ISLAMABAD: The Privatisation Board has exempted Reko Diq Project from privatisation under the amendment made in Second Schedule (Amendments to Laws) of the Foreign Investment Promotion and Protection (FIPP) Act, 2022 in Section 2 (i) of the Privatisation Commission Ordinance, 2000.
Well informed sources told Business Recorder that the amendment enacted in FIPP for amending the Privatisation Commission Ordinance has been legally interpreted to be holding the field of amendment in the Privatisation Commission Ordinance.
In Pakistan, on a couple of occasions, the Finance Bills have also carried amendments in other laws which were later turned down by the Supreme Court for the reasons that no other law such as levy-related law like EOBI could be amended by Finance bill which otherwise is tax bill and is far away from the analogy of levy which is covered by EOBI.
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In the case of Reko Diq, the FIPP has been used to amend the Privatisation Commission Ordinance 2000, which again may become a question of debate as to amend the Privatisation Commission Ordinance through special purpose law, i.e., the Foreign Investment (Promotion and Protection) Act 2002, the sources added.
The Privatisation Commission Board has also further authorized management of PC to send a letter to Reko-Diq Mining Company (Private) Limited to include following permission: (i) transfer of shares in the Company by the SOEs and Balochistan Mineral Resources Limited (BMRL) to Reko Diq Investments Limited (a company incorporated under the laws of Jersey); and (ii) creation of security over the shares directly or indirectly held by the SOEs, the GoB and BMRL in favour of lenders to the project.
Beside, the exemption exercise under the amendments in the PC Ordinance made vide Foreign Investment (Promotion and Protection) Act, 2002, the PC Board has also confirmed to the management of the Reko Diq that the project and transfers contemplated pursuant to the implementation of the project shall be exempt from the application of the Ordinance.
A professional conversant with the corporate affairs and laws is of the view that beside the tenability of amendment made in the Privatization Ordinance through the schedule in the FIPP Act 2002, the members of the Board have also conveyed the permission of transfer of shares in the company by the proposed SOEs and Balochistan Mineral Resources to the company incorporated in the laws of Jersey.
The Board has also conveyed permission to create security over the shares by taking funds/ loans from the lenders for the purpose of project. He said that beside legal tenability in respect of amendment of PC Ordinance 2000 through another law, the questions remain as whether the Board is also legally authorized to go beyond including allowing transfers of shares and allowing Reko Diq Management to take of loans by creating security over the shares of Reko Diq directly or indirectly.
Copyright Business Recorder, 2022
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