the selling of OGDCL,s assets because the company is extracting gas and oil from KPK.

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Mian Sadaqat Shah

Oct 14, 2014 10:32pm

What does privatization mean in real and Pakistan, respectively? In real terms and world of capitalism, privatization is to bring efficiency and professionalism to the organization. The other reasons presented for privatization are to drive out unnecessary labor force from the organization and hence generate massive profits and spur growth of the organization and economy, respectively. In Pakistan on the other end privatization means to sell-off national assets of strategic nature for filling foreign exchange reserves that are already under threat as the country has ballooning trade deficit and with nearly no inflows from foreign. It, the privatization, will provide temporary relief to the economy.

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