ISLAMABAD, May 31: A Karachi-based businessman on Wednesday moved the Supreme Court alleging that one of the bidders in the privatisation process of the Pakistan Steel Mills (PSM) was involved in Rs18.2 billion fraud and unfair trade practices.

Advocate Ahmer Bilal Soofi told a nine-member bench, hearing a case against the privatisation of the PSM, that his client had filed an application to become a party in the instant case.

“I wanted to bring into court’s notice a number of civil suits worth Rs18.2 billion pending before the Sindh High Court (SHC) and an FIR in Lahore against Arif Habib Securities, a respondent in the case and a member of the consortium which purchased 75 per cent shares of the steel mills,” Mr Soofi said.

Moved under relevant Supreme Court rules along with Article 187 of the Constitution, Iftikhar Shafi, owners of the Diamond Industries alleged that the bidder was involved in massive manipulation, fraudulent activities, unfair trade practices in stocks business to fraud, deceit and manipulate investors, including him, in the Karachi Stocks Exchange (KSE) and Lahore Stock Exchange (LSE). However, due to his influence, Arif Habib managed to delay criminal investigations he was facing, he stated.

Ironically, despite privatisation Modes and Procedure Rules 2001, the Privatisation Commission (PC) failed to identify the background of the respondent in terms of litigation and claims pending against him, he deplored.

PC’s failure to carry out due diligence about the litigation background of Arif Habib, was a serious lapse that would put the respondent in-charge of a national asset against whom several allegations and investigations were pending, he pleaded.

Elaborating the nature of cases, he stated that a first information report (FIR) was registered against him in Lahore on May 26, 2003 under Sections 342 (punishment for wrongful confinement), 386 (extortion by putting a person in fear of death or grievous hurt), 409 (criminal breach of trust by public servant or by banker merchant or agent) and 509 (word, gesture or act intended to insult the modesty of woman) of the Pakistan Penal Code.

A civil suit for the recovery of Rs5.6 billion was pending with SHC. The case has been filed by Iftikhar Shafi.

Other suits of Rs1.7 billion and Rs10.9 billion were pending with same court. Cases were filed by M/s Shafi Chemicals and M/s Diamond Industries Limited, respectively.

A representation was submitted with the Securities Exchange Commission of Pakistan (SECP) on April 5, 2002 in addition to similar representations to President Pervez Musharraf and Prime Minister Shaukat Aziz.

Arbitration proceedings, ordered by the Punjab chief minister was also pending against the respondent besides inquiry reports were pending on August 31, 2000 KSE and June 14, 2002, LSE crash.

Acceptance of such a low bid of Rs21.68 billion for PSM, which is one of the largest steel makers in the South Asia having an annual production of 1.1 million tons, from a bidder having no financial market credibility in the steel manufacturing was startling, he contended.