ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has said its suspicions have not been addressed about KE’s rights acquisition issue till date as neither KEL provided the updated status of Ultimate Beneficial Owners (UBOS) of KESP nor any regulatory filing/disclosure has been made by Shehryar Arshad Chishti indicating substantial acquisition of shares of KEL, well-informed sources told Business Recorder.
On June 10, 2024, SECP received a letterform the Special Investment Facilitation Council (SIFC) Secretariat wherein the Securities and Exchange Commission of Pakistan was required to submit a report on legality of shareholding of K-Electric Limited (KEL) to the Executive Committee (EC) of SIFC.
In this regard, by way of background, sources in SECP noted that in 2005, KEL was privatised to KES Power Ltd (KESP), a joint consortium of Al Jomaih Group (Saudi Based Group), Denham Investment Group (Kuwait based group) and others wherein 71.5% of the total issued voting shares of KEL were divested by Government of Pakistan (GoP) to KESP and 1.5% to others.
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At the time of privatization of KEL, Al Jomaih Power Limited (Aljomiah) held 60% shares of KESP whereas Denham Investments Limited (Denham) held 40% shares of KESP.
In 2008, Abraaj through IGCF SPV 21 (Abraaj Managed Fund) acquired 50% stake in KESP from Al Jomaih Power Limited (30%) and from Denham Investments Limited (20%) thereby indirectly acquiring 35.75% shares of KEL. As of date, IGCF SPV 21 holds 53.80% stake in KESP and indirectly holds 35.72% shares in KEL.
KEL, in an announcement of October 20, 2022 made on Pakistan Stock Exchange (PSX) disclosed acquisition of controlling stake in IGCF General Partner (IGCF GP or fund manager of IGCF LP) and limited partnership interests in IGCF LP (established in the Cayman Islands and registered as a Private Fund under the Private Funds Act, 2020) by Sage Ventures Group (Sage), a British Virgin Islands registered special purpose company wholly owned by Asia Pak Investments Limited.
However, no actual details were disclosed by KEL as to what percentage of voting shares of KEL have been acquired by Sage as a consequence of acquisition of controlling stake in IGCF GP and limited partnership interests in IGCF LP. As per the available information, IGCF LP is the parent entity of IGCF SPV 21 and holds 70.6% stake in IGCF SPV 21.
Subsequently, KEL made announcements on PSX on October 20, 2022 and October 24, 2022 respectively that Boudewijn Clemens Wentink, Khaqan Sadullah Khan and Sadia Khurram resigned as non-executive directors nominated by KESP on the board of KEL.
The said directors were representing IGCF SPV 21 on the board of KEL. The sources further stated that on a suit filed by Al Jomaih and Denham (“the Petitioners”), Sindh High Court granted stay order on October 24, 2022 restricting any changes in BoD of KEL.
Petitioner agitated the matter for not adhering to his rights and restrictions on transfer of KESP shares in privatisation agreement of 2005 and shareholder’s agreement of 2008. The stay order is operative till date.
SECP argued that due to suspicions of substantial takeover of KEL, it issued direction under section 125(d) of the Securities Act, 2015 on November 08, 2022 restricting any changes in the board of KEL.
The direction is operative till date. However, restrictions imposed through the subject direction do not apply on GoP and its nominees on the board of KEL. In this regard, Ministry of Energy (Power Division) has been apprised through a letter of April 09, 2024 on inapplicability of the subject direction on GoP.
Copyright Business Recorder, 2024
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