The Monopoly Control Authority (MCA) has recorded statements of cement manufacturing companies of Karachi on oath to conclude the inquiry pertaining to price hike in February 2007. Sources told Business Recorder that cement companies in Karachi have provided the relevant information relating supply, production and capacity utilisation etc to the MCA.
According to the MCA announcement on Thursday, the authority summoned the chief executives of cement producing companies and stake holders, for examination on oath, under the provisions of clause (a) of sub-section(1) of Section 15 of the MRTPO, 1970 on special enquiry under section 14 of the Ordinance, conducted upon a reference made to it by the federal government. The authority heard the chief executives of the undertakings at Karachi on August 21-22.
The hearings were held in the authority's camp office, located at 5th Floor, State Life Building No 2, Wallace Road, off: 1.1. Chundrigar Road, Karachi. Both the members of the authority, chiefs investigations and economic research and registrar were present.
On August 21, Wali Bhai Patel, President Karachi Cement Dealers Action Committee (KCDAC) and Javed Ali Khan, Chief Executive, Pioneer Cement Ltd, appeared before the authority and recorded their statements on oath. Nusrat Mirza Chughtai, Vice President, Association of Builders and Developers (ABAD) also appeared before the Authority but he was informed that the President of the Association was summoned to witness on oath and not the Vice President. He explained the unavoidable personal reasons for non-appearance by the President of the Association to the satisfaction of the authority. The MCA, therefore, decided to hear him on August 22.
On August 22, M.A. Jamil, Chief Executive, Zeal Pak Cement Factory Ltd, Muhammad Ali Tabba, Chief Executive, Lucky Cement Ltd and Hafeez-ur-Rehman Butt, President, Association of Builder and Developers (ABAD), appeared before the authority and recorded their statements on oath.
The authority also heard the following cases, on August 21 and 22, 2007, under the Chairmanship of Khalid A. Mirza. The MCA also heard the case of My Bank Ltd in the matter of undue concentration of economic power. The authority will pass an appropriate order giving the individual a responsible time for reducing shares holding of this bank.
According to the authority, any individual who holds or control shareholding or voting power in a public limited company more than 50 percent constitute undue concentration of economic powers.
On August 21, Iqbal Alimohamed, Chairman My Bank Ltd, Muhammad Yousuf Adil, Managing Director and Abdul Rab Director, Yousuf Adil Saleem and Company, chartered accountants, appeared before the authority, and agreed the case. They submitted that bank falls under Section 25(c) & (c) of the MRTPO, 1970, as it was exempted by the State Bank of Pakistan and the federal government, from the provisions of Section 14(1) (iv) of Banking Companies Ordinance 1962, allowing Iqbal Alimohamed to hold shares in excess of 5% of the voting rights and the bank is also regulated by the State Bank of Pakistan (SBP).
The authority informed them that neither the bank falls under section 25(c) nor 25(e) of the MRTPO, 1970. The federal government exempted the individual to hold shares in excess of 5 percent but not beyond 50 percent and the SBP has also not been notified as a regulatory authority under Section 25(e) of the Ordinance.
The authority shall, therefore, pass appropriate order, directing the individual to reduce his shareholding/voting power to such an extent to bring it below 50 percent. They were satisfied with the decision of the authority. The MCA also heard the case of International Brands (Pvt) Limited in the matter of undue concentration of economic power.
The authority has specified that no one appeared before the MCA on behalf of the undertaking. The authority took a serious view of un-compliance of its notice by the undertaking, however, due to weather conditions in Karachi decided to provide it another opportunity of being heard on September 5 at Islamabad.