Although a total of about Rs 5 million, for three years, were paid to the National Insurance Company Limited (NICL) by the Corporate & Industrial Restructuring Corporation (CIRC), NICL did not honour its obligations arising in three cases of loss/theft. The issue was raised at the 18th meeting of the executive committee of the Board of Directors of CIRC held in Lahore last month and after discussing various aspects relating to the legal obligation, financial burden and ownership of the mortgaged assets, the committee advised the management to explore the legal possibility of getting insurance from other reputable insurance company.
The CIRC had obtained insurance cover from NICL for assets/Non Performing Assets (NPAs) acquired from different financial institutions as per NICL law which required all government owned entities to get insurance of its assets from the NICL.
In order to resolve the matter the chief executive officer of CIRC held a meeting with the chairman, NICL, chairman, Securities and Exchange Commission of Pakistan (SECP), secretaries Commerce and Finance, DIG and IG Police, Punjab. In addition, an option of legal recourse was also discussed with the Secretary Finance and on his advice a reference was sent to the Attorney General of Pakistan to resolve the matter.
The matter of change of insurance company vis-à-vis the legal compulsion was also discussed in the 60th administrative committee meeting in which it was recommended to the Board for the change of insurance company.
The matter was brought for the consideration of the executive committee as the annual insurance policy with NICL had expired and required renewal.
The committee reviewed and wherever found proper recommended following settlement cases to the CIRC board.
In case of Tanya Knitwear (Pvt) Ltd, it was noted that though the CIRC settlement scheme had expired yet considering that the obligors of Tanya Knitwear had, within due time, applied for settlement and keeping in view the legal complications and revival of industry recommended this case to the CIRC Board for formal consideration and resolved that: the settlement offer of Rs 18.5 million payable in 90 days, submitted by the obligors of Tanya Knitwear for full and final settlement of their liabilities be recommended for the formal consideration of the Board.
In the case of Multan Woolen Spinnery (Pvt) Ltd, the committee after reviewing the case unanimously decided to adhere to the decision already taken by the Board meeting and advised the management to give one more opportunity to the obligor to settle his liabilities as per CIRC terms and conditions. The CIRC Board approved the settlement at the offered amount of Rs 20 million.
About Margalla Dairies Limited, the committee resolved the settlement of liabilities for a consideration of Rs 29.221 million, provided the obligors confirmed to pay within 90 days and recommended for formal consideration of the Board.
The committee after thoroughly deliberating on legal aspects and offer submitted by the obligor, International Ceramics Limited (ICL), advised the management to represent the case after re-negotiation with ICL obligors for total settlement of package of HBL & IDBP claims with the essential condition of withdrawal of ICL challenge in the High Court against CIRC acquisition of the IDBP liabilities. ICL was transferred to CIRC by HBL (reportedly 2nd charge holder) and IDBP (reportedly 1st charge holder).
In case of Taj Printing & Packaging (Pvt) Limited, it was decided that the write off request, as per the direction of the office of the prime minister of Pakistan, may be recommended to the Board for appropriate decision.
The request of the obligors Simnwa Polypropylene Limited to write-off the decreed liabilities of more than Rs 35 million against nil financial consideration was rejected.
The committee also reviewed the transfer back request of following NPAs from the financial institutions, Mandviwalla Mauser Plastic Industries Limited and M.L. International (MLI) (Pvt) Limited. Whereas the committee decided not to return the case of Mandviwalla to IDBP and advised the management to deal further with this NPA including the possibility of direct settlement with the obligors, it rejected the transfer back of MLI to HBL.