The Privatisation Commission (PC) is hiding facts or not getting its facts right on Dandot Cement Company Limited (DCCL) which has been given special favour by the ECC.
The ECC in its meeting on August 24, 2004 decided that the delayed payment charges/ interest of Rs 87.837 million be waived off in line with ECC''s earlier decision regarding Wah Cement Company Ltd and Zeal Pak Cement Company Ltd.
It had also been decided that the payment of remaining amount of Rs 132.44 million (Rs 220.270-Rs 87.837) be allowed in ten equal half-yearly instalments effective from July, 2004 along with total mark-up @ 14 percent annually (mark up 11 percent and exchange risk fee @ 3 percent) but the buyer would be required to provide bank guarantee for the outstanding loan amount, as acceptable to EAD.
However, the ECC set a condition that the facility would become available, after 5 years, when the proposed ten six monthly instalments of the remaining amount of loan, along with mark up @ 14 percent are paid by the company and if there is any further default, this write off would not be available.
PC, in its clarification has termed the report baseless and misleading. According to the PC spokesman the factual position is that 80.67 percent shares of DCCL were sold to Employees Management Group Dandot Cement Company Ltd for Rs 636.687 million in May 1992.
The buyer paid the full sale price within the scheduled time. It is therefore incorrect to say that DCCL had defaulted on the payments to Privatisation Commission.
Officials documents made available to Business Recorder prove that DDCL stopped payment of foreign loans after September 1996 and EAD encashsed bank guarantee provided by the buyer and obtained Rs 1334,764 million from the HBL on September 22, 2000.
Even after encashment of bank guarantee, an amount of Rs 220.270 million including interest and exchange risk fee was outstanding against DDCL on June 30, 2003. Thereafter DCCL has been making regular payments of the outstanding amounts according to the revised repayment schedule, he said.
The spokesman further said that insofar as the condition of bank guarantee is concerned, DCCL offered to create second charge on the fixed assets of the company in favour of EAD in lieu thereof on the plea that it was not affordable by them to manage margin money and pay additional charges for the bank guarantee.
He added that the Privatisation Commission in consultation with the EAD, Ministry of industry & Production and Special Initiatives and Finance Division examined the proposal in detail.
All concerned agreed to the proposal. Finance Division however added the condition that no further charge would he created on these assets, the spokesman claimed. Interestingly, the spokesman hides the fact that Finance Ministry had agreed to the proposal regarding creation of second charge in lieu of bank guarantee. But the PC recommended to the ECC for waiver from bank guarantee.