ISLAMABAD: The Al Jomaih Group, a prominent Saudi conglomerate, has formally approached the Securities and Exchange Commission of Pakistan (SECP) regarding serious governance issues surrounding K-Electric Limited (KEL), well-informed sources told Business Recorder.
In a letter of July 26, 2024, Abdulaziz Hamad Aljomaih, Managing Director of Investments at Al Jomaih, expressed deep concerns over attempts by Shehryar Arshad Chishty to acquire control of KEL. He emphasized the urgent need for regulatory intervention to protect the interests of the utility, the Government of Pakistan (GoP), and the residents of Karachi.
Al Jomaih’s appeal was prompted by ongoing SECP suspicions regarding the Ultimate Beneficial Owners (UBOs) of KESP, KEL’s parent company. He referenced a history of Chishty’s corporate raids, including multiple failed attempts to acquire KEL, notably a rejected offer in 2016 due to concerns about his funding sources. After the liquidation of the Abraaj Group in 2018, Chishty again sought control but faced resistance.
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The letter highlights Chishty’s “opaque agreements” made in 2022, which he claims were sanctioned by Cayman Courts but lacked necessary approvals from the GoP, SECP, and the Pakistan Stock Exchange (PSX). These actions have drawn regulatory scrutiny, resulting in fines against KEL and directives from the SECP to prevent governance disruptions. Notably, a Cayman Islands court recently stated that it had not “sanctioned” the Sage SPA, casting doubt on Chishty’s claims.
Al-Jomaih raised serious questions about Chishty’s motives, suggesting his interest in KEL is driven by personal gain rather than the welfare of Karachi residents or Pakistan’s economic stability. Concerns were heightened by allegations of misappropriation of funds from Cnergyico, with an international tribunal noting that significant sums were redirected into accounts linked to Chishty’s entities.
The letter also points to Chishty’s inconsistent disclosures, including contradictory versions of regulatory forms detailing changes in UBOs, complicating the transparency of his acquisitions. Such contradictions have led to increased scrutiny from the SECP and other regulatory bodies.
Al-Jomaih’s letter underscores a commitment to upholding the rule of law and ensuring KEL operates with integrity. The group’s proactive engagement with the SECP highlights the importance of regulatory oversight in protecting local consumers and foreign investments in Pakistan.
As Saudi business delegations engage with Pakistani officials, the significance of Al Jomaih’s concerns grows. This appeal underscores the critical need for transparency and accountability in managing essential services, particularly as Pakistan seeks to attract further foreign investment.
Al-Jomaih has offered full cooperation to the SECP, demonstrating the Group’s dedication to regulatory compliance and transparency.
Sources indicate that the Prime Minister’s Office (PMO) also sought updates from the Power Division regarding KEL prior to the Saudi Investment Minister’s recent visit to Pakistan.
Copyright Business Recorder, 2024