Bhutto's Nationalization policy

Society Pakistan & World Affairs
41

Re: Bilawal to step into electoral politics on Dec 27

That downfall does not mean the industries setup totally collapsed and were no where to be seen, it just means that the economy of country as a whole fell down.

42

Re: Bhutto's Nationalization policy

oye kaakayballi......do you really think you can debate/discuss with jiyalas?

43

Re: Bilawal to step into electoral politics on Dec 27

What is the difference? Bottom line, the whole economy fell down and instability resulted.

44

Re: Bhutto's Nationalization policy

This is yet again a dogla and hypocrite statement.

45

Re: Bilawal to step into electoral politics on Dec 27

You can't see the difference, of course.

46

Re: Bilawal to step into electoral politics on Dec 27

Pretty confused guy with no clue about what he is talking about.

Calling people who generate business and work as chor, blood suckers, anti state.. typical mentality of an illiterate labor union leader which has put us decades behind. All these beautiful words you are using for the people who are the most valuable people in any society show the level of the intelligence.

Tax chore, anti state activities, blood sucking of masses are crimes even if they are committed by non-business people. To avoid these crimes you need better law enforcement.. not nationalization simply because state is a bad manager of business. Even today we spend hundreds of billions of rupees of our hard earned tax payers money to compensate looses of poorly run state enterprises.. this money would otherwise be spent easily on education and health of the masses.

Bhutto nationalized all the banks.. what happened after that. The whole financial system of the country collapsed. Banks started dispensing loans on political grounds.. workers stopped working.. resulting huge losses to these banks every year which used to be compensated from tax payers money on annual basis. Only UBL used to get a cash injection of 22 billion rupees per annum. Now after privatization UBL is making a profit of more than 20 billion per annum paying around 10 billion in taxes to the government.. non performing loans have come down almost to a negligible level.. employees are being paid much better salaries and benefits.. financial health of all the privatized banks today is robust.

Societies who do not treasure their business leaders never progress. Business and innovation is the key to economic well being of the masses. Government is a very bad manager, therefore in progressive societies the governments keep their focus on law enforcement and regulation instead of running the business themselves. State run business models have failed every where in the world without exception wherever this model was applied and is bound to fail wherever it will be applied in future.

47

Re: Bhutto's Nationalization policy

I gave you the reason why, but unlike you, I don't have blind loyalty to anyone.

48

Re: Bilawal to step into electoral politics on Dec 27

I am not confused and I know exactly what I am talking about. Even people with absolute power could not enforce laws, how do you expect others could? I give you an example of bigger chor uchaka businessman who was three times PM of Pakistan in past. That chor uchaka big businessman was **kabarhia **before Zai-ul-haq, he made him one of the top businessman of Pakistan during his tenure as President and allow him to steal government money.

Your rants against banks are untrue. The nationalization policies continued even during Zia-ul-Haq rule. Had these been bad, he could have reversed it soon after taking over Pakistan. For your memory read again the history of nationalization. If banks were collapsed after nationalization as you said here, how did they survive till 1990’s? **I think you are the one big confused person, does not know what you are talking about.
**
Privatization in Pakistan - Wikipedia, the free encyclopedia

**Although a commission was set up by General Zia-ul-Haq government but no denationalization programme began until 1990.
**
** The privatization programme was launched on 22 January 1991[SUP][5]](Privatisation in Pakistan - Wikipedia)[/SUP]

**Now comming back to privitization. Again chor uchakay became active when they bought these entities in peanuts. These businessmen are as much responsible for destorying the country as much military dictators. Look what your chor uchaka leader has done in past to become a big businessman. Do you know how much tax on stolen wealth from poor he had paid in past?

http://richpaki.tripod.com/masterstroke.htm

Mian Mohammad Mansha and Nawaz Sharif- Privatization of Muslim Commercial Bank
The Master Stroke?

"Investment in the shares of MCB has been one of my biggest business slip ups...........In hindsight, I should have never invested in this bank."
Mian Mohammad Mansha-Interview, daily, The Nation, April 28,1997.

Nawaz Sharif Came into power on November 6,1990, invited bids for the privatization of Muslim Commercial Bank (MCB) on December 15,1990 and announced its privatizaion to successful bidder, Messers Abdullah and others on January 9,1991.

