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PPP govt set to punish Mansha Group
RBS handover to MCB in jeopardy
Shah Hasan
Islamabad—The handing over of Royal Bank of Scotland, Pakistan (RBS)
to MCB Limited headed by Mian Mohammad Mansha has virtually hit
snags because of the wrath of the incumbent regime, which is too
much incensed over non-cooperation by MCB Bank to resolve the issue
of circular debt in energy sector, a senior government official
revealed to the Pakistan Observer.
MCB signed an agreement on August 12, 2009 with The Royal Bank of
Scotland Group plc to acquire 99.37 per cent of the ordinary share
capital in RBS Pakistan at the cost of Rs 7.2 billion ($85 million).
“Now, the materialization of this transaction and acquisition of RBS
is in jeopardy, as State Bank of Pakistan toeing the line of the
Government has expressed concerns that include that this transaction
will help strengthen one group in the country and will trigger the
concentration of ownership of one group in the banking industry
which will prove lethal in the days to come.”
“The State Bank of Pakistan also showed its anxiety that the banks
should not be run by the industrialists as it will not help ensure
the level playing field for all business tycoons to have access to
the credit lines.” The Central Bank has also expressed the concern
that MCB bank is not being run under the corporate governance model,
rather it is being run as a family entity.
Mian Mohammad Mansha is the head of the Mansha family and the
Chairman of the Nishat Group. He is regarded as the richest man in
the country, with a net worth of $4.5 billion.
Mian Mansha’s conglomerate greatly benefited from the privatization
drive of the 1990s during Mian Nawaz Sharif era. Through this
period, he made a number of acquisitions and buy-outs, including
engineering at least one hostile takeover. When the dust settled,
Mansha had acquired a controlling position in Adamjee Insurance, the
country’s largest non-life insurer, and DG. Khan Cement, previously
owned by the Saigol family. While going through these large
acquisitions, he was simultaneously expanding his legendary Nishat
Textiles, the country’s largest exporter of textile goods.
But all these achievements, perhaps, played third fiddle to Mansha’s
master-stroke: the acquisition of one of Pakistan’s most profitable
banks MCB Limited.
MCB has also joined hands with Mybank of Malaysia which has a 20%
controlling share in the bank. “Keeping in view the existence of Mr
Mansha being the biggest industrialist and most influential
financial wizard, the State Bank of Pakistan has come up with
certain concerns,” the official claimed.
However, the formal transaction valuing Rs 7.2 billion ($ 85
million) and handing over of RBS, according to the official, can
take place subject to approval of the regulatory body (The State
Bank of Pakistan) and issuance of NOC by the Finance Ministry.
The unwillingness by the Government in handing over of RBS, Pakistan
to MCB Bank Limited is the first part of its wrath to punish the
Mansha group, which according to the officials, refused to cooperate
with the Government on erasing the circular debt because of the
political backing and unwavering support of top leadership of
Pakistan Muslim League-N that Mr Mansha is enjoying.
The official said that the Zardari regime had taken the refusal by
MCB Limited very seriously and was all set to cut Mansha Group to
size.
“Mr Mansha who brands himself as over 100 per cent a smart person
and refuses to play his role in purchasing the Terms Finance
Certificates issued by the Government in the national interest
whereas other all 18 banks purchased the TFCs valuing Rs 85 billion,
should be ready to face the music,” the chief economic manager of
the current regime Shukat Tarin was quoted as saying during the
Iftar party arranged on September 14 by Dr Asim Hussain, former
Advisor to Petroleum Ministry and Natural Resources to PM and
Chairman NRB.
“Mr Mansha will now face the music as the government will withdraw
its deposits valuing Rs 13 billion in the MCB and will never give
any business to the said bank.”
When asked if MCB Limited had refused to take part in TFC purchasing
on the ground that its lending exposure to power sector had exceeded
its limits and it had also to cater to extend the credit line to
other sectors of economies, the official said that all other banks
had come forward in the national interest of the country, and only
this bank did not cooperate. |
