ISLAMABAD: The Islamabad High Court dismissed an appeal of the Cargill Holding Limited (CHL) on Friday against the privatisation of the Heavy Electrical Complex (HEC), thus paving the way for the federal government to sell it.

An IHC division bench comprising Justice Noorul Haq N. Qureshi and Justice Aamir Farooq dismissed the petition.

Cargill Holding, a division of the Cargill Progressive Group, cited federation of Pakistan through the cabinet division, the Privatisation Commission (PC) and the State Engineering Corporation (SEC) as respondents.

As per details of the case, the PC had invited the expression of interest from interested parties in which pre-qualified parties were required to deposit Rs25 million as earnest money by March 4, 2015.

However, out of three pre-qualified parties, only CHL deposited the money, and it was, therefore, allowed to proceed in the transaction process by the board of Privatisation Commission (PC board) under Rule 6 of the commission.

The Cabinet Committee on Privatisation (CCOP), after considering facts and recommendations of the PC board, approved the HEC privatisation on conditions that the CHL would assume all current and future liabilities of the complex and it would be responsible for taking up all liabilities pertaining to the gratuity and provident fund of the HEC employees.

The final sale consideration was Rs1,095 million, including assumption of all current and future liabilities, and cash payment of Rs250m by the CHL to the government.

Consequently, on April 6 a letter of acceptance (LOA) was issued to the CHL under which it was required to execute the share purchase agreement (SPA) and make payment of Rs225m within 45 days of issuance of the LOA.

The government cancelled the deal with the CHL after it failed to meet mandatory requirements, including payment of the remaining amount in accordance with the deadline given in the LOA.

The CHL filed a suit against the government’s decision in the IHC on June 17 and the court issued a stay order, but later dismissed the CHL petition.

The CHL went into appeal before a division bench of IHC which granted it a stay order on June 30. But after hearing both parties, dismissed the CHL appeal.

Published in Dawn, November 28th, 2015