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Supreme Court upholds HBL privatisation

29 November, 2011

KARACHI: The Supreme Court of Pakistan on Tuesday upheld the privatisation of the Habib Bank of Limited (HBL), saying that the majority-stake sale of the bank was according to the law and international best practices.

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A three-member bench of apex court headed by Justice Tassadaque Hussain Jilani and comprising Justice Mian Saqib Nisar and Justice Aijaz Afza Khan dismissed petitions filed by former secretary Planning Commission Dr Akhtar Hussain, Watan Party and employees of the bank against the privatisation of HBL.

The bench upheld the HBL privatisation process on the basis that it was in accordance with law and international best practices.

Aitzaz Ahsan, counsel for the respondents, in his arguments rejected claims made in the petitions and contended that due course was adopted for HBL privstisation and all the rules were followed. He said that the transaction was based upon transparency and contended that the privatisation of HBL was done on merit and advertisements were floated in the national and international media for the purpose.

Market analysts have termed the decision as a positive step for future investment scenario of the country.

“This is indeed a positive development. This will be taken as a benchmark for future privatisation process and it will increase confidence of foreign investors as well,” said Ahsan Mehanti, Director at Arif Habib Investments.

In 2004, the government of Pakistan privatised HBL through which Aga Khan Fund for Economic Development acquired 51 percent of the bank’s shareholding and management control for 22.41 billion rupees. About 42.5 percent of the shareholding is retained by the government of Pakistan while 7.5 percent is owned by over 170,000 general shareholders following the public listing of the bank that took place in July 2007.

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