ISLAMABAD, June 18 The merger of Emirates Global Islamic Bank Limited (EGIBL) with Al-Baraka Islamic Bank has been challenged in the Sindh High Court (SHC) on the ground that the latter has not cleared the payments of its Pre-Initial Public Offering investors.

The court issued notices to EGIBL and the State Bank in the case after preliminary hearing on Friday.

Faisal Vawda, proprietor of Faisal Vawda Group (FVG), in his petition argued that Emirates Financial Holding, the parent company of EGIBL, had induced the group to make investment into shares of EGIBL. Emirates Financial Holding had offered sale of 24 million non-listed shares of the EGIBL as Pre-IPO. The shares were offered at premium value of Rs12.50 each. The sale price was fixed at Rs300 million.

The FVG accepted the offer for purchase of shares and paid a sum of Rs60 million as part payment. The balance payment of Rs240 million had been adjusted against the property bearing No. 24-C, Phase-V Khayaban-i-Tanzeem, DHA, Karachi.

The bank failed to transfer the 24 million shares to FVG and deprived him of financial entitlements and legitimate monetary benefits arising out of contractual commitments agreed upon amongst the parties.

The petitioner also accused EGIBL of creating purported loans against the FVG.

He has also made SBP a party in the case for violating of banking rules by allowing the EGIBL to merge with Al-Baraka Bank, despite the shareholders, who have voting rights, had opposed the merger. The SBP failed in protecting and safeguarding the interests of the depositors, account holders as per its mandate, the petitioner alleged.

The shareholders had also submitted a complaint to SBP against the misappropriations by the EGIBL management, but the regulator didn't initiate any inquiry on the complaint and issued the NOC for the merger.

Petitioner prayed to the court to issue stay against prospective merger of the EGIBL and Bank Al-Baraka.