**Five bids were received for Muslim Commercail Bank with Tawakkals and Adamjee, being the highest and second highest bidders. Adamjee who formed a joint venture with Yunus Brothers, perhaps the biggest Export Houses in Pakistan, had incorporated Muslim Commercial Bank in 1949. As previous owner, they had the first right of purchase but, third lowest bid by Messers Abdullah and others, a consortium comprising of 12 leading industrialists, mostly from Punjab and headed by Mian Mohammad Mansha, was asked to match the highest bid and declared winner. The consortium which called itself the National Group comprised the following leading industrial groups and families:
**
(Don’t blame on Bhutto for these fups of your leaders and businessmen from Punjab)

1     Mohammad Abdullah     Saphire
2     S.M.Muneer     Din
3     S.S.Saleem     Universal Leather and Footwear
4     Mian Mohammad Mansha     Nishat
5     Haji Bashir Ahmad     Sitara
6     Tariq Rafi     Sadiqsons (United)
7     Mohammad Naseem     Shafi Tanneries
8     Mohammad Arshad     Arshad Textiles
9     Sheikh Mukhtar Ahmad     Ibrahim
10     Saqib Elahi     Be Be Jan Pakistan (Pvt) Ltd.
11     Bashir Jan Mohammad     F and B Bulk Storage (Pvt) Ltd.
12     Khawaja Mohammad Javed     Chakwal

**At the press Conference called to announce the sale of MCB to the National Group, Finance Minister Sartaj Aziz said that two highest bids were rejected because the bidders had failed to disclose the source of their income. **(here you go chor uchakay businessmen eh!) A press release distributed at the press conference claimed that the committee which scrutinized the five bids was guided by four major considerations namely 1) corporate and financial record of bidders, 2) capability of managing the bank on sound professional basis, 3) dispersal of share-holding to avoid concentration of ownership and control and 4) price offered on " as is where is" basis, without any condition.

Tawakkals filed a case in High Court but withdrew it under pressure from the Finance Ministry. In the subsequent privatization by Nawaz Sharif, Tawakkals succeeded in the privatization of three industrial units in such a dubious manner that Chairman, Privatization Commission came to be known as General Saeed Qadir Tawakkal, to rhyme like Abdul Qadir Tawakkal of Tawakkal group.

For nearly 30 months while Nawaz Sharif was in power, Bhutto and her party leaders ceaselessly attacked the privatization process, particularly privatization of MCB to Mian Mansha and his associates, as an act of favourtism and part of a game plan. Farooq Leghari, Finance Minister in the caretaker govt. of Prime Minister Moeen Qureshi, declared on the floor of the Senate on May 18,1993 that MCB was privatized as part of a grand design to grab some of the most profitable units slated for privatization.

(And you said that t Banking industry was collapsed due to Nationalization. Being a past moderator and reasonlable person I was not expectiong lies from person of your calibre)

" In the very first case of privatization of MCB, highest bidder who was the oringinal owner was also excluded. The third group got it. And I will tell you later, what happened to the third group and how they manipulated and used MCB for a host of other takeovers of the govt. corporate sector. It did not happen by coincidence. It happened by design", Leghari declared.

But all said and done, the story behind MCB’s privatization has not been told and perhaps will never be told because those who could have done it, decided to make real capital after making political capital out of it.

**" Mian Mansha can not be forgiven", a close aide to Prime Minister Nawaz Sharif, now a cabinet minister told a group of reporters in the National Assembly cafeteria, minutes after the new assembly had taken oath in Feb 1997. Mansha and his associates had wholeheartedly supported first Nawaz govt as is evident from the number of companies incorporated and listed on KSE, by Nishat and Chinioti communitiy. What went wrong between the " Lahore Maphia" and second Nawaz govt is a big mystery? But let us see how MCB was used to raid the State enterprises?
**
MCB was sold for Rs 2,420 against a down-payment of Rs 804 million. Within a year of privatization of MCB, Privatization Commission sold some of the most profitable cement plants to Mian Mansha, his relatives and business associates. Thus D G Khan Cement was sold to Tariq Saeed Saigol for Rs 1,799 million, Maple Leaf Cement to Nishat Mills for Rs 291 million, Pak Cement and White Cement for Rs 137 million and Rs 188 million respectively to Mian Jehangir Elahi and Associates. Dandot Cement was sold to the Chakwal group for Rs 254 million.

D G Khan Cement was acquired by Kohinoor Textile Mills (KTM) of Tariq Saeed Saigol by borrowing heavily from the bank, as is evident from the annual reports of KTM for 1992 which show no debt and 1993 which reveal heavy indebtedness.

