The winding-up in the Cayman Islands of the KESP, the vehicle for the ownership of 66.4 percent of KESC, means that the acquisition of KESC by the Shanghai Electric Corporation is off the table, assuming that this option still exists. The winding up is because the majority shareholder, Sage Venture, does not see eye to eye with the minority shareholder, Jomaih Grfoup. The winding up will meant that Sage Ventures will receive the KESC shares, and thus management control of KESC. Sage is wholly owned by AsiaPak Investments, which is controlled by Shehryar Chishti, and the ownership of KESC, which has been out of Pakistani hands, will come back to Pakistan. True, KESC has always been a Pakistani company, duly listed on the Pakistan Stock Exchange, but since 1985, the ownership of a majority of its shares have been in the hands of the KESP, registered in the Cayman Islands. After the Jumeirah Group, the company was bought by IGCF, which was a Cayman-registered fund of the Abraaj Group. This was controlled by Arif Naqvi, the prominent PTI supporter, who went bust in 2019. IGCF then was taken over by the liquidator, and AsiaPak Investments then picked up IGCF. That brought it KESP, and by winding it up, the 66.4 percent share of KESC will come to AsiaPak, and KESC control will vest with a company listed on the Pakistan Stock Exchange,
Just nationalism is not all that makes the development positive. There will also be the conversion of K-Electric from a stodgy utility relying only on thermal power plants and PEPCO supplies. It will go into solar and wind power, making the kind of investment difficult for consumers, and giving them the benefit of cheaper generation costs. K-Electric should end up as a utility which offers a cheaper mix of power than utilities relying on traditional means of generation. Mr Chishti’s interest in Thar coal also offers a generation solution which uses indigenous resources, and thus means the saving of foreign exchange.
The advantages of having a Pakistani owner are not to be sneezed at. Profits will not have to be repatriated abroad, while there will be greater sensitivity to national interests. The threat of pulling out the investment will also not be there. With further privatisations on the anvil, the example of K-Electriic, whose privatisation and subsequent ownership has been troubled, is very important. There should be a happy ending.
