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SC decision on Steel Mills privatisation

June 23, 2013

A FEW days back a small report, which is a big commentary on the working of our judicial system, appeared in newspapers.

It was reported that the Supreme Court of Pakistan has rejected the review petition filed against the judgment of the Supreme Court given in 2006 against the privatisation of Pakistan Steel Mills.

First, it is beyond comprehension why it took the Supreme Court seven years to decide the review petition in an important case. If it had been taken at the earliest with the possibility of the court being convinced by the petitioner’s arguments, Pakistan Steel as well as the country could have been saved from the disastrous consequences that followed the judgment.

A similar decision now would have been of no consequence. The judgment had a far - reaching negative effect on the investment climate, as well as on the economy of the country.

It showed our institution’s lack of understanding of the matters -- strictly not part of their expertise and still their inclination to enter these uncharted waters – some time causing a great loss to the country.

The fact that Pakistan Steel was earning huge profits before the judgment but became practically bankrupt forcing the government to pump in huge amounts of money continuously indicates the rationality of the privatisation decision and glaring flaws in the reasoning of the judgment.

Economic decisions are made keeping in view short-term and long-term policies, keeping in view the prevailing conditions and priorities, and it is the right of the governments to take such decisions.

The Supreme Court in its judgment held that the entire disinvestment process of the Pakistan Steel Mills reflected a haste, ignoring profitability aspect and assets of the mills, by the financial adviser before its evaluation.

The transaction was the outcome of a process reflecting procedural irregularities. There is a big difference between irregularity and illegality. While a procedural irregularity is curable, an illegality is not. The procedural irregularities, if any, as pointed by the court could have been ordered to be rectified as later done in the LNG case instead of quashing the privatisation.

It is time everyone learned from mistakes instead of being carried away by accolades to be received or stamp of power being authenticated. Let not the pendulum swing from one end to the other.

We must remember the consequences of meddling by the executive in matters relating to the judiciary in the past. It is the responsibility of civil society to remain vigilant, speak out and act immediately instead of remaining embroiled in the past. Today is a new day with new challenges.