SHC issues notices on petition against privatisation of PIA

December 06, 2023

The Sindh High Court (SHC) on Tuesday issued notices to the Ministry of Law, the Ministry of Aviation and a UK-based financial advisory firm on a petition against the privatisation of the Pakistan International Airlines Corporation (PIAC).

Samira Mahamadi said in her petition that the process of privatisation of the national flag carrier has been initiated by the caretaker government, adding that this authority is not vested in the interim government in terms of Section 230 of the Elections Act, 2017.

The Sindh High Court building. — SHC website

She said that the authority to sell a national asset is not authorised even after the amendment in the PIAC (Conversion) Act, 2023.

She also said that Sub-section (1)(2) of Section 230 of the Elections Act, 2017, does not apply where the caretaker government has to take action or decisions regarding existing bilateral or multilateral agreements or the projects already initiated under the Public-Private Partnership Authority Act, the Inter-governmental Commercial Transactions Act or the Privatisation Commission Ordinance in respect of the privatisation of the PIAC, which is a public limited company.

She impugned the vires of the amendment in Sub-section (3) of Section 3 of the PIAC Act, whereby the federal government may, during the validity of the period and by notification in the official gazette, issue fresh shares or cancel any shares as it may deem fit, as the same is in violation of the company law, whose authority is not vested in the government, and such an amendment has been introduced to facilitate the PIAC’s privatisation.

She said that the impugned amendment has been made to bypass the lawful authority of the Security Exchange Commission of Pakistan to allow a friendly takeover of the PIA by an unregistered foreign company.

She also said the PIAC is not a state-owned asset because it is now a public limited company, so the federal government is not empowered to privatise the company in violation of the law.

After the preliminary hearing of the petition, an SHC division bench headed by acting chief justice Aqeel Ahmed Abbasi said that the contention raised requires consideration.

The bench issued pre-admission notices to the Ministry of Law, the Ministry of Aviation and the UK-based financial advisory firm, telling them to file their comments on December 21. An agreement had earlier been formalised with a consortium led by the UK accounting firm to provide financial advisory services for the divestment of the struggling PIAC.