Law ministry opposes changes to KE board

ISLAMABAD: In a new development, the law ministry has passed directives to the Privatization Division to maintain close vigilance on KES Power and K-Electric’s case pending in the Sindh High Court owing to the strategic importance of the matter.

According to an office memo of the Ministry of Law and Justice dated August 30, a copy of which is available with The News, the ministry has advised the legal counsel of Privatization Division to seek the continuance of the stay with respect to changes to KE board of directors in the proceeding currently underway in Sindh High Court between KE’s shareholder over the legitimacy of the sale of shares to AsiaPak by IGCF (Infrastructure and Growth Capital Fund).

In October 2022, the Sindh High Court issued an interim order preventing any changes to the composition of KE’s Board of Directors without consent from principal shareholders of KES Power namely Al-Jomaih and NIG Holdings of Saudi Arabia and Kuwait respectively.

The suit came on the heels of announcement from IGCF regarding the sale of shares to Sage Ventures, which is fully owned by Sharhyar Chisty’s AsiaPak Limited.

In a counter move, the top official of the Law Division said that IGCF had filed a case in the Cayman Islands for the winding up of KES Power.

According to the memo, the Ministry of Law has also advised the Privatization Division to consult the International Dispute Unit (IDC) at the attorney general’s office in Islamabad, which may from onward consult foreign counsel for advice with respect to the future course of action.

The Government of Pakistan, through the office of the President of Pakistan, owns 24.36 percent shares of KES Power, which also confers representation on the Board of Directors. It is feared that the attempt to seek winding up of KESP by the shareholders may make redundant any agreement between the Government of Pakistan and KE, resulting in the sale and purchase of KE shares without government consent and bypass the requirement of national security clearance. This poses significant foreign policy risks for the government as well as concerns regarding KEs liabilities that have remained the main reason for KE’s acquisition by Shanghai Electric Power to be held up for the past 7 years. The official of the Law Division reckoned that the tussle between shareholders is expected to continue in the courts till its legitimacy is established.