The proposed merger of Crescent Commercial Bank Limited (CCBL) with Pakistan Industrial Credit & Investment Corporation Limited (Picic) was ruled out by Altaf M Saleem, Chairman, at the Extraordinary General Meeting (EOGM) of Picic held here on Saturday.
The EOGM, however, approved the amalgamation of Picic Commercial Bank (PCBL) with Pakistan Industrial Credit & Investment Corporation Limited. Further, the shareholders also approved that the name of the new entity, after the proposed merger, would be changed to 'Picic Bank Ltd.'
Presiding over the EOGM he assured the shareholders that there was "no question of merger of CCBL" with Picic. Taking note of the strong views expressed by the shareholders against the merger at the meeting he made it known that there was no plan to merge the two entities. He further assured that as "directors, we will fully protect the interests and rights of Picic."
Tariq Iqbal Khan, Chairman & Managing Director, NIT, and Director, Picic, who conducted the proceedings most of the time, gave similar assurance. The main agenda of EOGM was approval of the scheme of amalgamation, change of Picic's name, alteration of Memorandum and Articles of Association, and disinvestment of shareholding in Picic Insurance Limited (PIL).
Commotion was set in when shareholders were invited to speak on the clause in the scheme that CCBL may also merge with Picic as per State Bank of Pakistan (SBP) directive. One of the leading shareholders, Abdul Salam, enquired as to what was the Crescent group, and why the necessity of merger with Picic? "What is the total holding in Picic of Crescent group and in CCBL? How many directors are common in Picic and CCBL? Does Altaf Saleem belong to Crescent Group?"
He said that Picic is a 50-year old institution, whereas CCBL is a failed institution and its total value has been eroded by 40 percent and is faced with many problems. He said that CCBL was paying a huge amount of about $600,000 to its Chief Executive Officer (CEO) which comes to about Rs 36 million. "We don't understand why a dying institution is contemplated to be merged with a sound entity ie Picic?" he said.
He said that since the time the word went round that pressure was mounting for the merger of CCBL with Picic, the share price of Picic has gone down from Rs 80 to Rs 53.
Shareholders Siddique Shujat and Farooq and many others raised voice against the merger proposal and also questioned the role of SBP and government in this connection. They went further and denounced the scandal of Crescent Standard Investment Bank Limited for keeping double books and off the book amount of over Rs six billion and report of A F Ferguson & Co.
At the point when the heat was on, Altaf Saleem intercepted to give assurance of "no merger" to cool down the tempers. On a query from a shareholder, Muhammad Ali Khoja, Managing Director, assured that Picic would make good profit in future.
About the divestment of Picic Insurance Limited, he said that 30 percent of PIL shares held by Picic and 70 percent distributed among the existing shareholders of Picic as a spice bonus/dividend.
The benefits of amalgamation scheme of PCBL and Picic were explained to the shareholders as under: The main objective of the scheme is to effect amalgamation in a manner that the entire undertaking of PCBL, including all the movable and immovable properties, assets and liabilities and all the rights and obligations of PCBL are transferred to Picic.
Picic is proceeding to complete all legal and regulatory requirements to give effect to the proposed merger in compliance with SBP's conditions and has endeavoured to complete the merger expeditiously. Picic will be shortly moving an application before the SBP for grant of a banking licence under relevant section of BCO.
After the proposed merger, Picic Bank is expected to emerge as one of the largest banks of the country, with total equity of around Rs 11 billion and total assets of nearly Rs 100 billion, with about 170 branches.