SHC turns down plea for stay against PIA privatisation

The Sindh High Court (SHC) on Wednesday turned down an application seeking an interim stay order against the Pakistan International Airlines’s privatisation and directed the federal government to file comments on the petition.

Filing comments on the petition, the Pakistan International Airlines questioned the maintainability of the petitions and submitted that representatives of the employees union were not aggrieved persons and they had no locus standi to file the petition.

Another petitioner, Samira Mohammadi, sought an interim stay order in the PIA privatisation submitting that the PIA was a public entity and after an amendment to a law, the PIA could not be sold by the government.

She submitted that the privatisation matter could not be decided at the tribunal level as it was a constitutional matter and it should be heard and interim order given on an urgent basis. She said that it was likely that the PIA would be handed over to a foreign entity and the matter would be out of the jurisdiction of the court and would fall within the ambit of international courts.

The petitioner argued that the national security of the country would be seriously prejudiced in case the matters of the PIA, which was a strategic asset, were discussed in foreign courts. She sought urgent hearing of the petition and interim stay order in privatisation of the PIA.

A division bench of the high court headed by SHC Chief Justice Aqeel Ahmed Abbasi inquired how the federal cabinet and other institutions could ignore the national interest. The high court observed that it was an important matter and it wanted to hear all aspects. The bench turned down the request for interim stay but directed the remaining respondents and others to file comments on the petition by May 23.

Earlier, the Privatisation Commission had informed the high court that the proposed privatisation of the PIA was in the interest of the public, as instead of winding up the business of the PIA, it should be privatised.

The Privatisation Commission had submitted that the privatisation of the PIA was approved by the federal cabinet on August 7, 2023, besides the government of Pakistan had not made a decision regarding the cancellation of shares of the PIA or issuance of right shares.

The privatisation commission’s deputy director had submitted that the PIA had on September 15, 2023 said that it had been experiencing a monthly shortfall of no less than Rs12.77 billion with other additional losses of Rs713 billion as per its financial statement in June 2023, which showed a considerable burden on the public exchequer to arrange funds and the government was unable to sustain further losses and provide funds in billions to the PIA anymore.

The official had submitted that the approval of financial structure of the PIA’s privatisation was in the pipeline, while the scheme of arrangement for restricting and privatisation of the PIA along with its ancillary modalities was approved and would be filed with the Securities and Exchange Commission of Pakistan.

The PIA Employees Union and other citizens had submitted in the petitions that the federal government was taking steps to privatise the PIA and for this purpose amendments were made to the PIA (conversion) Act 2016.

The petitioners had submitted that the amendment to the PIA Act was made in 2023 just to provide illegal cancellation of shares and for fresh issuance of shares without due course and requirement of the law, which would allow a friendly takeover of the PIAC by a private company in violation of the Article 18(c) of the Constitution.

The SHC was told that a private party would be handed over the monopoly business of the government of Pakistan, which employed best technical workers, pilots, engineers and other technical staff. The high court was requested to declare the proposed privatisation of the PIA in respect of sale of share and management control of the airline as unlawful.