‘Fresh equity injection into bank conditional’

KARACHI: Clarifying a news report — SHC allows equity injection into bank — the plaintiffs have contended that the Sindh High Court has not “allowed the sale of Summit Bank shares to Mr. Lootah, rather (the court) directed that the process of injecting fresh equity by Mr. Lootah may continue subject to him complying with the Fit and Proper Test to be undertaken by the State Bank of Pakistan as mandated by law."

The counsel of plaintiffs — Atif Ahmed and Aqeel Karim Dhedi — stated: "The Court at paragraph 20 of its order noted the mandatory statutory provisions regarding the Fit and Proper Test and the ostensible non-compliance and failure of Mr Lootah to undergo the Fit and Proper test in advance of acquiring shares in Summit Bank; the failure of Summit Bank to give prior intimation to the State Bank before dealing with any investor and to seek the State Bank’s approval for allowing due diligence; and the lack of prior approval from the State Bank for any change in existing sponsor shareholdings."

The counsel stated: "The process of injecting fresh equity is now completely conditional upon the outcome of the Fit and Proper Test to be undertaken by the State Bank and the ability of Mr Lootah to satisfy the same. Thus, the current situation cannot truthfully be characterized as the equity injection/accquisition by Mr Lootah being “allowed” by the Honourable court."

The news report is inaccurate due to bank's "misleading disclosure to the Pakistan Stock Exchange" in respect of the SHC's order, the counsel stated, adding that the clarification is not meant to "impugn newspapers action."