Nishat Mills had assumed the management of Maple Leaf Cement on Jan 8, 1992 but within a few months of the sale D G Khan Cement by KTM to Mian Mansha, Maple Leaf Cement was sold by Mian Mansha to Tariq Saeed Saigol. KTM had also invested in the privatization of White Cement and Pak Cement but its investment was also divested in March 1992, in favour of Mian Mansha.

Dandot Cement was officially privatized to employees group but somehow it has become a part of Chakwal group, also closely related in business to Mian Mansha.

Thus it was through a complex intercorporate financing that Mian Mansha, his relatives and business associates ended up with five of eight privatized cement units which accounted for 45% to total industrial assets privatized by Nawaz Sharif. Within months of their privatization, cement prices catapulated in domestic market, forcing the govt. to order the dormant Monopoly Control Authority (MCA) to hold an inquiry into the possibility of cartelisation of cement. As was expected the inquiry absolved the privatized units of any wrong doing.

It was because of the assets acquired in privatization that Nishat group of Mian Mansha which was at the 15th position among the list of 43 top industrial families in Pakistan in 1972 and sixth in the ranking of the Monthly Herald in 1990 had risen to the top of the corporate world in 1993, by the time, Nawaz Sharif was dismissed on charges of corruption and other irregularities.

**These are few facts what top businessmen had done to Pakistan, do you have any morals to condemn these acts of so called dacoo, uchakay tax chor businessmen of Pakistan stealing usurping the rights of poor people? Again blaming Bhutto for nationalization and its effects on economy, you perhaps deliberately forget the real fornicators of Pakistan, because Bhutto, a politician from Sindh who was murdered a long time ago and all his family also killed, no one has been left to defend these false allegations by haamis or by-products of JI and he just became an easy escape goat eh for guys like you. **

49

Re: Bilawal to step into electoral politics on Dec 27

WRONG...Pakistan's industries were thriving, nation was getting affluent unitl Bhutto's disastrous nationalization policy.My grand father was an employee of Pakistan Enginering Company(PECO) owned by some buisness tycoon of Sheikh family.That Shikeh saab had meeting with Bhutto and in it he asked for permission to make helicopters in Pakistan, he had finance, technology and everything except governments permission but thanks to bhutto's nationalization the golorious factory turned into scrap yard.

50

Re: Bhutto's Nationalization policy

Bhutto was not a leader in vacuum. When you compare performance of any leader it is always relative. Comparing Bhutto with Ayub Khan, Yahya Khan, Zia-ul-Haq and Musharraf, Bhutto was the best among these rulers.

51

Re: Bilawal to step into electoral politics on Dec 27

Isn't PECO privatized a long time ago? Where are the helicopters?

As far I remember PECO was actually BECO, making quality bicycles such as Suhrab. How could they make helicopters as there was no relevance between the two fields. Technical requirements and expertise are 180 degree out. I don't know what are you talking about?

52

Re: Bilawal to step into electoral politics on Dec 27

**Here is dubious sale of UBL, which was running in profit before privatization. Yet another untrue and misguiding statement by you. The bank was fornicated and made it purposely bankrupt during N$ and BB tenure before privatized. It was very much running in profit till 90’s, yet proving your statement regarding nationalization as a big lie.

**G: UBL Privatization Bid for 21465659 Who Owns Pakistan

In September 91, Chairman, Privatization Commission, Saeed Qadir hasspeculated in an interview with Sabih uddin Ghausi of Daily DAWN that UBLcould fetch a price of Rs150 per share, against Rs 70 of ABL and Rs 54 of MCBbut in 1996 it was sold to a dubious group for Rs 15 per share. Such a big fall insuch a short time could happen only through a determined effort by thecontrollers of the bank to bankrupt it before its privatization. That a sustainedeffort was made by the govt. to bankrupt the bank before its privatization is alsoevident from the annual balance sheets of the bank.

UBL earned Rs 236 million profit in 1991, Rs 258 million in 1992 and Rs 275 in1993 which went down to Rs 59 million in 1994 and gave a loss of Rs 720 millionin 1995. During three years of Benazir govt. overdue advances jumped from Rs12 billion to Rs 18 billion and 30 loans worth Rs 2 billion were rescheduled,scores of loans were written off.

In 1996 UBL had 3,000 ghost workers, Rs 700 million per annum was beingspent on the union whose office bearers were in possession of 190 bankvehicles. The employees of the bank had extracted unrecoverable loans worthRs 800 million. The bad loans amounted to Rs 17 billion (25% of all advances)and the bank was working with a net negative worth of Rs 12 billion. It was forthis reason that Consultant Credit Lyonnais, Deloitte Touche Tohmatsu andKhalid Majid Hussan Shah Rehman had recommended " that the bank can notbe sold without the govt. first pumping in at least Rs 15 billion to make it a viableoperation."

