PPP Govt set to punish Mansha Group, RBS handover to MCB in jeopardy

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.

Advertisements
Posted in 1. Leave a Comment »

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: