"Investment in the shares of MCB has been one of my biggest business slip ups...........In hindsight, I should have never invested in this bank."Nawaz Sharif Came into power on November 6,1990, invited bids for the privatization of Muslim Commercial Bank (MCB) on December 15,1990 and announced its privatizaion to successful bidder, Messers Abdullah and others on January 9,1991.Mian Mohammad Mansha-Interview, daily, The Nation, April 28,1997.
Five bids were received for Muslim Commercail Bank with Tawakkals and Adamjee, being the highest and second highest bidders. Adamjee who formed a joint venture with Yunus Brothers, perhaps the biggest Export Houses in Pakistan, had incorporated Muslim Commercial Bank in 1949. As previous owner, they had the first right of purchase but, third lowest bid by Messers Abdullah and others, a consortium comprising of 12 leading industrialists, mostly from Punjab and headed by Mian Mohammad Mansha, was asked to match the highest bid and declared winner. The consortium which called itself the National Group comprised the following leading industrial groups and families:
At the press Conference called to announce the sale of MCB to the National Group, Finance Minister Sartaj Aziz said that two highest bids were rejected because the bidders had failed to disclose the source of their income. A press release distributed at the press conference claimed that the committee which scrutinized the five bids was guided by four major considerations namely 1) corporate and financial record of bidders, 2) capability of managing the bank on sound professional basis, 3) dispersal of share-holding to avoid concentration of ownership and control and 4) price offered on " as is where is" basis, without any condition.
1 Mohammad Abdullah Saphire 2 S.M.Muneer Din 3 S.S.Saleem Universal Leather and Footwear 4 Mian Mohammad Mansha Nishat 5 Haji Bashir Ahmad Sitara 6 Tariq Rafi Sadiqsons (United) 7 Mohammad Naseem Shafi Tanneries 8 Mohammad Arshad Arshad Textiles 9 Sheikh Mukhtar Ahmad Ibrahim 10 Saqib Elahi Be Be Jan Pakistan (Pvt) Ltd. 11 Bashir Jan Mohammad F and B Bulk Storage (Pvt) Ltd. 12 Khawaja Mohammad Javed Chakwal
Tawakkals filed a case in High Court but withdrew it under pressure from the Finance Ministry. In the subsequent privatization by Nawaz Sharif, Tawakkals succeeded in the privatization of three industrial units in such a dubious manner that Chairman, Privatization Commission came to be known as General Saeed Qadir Tawakkal, to rhyme like Abdul Qadir Tawakkal of Tawakkal group.
For nearly 30 months while Nawaz Sharif was in power, Bhutto and her party leaders ceaselessly attacked the privatization process, particularly privatization of MCB to Mian Mansha and his associates, as an act of favourtism and part of a game plan. Farooq Leghari, Finance Minister in the caretaker govt. of Prime Minister Moeen Qureshi, declared on the floor of the Senate on May 18,1993 that MCB was privatized as part of a grand design to grab some of the most profitable units slated for privatization.
" In the very first case of privatization of MCB, highest bidder who was the oringinal owner was also excluded. The third group got it. And I will tell you later, what happened to the third group and how they manipulated and used MCB for a host of other takeovers of the govt. corporate sector. It did not happen by coincidence. It happened by design", Leghari declared.
But all said and done, the story behind MCB's privatization has not been told and perhaps will never be told because those who could have done it, decided to make real capital after making political capital out of it. Once she came into power in 1993, Benazir developed amnesia about her pledge to investigate the privatization of MCB. However, MCB President Hussain Lawai, accompanied by Mian Mohammad Mansha held at least one meeting with Prime Minister's spouse Asif Zardari. Nobody knows what transpired in the meeting but within a week Mian Mansha went into forced exile, to return to Pakistan only after the ouster of Benazir in Nov 1996. It was also, only after the dissmissal of her govt. that collusion between Lawai and Asif Zardari, in several remunerative deals like award of gold monopoly to ARY Traders, loan to Sadaruddin Hashwani to facilitate the purchase of Occidental Petroleum and dubious UBL privatization to Basharahill became the public knowledge.
During first Benazir govt.(1988-90) Saddaruddin Hashwani had gone into forced exile, after a meeting with Asif Zardari amidst reports that he was under pressure to deliver Pakistan Services Ltd. operating the chain of Pearl Continental Hotels to a nominee of Asif Zardari.
While Mian Mansha was in exile, S M Munir, a member of National Group owning MCB and Chairman, Din group was appointed a federal minister. President MCB, Hussain Lawai was appointed an adviser to the Prime Minister.
" Mian Mansha can not be forgiven", a close aide to Prime Minister Nawaz Sharif, now a cabinet minister told a group of reporters in the National Assembly cafeteria, minutes after the new assembly had taken oath in Feb 1997. Mansha and his associates had wholeheartedly supported first Nawaz govt as is evident from the number of companies incorporated and listed on KSE, by Nishat and Chinioti communitiy. What went wrong between the " Lahore Maphia" and second Nawaz govt is a big mystery? But let us see how MCB was used to raid the State enterprises?
MCB was sold for Rs 2,420 against a down-payment of Rs 804 million. Within a year of privatization of MCB, Privatization Commission sold some of the most profitable cement plants to Mian Mansha, his relatives and business associates. Thus D G Khan Cement was sold to Tariq Saeed Saigol for Rs 1,799 million, Maple Leaf Cement to Nishat Mills for Rs 291 million, Pak Cement and White Cement for Rs 137 million and Rs 188 million respectively to Mian Jehangir Elahi and Associates. Dandot Cement was sold to the Chakwal group for Rs 254 million.
D G Khan Cement was acquired by Kohinoor Textile Mills (KTM) of Tariq Saeed Saigol by borrowing heavily from the bank, as is evident from the annual reports of KTM for 1992 which show no debt and 1993 which reveal heavy indebtedness.
Nishat Mills had assumed the management of Maple Leaf Cement on Jan 8, 1992 but within a few months of the sale D G Khan Cement by KTM to Mian Mansha, Maple Leaf Cement was sold by Mian Mansha to Tariq Saeed Saigol. KTM had also invested in the privatization of White Cement and Pak Cement but its investment was also divested in March 1992, in favour of Mian Mansha.
Dandot Cement was officially privatized to employees group but somehow it has become a part of Chakwal group, also closely related in business to Mian Mansha.
Thus it was through a complex intercorporate financing that Mian Mansha, his relatives and business associates ended up with five of eight privatized cement units which accounted for 45% to total industrial assets privatized by Nawaz Sharif. Within months of their privatization, cement prices catapulated in domestic market, forcing the govt. to order the dormant Monopoly Control Authority (MCA) to hold an inquiry into the possibility of cartelisation of cement. As was expected the inquiry absolved the privatized units of any wrong doing.
It was because of
the assets acquired in privatization that Nishat group of Mian Mansha which
was at the 15th position among the list of 43 top industrial families in
Pakistan in 1972 and sixth in the ranking of the Monthly Herald in 1990
had risen to the top of the corporate world in 1993, by the time, Nawaz
Sharif was dismissed on charges of corruption and other irregularities.
Benazir Bhutto and Hashwani
Table of Contents
Some landmark cases of Corruption
Robber Barrons of Pakistan.