KARACHI, April 19: Al-Mal Corporation Limited has signed an agreement with Jahangir Siddiqui and a new board of directors for sale of 4 million shares along with total change of corporate control of the Al-Mal Corporation.

Al-Mal Corporation Limited is the management company of two modarabas listed on the stock exchange: Modaraba Al-Mali and Modaraba Al-Tijarah. With the acquisition of Al-Mal Corporation, Jahangir Siddiqui group, which is believed to have plans drawn out to enter into Islamic banking, would have made its foray into the modaraba sector.

The group already holds controlling stakes in ABAMCO-the second largest asset management company in Pakistan; Jahangir Siddiqui Investment Bank (formerly Citicorp Investment Bank)-the country's largest investment bank and Jahangir Siddiqui Capital Markets-one of the leading securities and investment banking firm.

In a notice released to the Karachi Stock Exchange on Monday, the Al-Mal Corporation Limited said it was giving out the material information in compliance with Clause XXIII of Code of Corporate Governance.

The decision of sale of controlling stake along with transfer of management of the Modarabas to Jahangir Siddiqui and directors was understood to have been taken pursuant to a resolution passed at the meeting of the board on April 13.

According to the Modaraba Association of Pakistan's year book 2002, Al-Mal Corporation was established in 1986 by a group of experienced bankers. In 1987, the company floated its first leasing venture- Modaraba Al-Mali-as one of the pioneering Modarabas to undertake leasing business on the principles of Islamic Sharia.

Up to end of June 2002, Modaraba Al-Mali had written over 1500 leases at the prime cost of over Rs1 billion. For 2002, Modaraba had made net profit of Rs27.9 million; held Rs215.2 million in total equity and Rs324.3 million in total assets. Certificate holders were paid dividend at 12.5 per cent for 2002 and 16 per cent for 2003. Modaraba Al-Tijarah was launched purely for the purpose of trading and manufacturing in 1991.

According to the Modaraba Association year book, the first few years of Modaraba Al-Tijarah were very profitable, paying good dividends. The Modaraba has paid-up capital of Rs75.8 million.

Modaraba Al-Tijarah is quoted at Rs5 and Modaraba Al-Mali carries price tag of Rs12.70, making it one of the dozen modarabas from among the 33 modarabas listed on the KSE that carry premium in their market prices.

The proposed new board of directors of Al-Mal Corporation would comprise Mr Jahangir Siddiqui; Mr Kamal Afsar; Mr Tariq Usman Bhatti and Mr Hasan Aziz Bilgrami. In the notice issued on Monday, Al-Mal Corporation Limited stated that the change of management was subject to the written consent of Registrar, Modarabas SECP.