**Without taking into consideration the recommendation of Credit Lyonnais, thePrivatization Commission decided to dispose of UBL on "

As is, where is basis

",and invited bids on Oct 6,1995. Eight bids were received. Six were rejected onthe ground that the bidders did not have the required capital worth of Rs 1,500million or were defaulting on loans. Surprisingly those who were disqualifiedincluded Saigols, Atlas-Bank of Tokyo and a consortium of Crescent and Dewangroups. The Crescent-Deewan joint bid was rejected on the ground that theywere defaulting in the payment of a loan obligation.

After a charade of negotiations during which Chairman of the PrivatizationCommission made a pilgrimage to Saudi Arabia, the bid of dubious Basharahillwas accepted at Rs 15.30 per share. However the deal had to be called off whenit was found out that even the earnest money of Rs 300 million was madeavailable by Muslim Commercial Bank and was deposited by Sikandar Jatoi.

**

53

Re: Bhutto's Nationalization policy

^^^

I know you would mention MCB therefore i purposely gave you the example of UBL first.

MCB privatization was the best thing which happened to Pakistan and financial sector of Pakistan post Bhutto nationalization era. The facts you have mentioned are just taken from a dubious propaganda web site which are far from reality. Let me educate you with real facts about MCB.

1) The highest bid for MCB was submitted by Tawakkal group. It would have been really a disaster if MCB was handed over to this group. Tawakkals had not management and financial track record. They were running a Ponzi scheme of taking informal investment money from general public for a rent a car business paying 3-4% per month to these investors. There were no audited accounts available for this group. Later years proved that they were just a scam because in a few years they just vanished from the scene taking billions of investors money.

2) A consortium of very established and well managed business groups led by Mian Mansha were the second highest bidders. They were asked to match the Tawakkal bid which they did and the bank was handed over to the most deserving group of businessmen. This practice set a precedent for future banking privatizations. Thanks to some sense which prevailed at that time today the four major privatized banks have reputable owners.
UBL Sir Anwar Pervaiz (Bestway) and Al Nahiyan family (the rulers of Abu Dhabi)
HBL Agha Khan foundation
ABL Ibrahim group

3) Banks are very sensitive issue because you are dealing with public money. Credibility, financial health, reputation, and management skills of the owners must be taken in to account for such transactions.

4) Now 20 years after privatization of MCB.. the decision stands fully justified.

5) MCB's total market capitalization was less than 2 billion rupees at the time of privatization. It exceeds 500 billion rupees today. MCB is the most profitable bank today in Pakistan with over 30 billion in annual profits. It pays more than 15 billion rupees tax per annum. Over a period of 20 years post privatization MCB has paid more income tax than any other business entity in Pakistan. MCB has the lowest NPLs (Non performing loans) in the banking sector. The 25 % remaining share left with the government which was worth less than 500 million rupees at the time of privatization is worth more than 125,000 million rupees today. MCB employs more than 4 times the people they employed at the time of privatization.. paying some of the highest salaries in the banking industry.

The bank which was running in loss prior to privatization with a large Non performing portfolio due to political dispensing of loans and needed a cash injection every year from tax payers money contributes so much to the country as on today.. November 2012 giving decent employment to thousands.. and immaculate service to millions of customers through out the country.

P.S. Mian Mansha does not take loans from MCB as your dubious web site mentions. None of Nishat group companies ever did banking with MCB post privatization of MCB. Every other business entity being managed by Nishat group has robust financial strength with a choice of selecting any bank of their choice. Nishat Mills is the largest textile exporter of Pakistan.. Your hatred for chiniotis shows how racially prejudiced you are.. Chiniotis contribute major share in Pakistan's export in textiles, leather and several other sectors. Chinioti communities contribution through legitimate business towards progress of this country is highly commendable..

54

Re: Bilawal to step into electoral politics on Dec 27

Your post already clarifies why some of the bids were rejected. The financial statements which showed nominal profit for UBL did not account for huge Non performing infected portfolios of UBL. This was the reason the government of Pakistan had to inject 22 billion rupees as further equity before privatization of UBL. The new sponsors also promised to inject another 22 billion after the privatization which was subsequently done. No other bidder was in a position to inject such a hefty amount to consolidate the health of the bank after paying 15/16 billion for 25% management shares of UBL. UBL was handed over to the most deserving and reputed management consortium of Sir Anwer Pervaiz and Al Nahiyan group of Abu Dhabi.

