Karachi: On Thursday, the Sindh High Court (SHC) has rejected all constitutional petitions including those filed by its Labour Union that opposed privatisation of K-Electric (KE). The court had reserved the judgement on December 13, 2017.

According to the details, the KE’s labour union had approached the court in 2005 against the government’s decision to privatise the power utility. In court, the labour union leader said that only court knows why it took 15 years to come to this decision.

He further added that the union will consult lawyers to challenge the SHC’s decision in the Supreme Court and any decision will be made afterwards.

The court while announcing its reserved verdict stated that the process of privatisation of KE was not ‘illegal’ and the applicants failed to satisfy the court that why the KE cannot be privatised.

Last year in the month of July, the Federal Minister for Planning and Development Asad Umar said that if there is no legal binding on agreement with KE then it should be made public.

KE on its official Twitter handle welcomed the decision by Sindh High Court in favour of the power utility. KE in its Tweet wrote:

“K-Electric (KE) welcomes the landmark decision by the Honourable Sindh High Court under which all petitions challenging privatisation of KE have been dismissed in favour of KE, its shareholders, and the Privatisation Commission (GOP), as announced in the open court today.”

On December 13, 2017, the SHC reserved its judgment on a petition against the privatisation of the K-Electric and transfer of the company’s shares and administrative control to a Dubai based company Abraaj Capital.

The electricity utility’s labour union had challenged the company’s privatisation in 2005, contending that the process for privatising the organisation, then Karachi Electric Supply Corporation (KESC), was carried out in violation of Article 154 of the constitution, as neither prior approval of the Council of Common Interests (CCI) was sought, nor was the process supervised or controlled.

The petitioner had also questioned the transfer of shares and administrative control of the public utility to a Dubai based company, Abraj Capital. The labour union contended that the Privatisation Commission kept everyone in dark about the exact terms and condition regarding the sale of KESC to the reconstituted Hasan Associates.

The petition maintained that the shares of the company were transferred without inviting a fresh tender or bid for selling the shares. The counsel of the petitioner further submitted that the KE’s current shares were now being sold to a Chinese company by the Abraaj Capital.

The case has been pending in the SHC since 2005 and the commission had earlier submitted in its comments that the privatisation process of KESC was not conducted under any secrecy, and that all the major stakeholders of the company were consulted and kept abreast of all major development at every stage.

The commission had received a full price of $265 million (Rs 15.90 billion) and 73% shares of KESC along with management control were transferred to the reconstituted Hasan Associates, in 2005.

The counsel for Abraaj Capital submitted that the transfer of shares of KE to its company was done in accordance with the law and approval of the commission. Maintaining that the transfer of shares to a Chinese company is a business agreement between two companies that could not be challenged here, the counsel requested the court to dismiss the petition. The SHC bench headed by Justice Aqeel Ahmed Abbasi after hearing the arguments reserved its judgment three years ago.


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