KARACHI : In a positive development for K-Electric, its investors and shareholders, two “warring” parties — Sheharyar Chishti and Saudi and Kuwaiti investors — have reached a settlement agreement in London, it is learnt reliably.
According to sources, the information has been conveyed to the relevant authorities in Pakistan, as the legal dispute between the two sides had created uncertainty among shareholders. The issue was also discussed during a recent meeting between the International Monetary Fund (IMF) and investors and businessmen in Karachi.
“Both sides have reached a settlement in London and will now nominate their new directors on the KE Board, while the government will nominate its own directors,” the sources said, adding that the development is expected to help the power utility move forward more smoothly.
Sources further claimed that the rescheduling of KE’s Annual General Meeting (AGM) was apparently part of the settlement reached between the Gulf-based investors and Sheharyar Chishti.
Earlier, Saudi and Kuwaiti investors in KE had accused the Power Division of Pakistan, including the relevant minister, as well as the National Electric Power Regulatory Authority (NEPRA), of actions that allegedly undermined their financial rights in the power utility.
These allegations form part of a $2 billion international arbitration initiated by Abdul Aziz Hamad A. Aljomaih, Combined National Industries Holding Company for Energy K.S.C., and others against the Islamic Republic of Pakistan.
There was another dispute between Gulf investors and Mr. Chishti about Directors.
Sources said the Saudi energy minister had also asked Pakistan’s petroleum minister Ali Pervaiz Malik to help resolve the dispute between the Government of Pakistan and Aljomaih, noting that investors from Saudi Arabia had become reluctant to invest in Pakistan due to the difficulties faced by existing investors in KE.
Recently, the interim Chief Executive Officer (CEO) of KE, Muhammad Adeeb, visited Islamabad where he held meetings with government officials and discussed issues faced by the utility.
Insiders in Islamabad claim that KE’s new management is now trying to convince the authorities to revise the utility’s tariff upward, arguing that it has become increasingly difficult for the company to operate under the current tariff structure.
However, it remains unclear whether KE will succeed in reversing its multi-year tariff to the original determination, although efforts in this regard are reportedly underway. Ends