Post privatization performance of UBL fully justified the decision to hand over the bank to the present management..

55

Re: Bhutto's Nationalization policy

And Bhutto was best in what sense? He was a byproduct of military rule & feudal landlord. And, there is nothing hypocritical about it, but you wouldn't know since you hero worship individuals instead of judging them on their performance.

56

Re: Bhutto's Nationalization policy

The people who have lived in Pakistan In the 90's can testify how much the banking sector has grown after privatization and telecommunications after deregulation. The performance of privatized entities has gone up whereas the departments still under government control are draining the resources. Supporting some one is one thin g but even the wrong decisions don't make sense.

57

Re: Bhutto's Nationalization policy

That is not the issue. Banks were running in profit before privatization whether it was marginal or huge, The way banks were privatized were not legal. People who made money out of it does not mean they did miracles. They had qaroon ka khazana in peanuts. Have you ever heard of Sultana Dakoo?

58

Re: Bhutto's Nationalization policy

**At that time there was no democracy in Pakistan. Bhutto's political life started after he left Ayub Khan during his peak rule. Hence your argument has no weight. Had Bhutto joined Zia-ul-Haq like ganja Sharif, I would have accepted your argument. Butto preferred to die, did not run away Pakistan, rather to sell his soul like other paki politicians.

I niether worship any one, nor I hate any one for sake of hatred. I gave you my reason for prefering him to be best as compared to others. You tell me whom you would prefer as leader among Ayub Khan, Yahya Khan, Bhutto, Zia-ul-Haq and Musharraf? Spell out your leader with justification, otherwise silence is golden.
**

59

Re: Bilawal to step into electoral politics on Dec 27

Since these sites proved you wrong hence dubious. Banks were not running in loss. UBL was deliberately destroyed before privatized, which was running in profit even in the 90's. Your ganja sharif who thought Pakistan us ke baap ka maal hay, jo marzi main aaaiay woh karay. You can justify these fups, but you don't have any other site which can prove wrong what I have provided the facts. More over you are now talking about post privatization, that is another story.

Again don't say that Bhutto's nationalization of banks, resulted in losses and sell of of banks to favorite people in peanuts which were running in profit before privatization. How this bank was destroyed, once again you have to refer to following fact.

[quote]
In September 91, Chairman, Privatization Commission, Saeed Qadir hasspeculated in an interview with Sabih uddin Ghausi of Daily DAWN that UBLcould fetch a price of Rs150 per share, against Rs 70 of ABL and Rs 54 of MCBbut in 1996 it was sold to a dubious group for Rs 15 per share. Such a big fall insuch a short time could happen only through a determined effort by thecontrollers of the bank to bankrupt it before its privatization. That a sustainedeffort was made by the govt. to bankrupt the bank before its privatization is alsoevident from the annual balance sheets of the bank.

UBL earned Rs 236 million profit in 1991, Rs 258 million in 1992 and Rs 275 in1993 which went down to Rs 59 million in 1994 and gave a loss of Rs 720 millionin 1995. During three years of Benazir govt. overdue advances jumped from Rs12 billion to Rs 18 billion and 30 loans worth Rs 2 billion were rescheduled,scores of loans were written off.

*In 1996 UBL had 3,000 ghost workers, Rs 700 million per annum was beingspent on the union whose office bearers were in possession of 190 bankvehicles. The employees of the bank had extracted unrecoverable loans worthRs 800 million. The bad loans amounted to Rs 17 billion (25% of all advances)and the bank was working with a net negative worth of Rs 12 billion. It was forthis reason that Consultant Credit Lyonnais, Deloitte Touche Tohmatsu andKhalid Majid Hussan Shah Rehman had recommended " that the bank can notbe sold without the govt. first pumping in at least Rs 15 billion to make it a viableoperation." *
[/quote]

Saying this, Bhutto was human being he made also mistakes, His nationalization policy was his promise to people on which he won the elections of 1970 in West Pakistan. He sincerely wanted to implement what he promised, but as usual the corrupt pakis like above, who were also his advisers did not let him to finish his job.

60

Re: Bilawal to step into electoral politics on Dec 27

How do you explain the state of the government enterprises in government control currently like Railways, PIA, Wapda, Steel Mills Etc? Secondly Mian Mansha's group is not dubious.