Senate panel questions transparency of HEC’s privatisation

ISLAMABAD: While grilling the central bank for regulations on Politically Exposed Persons (PEP) and barring parliamentarians from getting bank loans, a parliamentary panel launched probe government’s decision to sell Heavy Electrical Complex (HEC) to allegedly a dubious company as ultimately its cheque of Rs225 million was dishonoured.
The Senate Standing Committee on Finance under chairmanship of Saleem Mandviwalla also refused to pass the Credit Information Bureau (CIB) bill in its existing shape as approved by the National Assembly, fearing that it could cause damage to politicians for getting clearance at time of next elections if private sector companies got involved in it so they wanted continuation of major role for the State Bank of Pakistan.
Senator Kamil Ai Agha took up the issue of PEP and termed it as infringement on basic human rights enshrined in 1973 Constitution. “How can banks refuse to provide loan to sons of parliamentarians if they never defaulted on their loans,” he asked and added that it was gross discrimination that should not be allowed.
Governor State Bank of Pakistan (SBP) Ashraf Mahmood Wathra asked the senators about specific cases where he could look into it personally. But the senators were of the view that they were opposing because of its discriminatory nature.
However, representative of the SBP told the meeting that there were different conditions attached with Financial Action Task Force (FATF) at international forum including PEP that also covered bureaucrats, top government functionaries, judges and army officers. The committee decided to take up PEP issue in details in its upcoming meeting.
On privatisation of HEC deal, the Senate Panel se tup a four-member special panel that would probe how Cargill Holdings Limited -the buyer of the HEC, was allowed to bid for the HEC despite having alleged suspicious credentials. The senators raised the issue that the company was registered in Pakistan just one day after decision taken by the board of Privatisation Commission to sell the HEC. “What kind of due diligence was taken by the PC whereby the company cleared by them ultimately defaulted on paying its amount,” they inquired.
The senators also took up the issue as to how the sole bidder was cleared. On that the Minister for Privatisation Mohammad Zubair replied that it was not possible to deprive any one being sole bidder as he could challenge this decision in a court of law.
Chairman of the standing committee expressed his shock over the government’s decision to sell HEC to a company that had neither sufficient capital nor any business presence in Pakistan.“We wanted to sell the HEC at all costs to avoid further losses”, said Mohammad Zubair, Chairman of PC.
The government had sold the HEC to Cargill Holdings Limited -a company that was registered in Kenya on December 10 -a day after the government re-initiated the HEC privatisation process. The transaction could not be completed after the buyer defaulted on payments. The Rs225 million cheque that the company gave to the PC, bounced.
Senator Fateh Muhammad Hassani observed that whenever a company is not registered with Securities and Exchange Commission of Pakistan (SECP), there is always a chance of wrongdoing.
The standing committee also decided to summon the officials of National Accountability Bureau (NAB) for not cooperating in the investigation of MCB privatisation deal. Senator Saeed Ghani of PPP had raised transparency concerns in it.
Governor SBP told the committee that the NAB had returned the MCB privatisation record on the pretext that it had nothing to do with it when another committee of the Senate did not incorporate minutes for re-investigating this case.
The standing committee again refused to clear the Credit Information Bureau Bill in its existing shape approved by the National Assembly. It was decided by committee that the Bill would be passed with certain amendments including verification of decision taken by private sector on loan default but the SBP opposed this amendment with full force.
After amendments introduced by the Senate, the Bill will again go back to the National Assembly for review. “The SBP cannot cover all the sectors of the economy as it does not have that much capacity”, said Wathra while opposing the panel’s proposal but despite requests made by the Secretary Finance the committee refused to pass the bill without introducing amendments in it.