This refers to the news item published in the Daily Business Recorder dated June 25, 2015 regarding the sale of the Heavy Electrical Complex (HEC), wherein the correct factual situation has not been reported.
2. Pursuant to the recommendations of the PC Board and in light of the M/s Deloitte Valuation Report, the Cabinet Committee on the Privatisation (CCoP) approved the sale of HEC on March 26, 2015. Subsequently, the Letter of Acceptance (LOA) was issued to the buyer, i.e. M/s Cargill Holding Limited (CHL) on April 06, 2015, with a condition to make the remaining payment and finalize the Share Purchase Agreement (SPA) within 45 days, i.e. by May 21, 2015. However, on the request of M/s CHL, as the formalities of the transaction, including vetting of the SPA from Law Division was pending; therefore, the PC Board allowed an extension of three (3) weeks for the closure of the transaction, i.e. by Friday June 19th 2015. Furthermore, the PC Board also approved that in the event of the cheque amounting to US$ 2,205,885 dated May 21, 2015 of Diamond Trust Bank is returned unpaid, the Privatisation Commission may annul the sale of the HEC, forfeit the Earnest Money and inform the bidder, accordingly.
3. M/s CHL, instead of performing its obligations, instituted a Civil Suit No. 37/2015, titled M/s Cargill Holdings Limited vs. Federation of Pakistan and others before the Honourable Islamabad High Court, Islamabad and obtained a Status Quo Order on 02nd June 2015. During the pendency of the status quo order, the cheque submitted by M/s CHL for the balance sale consideration was returned with the instructions ‘Wrongly Drawn Cheque’. The Honourable Islamabad High Court after hearing the parties at length, dismissed the application for grant of interim injunctions, on June 17, 2015.
4. It is further clarified that M/s CHL was not offered any out of court settlement vide the Privatisation Commission letter dated June 12, 2015. M/s CHL was only asked to withdraw the civil suit, filed in the Islamabad High Court and fulfil the terms and conditions contained in the LOA dated April 06, 2015, duly accepted and acknowledged by M/s CHL vide its letter dated May 21, 2015.
5. Despite the extension in time to comply with the terms of ITB and LOA and make the payment of balance sale consideration, M/s CHL failed to make the balance payment of Rs 225 million till June 19, 2015 and, hence, the time limit of forty five (45) days, as provided in the ITB and LOA, stood expired at the end of office hours on June 19, 2015.
6. Accordingly, under the provisions of the ITB and LOA, PC vide its letter dated June 22, 2015 intimated M/s CHL that the LOA stands revoked / expired due to afflux of time. The earnest money deposited by M/s CHL stands forfeited as M/s CHL failed to fulfil its obligations under ITB and LOA. Furthermore, the Privatisation Commission reserves the right to initiate any legal action against you and M/s CHL, jointly or severally, as a consequence of the cheque, provided by you for and on behalf of M/s CHL, not being honoured.
7. Foregoing in view, it is clear that the Privatisation Commission remains fully committed to ensure the highest standards of integrity and transparency in conducting all its transactions and the question that the “cancellation of transaction becomes a mega scam” is baseless.