Acting through local agents, this is how national assets are seized by global corporation all over the third world.
http://www.dawn. com/2006/ 08/09/tab. pdf
The above link is for the PDF copy of the supreme courts decision on PSMC’s privatization case.
Highlights
1- Mills net assets include land measuring about 19000 acres out of which the plant and the machinery is located on 4457 acres of land (core land) besides the land of downstream industrial estates. The value of this land was not accounted for while preparing the valuation report.
2- Steel mills earned a net profit of Rs 1.24 billion in 2003, Rs 4.85 billion in 2004, and Rs 6.74 billion in 2005 a major financial and administrative restructuring was done in 2002 which turned PSMC into a profitable organisation.
3- The following are extra incentives which were offered to the successful bidder as a special incentive after the bidding and were not included in the advertised EOI.
(i) The value of the land was excluded while valuing the assets.
(ii) The commitment of the Government of Pakistan to clear the loan liability of PSMC which was due for the year 2013 to 2019, amounting to about Rs.7.67 billion from the cash of Rs.8.559 billion lying with the Mills as per the Statement of Account.
(iii) Refund of Rs.1.00 billion paid in advance as tax to Government of Pakistan
(iv) Responsibility accepted by Government of Pakistan to satisfy the claim of the workers opting for Voluntary Separation Scheme (V.S.S.) up to Rs. 15.00 billion.
9. According to the Privatization ordinance 2001 an independant valuation of all the Assets of the company was required but in this case only the figures from unaudited accounts were used and the assets were not revalued at current market value.
10- Mr. Arif Habib the succesful bidder should have been disqualified in the first place according to the privatization regulations as several criminal cases were pending against him in different courts, he was the principal accused in the stock market crash case , and the allegations were that through his manipulation the stock exchange crashed leading to enormous losses to the small investors running into billions.
Rs. billions
11- Sale price 20.88
Stocks 12.00
cash In hand 8 .65
Tax refund 1.00
21.65
VSS Liability 15.00
Loan 7.57
The government was going to recieve only 21 billion, and was taking up the liabilities of Rs 22.57 billion in shape of vss liability and Loan.
The company had 8 .65 billion in cash in hand and 12 billion in raw material and finished goods, Mr Arif Habib was going to get all the land building and machinery and all the other properties owned by PSMC in other cites free of cost as a gift the amount he was paying was not even sufficient to payoff the liabilities the government was taking up for him.