LAHORE: Arrangements for handing over the strategic shares in Allied Bank Limited (ABL) along with management control are in process and State Bank of Pakistan (SBP) nominated evaluators and officials are collecting data pertaining to the issue.
ABL officials believe that a belated procedure of data compilation may delay the handing over – for the third consecutive time – of ABL’s strategic assets and management control beyond March 15. They say that things are yet to be finalised to ascertain the actual assets and liabilities of the country’s third largest private bank.
Earlier, the SBP had fixed January 15, followed by February 15 and finally March 15 as deadlines for ascertaining the assets and liabilities of the ABL to transfer its management control to interested parties. However, the final date of March 15 is expected to see yet another extension as officials deputed by the Central Bank for this purpose, are yet to finalise a lot of issues.
The ABL is currently in the sale basket of the SBP, which is considering three serious contenders – Askari Commercial Bank Limited (ACBL), Pak Kuwait Investment Bank and Dawood Group – to be its next managers.
A source, on condition of anonymity, said that the SBP bosses do not seem to be in hurry regarding the disposal of the majority shares of the ABL along with its management stakes especially when at least three cases regarding the control of the bank’s management are pending adjudication before the courts.
Abbasi Group – claiming around 30 per cent share holding of the ABL – has recently acquired a stay order from the Sindh High Court (SHC). It has pointed that the Annual General Meeting (AGM) of the Bank has not been held after the year 2000-2001. The Group has also termed the current working of the Bank as illegal, since its affairs are being run through non-elected nominated directors.
Askari Commercial Bank Ltd (ACBL) – which claims more than ten per cent shareholding in the ABL – has also claimed its priority right over the bank terming itself as the most suitable party to take over ABL.
The President and Chief Executive Officer of ACBL, Kalim ur Rahman, while talking to The News, had claimed that the ACBL – with a network of 57 branches and twelve-year of commercial operations – has the most suitable credentials to take over ABL.
Sources said the SBP has already informed all three parties that they would have to inject at least Rs7 billion worth of liquidity to revive the Bank. Earlier, the government had dis-invested 49 per cent share of the ABL to its employees. Four different parties now hold these shares after ABL’s employees individually sold out its shares. Following this complex situation, the prospective buyers may be in lurch on taking over the Bank. However, new buyers have been assured of removing various irritants and bottlenecks before completing the transaction.
In accordance with section 47 of the Banking Companies Ordinance, the SBP has already acquired the management of ABL to facilitate the disposal of the Bank’s remaining 51 per cent share holding along with its management stakes to the new buyer.
However, the SBP sources declined to over-rule the open bidding option saying that it may be adopted to make the handing over process more transparent.
ABL – one of the largest banks of country in terms of its assets, deposits and advances – has a network of 825 branches and a staff strength of 7,082 employees. As on June 21, 2003, the deposit base of the bank stood at Rs105 billion and its total assets at Rs114 billion. The paid-up capital of ABL is little over Rs1 billion and its equity account reflects a deficit of Rs3.969 billion. The capital adequacy ratio (CAR) of ABL is 14 per cent, negative.
The Allied Management Group (AMG) – representing the employees of ABL – purchased 26 per cent of the total shares of the Bank – with face value of Rs10 per share – at a price of Rs70 per share along with its management control in 1991.
