KARACHI: The controversy about takeover of Adamjee Insurance is finally over, as the Adamjee family that founded the company has unconditionally withdrawn its petition against the MCB group.
“Yes, we have unilaterally withdrawn the case because six long years have passed without any outcome and we are no more interested in pursuing the case,” said Ashraf Adamjee, a family member who had been managing the company before the takeover.
He said that they fought for many years for their right, but justice was not served. “This is a unilateral and unconditional decision and does not involve any financial or commercial settlement.”
The controversy arose in 2002, when the shareholding of MCB Bank and its pension and provident funds in the insurance company crossed 36 percent of the total shares.
Adamjee family filed a suit in the Sindh High Court alleging that MCB was planning to take over the company “with depositors’ money in violation of Banking Companies Ordinance that does not allow banking companies to acquire more than 30 percent shares in another company”. The Sindh High Court stayed the Annual General Meeting of the company after the suit was filed. After the MCB group stated to the court that they had no intention of acquiring the company, the court vacated the stay order.
The family approached the Supreme Court of Pakistan to appeal against the SHC’s order, but the apex court, relying on the statement of MCB group that they had no intention to acquire the insurance company, upheld the SHC’s decision and ordered holding of the AGM.
“But, in complete disregard of their undertaking to the apex court and in violation of Takeover Ordinance, 2002, the MCB group acquired control of the Adamjee Insurance at the AGM held on May 29, 2004,” said Ashraf Adamjee. “This acquiring of management control was also in violation of the Memorandum of Association of the MCB that prohibits acquiring and holding shares in any company other than a banking company.”
The Adamjee family again approached the Sindh High Court in 2005 against the hostile takeover. After hearing the petition, a divisional bench reserved the judgment. In 2009, the SHC fixed the matter for re-hearing.
Nadeem Ahmed of Ahmed & Qazi, the counsel for Adamjee family, said that their clients had unconditionally withdrawn their claim without any commercial or financial settlement. The scrip of Adamjee Insurance closed at Rs67.11 on Friday with a gain of Rs1.39.