The Grand Court of the Cayman Islands has granted partial relief to Infrastructure and Growth Capital Fund SPV21 (IGCF) but also allowed the Pakistan Proceedings to continue with the Government of Pakistan through the Privatization Commission and Power Division Secretaries, NEPRA and SECP in the battle for the takeover of Karachi Electric (KE).
Mr Justice Segal Judge of the Grand Court made the order in Al Jomaih Power Limited and Denham Investment Ltd’s case against Infrastructure and Growth Capital Fund SPV21 (IGCF).
In October 2022, the Sindh High Court issued a stay order preventing any change in KE’s board of directors because of a lawsuit filed by the shareholders in KESP. There are three vacant slots on the board of directors.
A spokesman of Al Jomaih Power Limited and Denham Investment Ltd said: “This order merely documents the Court’s previous judgment. In effect, the Cayman court has only partially granted the relief sought but SPV 21 recognising that there are important public policy matters which the Pakistan courts and authorities must be allowed to determine and are bound to take very seriously.
K-Electric is an important asset and Al Jomaih and Denham remain committed to the people of Karachi and the success of K-Electric. In recognition of that point, the Cayman Court permits the Pakistan Proceedings to continue with the Government of Pakistan through the Privatization Commission and Power Division Secretaries, NEPRA and SECP.
“We are grateful to the Cayman Courts for recognizing that this is a sensitive matter for the people and Government of Pakistan with implications and national security.”
The spokesman said that nothing in the 16th August Order can be implemented till a second hearing takes place, which will be sometime in early October.
The Order asks the two shareholders to terminate or otherwise discontinue the proceedings commenced by them in the High Court of Sindh at Karachi, Pakistan by the Suit for Declaration and Permanent Injunction issued on 21 October 2022 and also orders that the “Other Shareholders” shall not (whether by themselves or their agents) commence or pursue, or procure or assist the commencement or pursuit of, any proceedings in connection with any dispute or disagreement under, arising out of, or relating to the Shareholder Agreement dated 15 October 2008 in any court or tribunal other than in either the Grand Court of the Cayman Islands or an English court.
The Order, however, also rules “The Other Shareholders may continue the Pakistan Proceedings against (i) the Government of Pakistan through the Secretary, Privatisation Commission, Ministry of Privatisation and Investment (ii) the Government of Pakistan through the Secretary, Ministry of Energy, Power Division (iii) National Electric Power Regulatory Authority and (iv) the Securities and Exchange Commission of Pakistan as defendants to the Pakistan Proceedings if and to the extent that the Other Shareholders only apply for and pursue relief that requires those defendants to the Pakistan Proceedings to exercise their duties, rights or powers in relation to K-Electric Limited or KES Power Limited in a manner that does not prevent the Applicant from exercising, or interfere with the exercise (whether before or after the date of this order) by the Applicant of, its rights under the SHA as a KES Power Limited shareholder.”
In layman terms, this means that further court hearings are required to determine the facts.
The KE ownership structure has come under discussion after it was reported that the majority shareholding of K-Electric has been taken over by Sage Venture Group Ltd, a British Virgin Islands–registered special purpose company wholly owned by AsiaPak Investments Ltd which is owned by businessman and banker Shehryar Chishti.
Evidence shows that it was in the year 2005 that the Aljomaih Group of Saudi Arabia and National Industries Group (NIG) of Kuwait, through an agreement in collaboration with the Government of Pakistan, attained the lion’s share of KE ownership. This privileged position has persisted to this day, endowing the two entities with a commanding see-through ownership of 30.7% in the company, KE.
