Privatization Commission ‘Forgets’ Etisalat’s Pending Dues of $800 Million From PTCL’s Sale

The Privatisation Commission (PC) Board endorsed a report on Wednesday showing receivables from privatization at Rs. 5.2 billion while it did not mention the missing billions from Etisalat.

The board of directors approved the report which was prepared for the audit of the PC receivables as of June 30, 2022. According to the report, the outstanding dues reflect poorly on the privatization commission, which is already facing questions after the government enacted the new Inter-governmental Commercial Transactions Act 2022 for fast-tracking the sale of state-owned entities, reported Express Tribune.

Roughly Rs. 5.2 billion was owed by 13 parties as of June 30, 2022, the PC Board was informed on Wednesday. The maximum amount of Rs. 4 billion was owed by the Schon Group as a result of the privatization of two entities decades ago, including an Rs. 494.4 million principal amount.

But the report fails to mention the $799.3 million in unpaid dues from the PTCL privatization.  A commission official told reporters that PTCL’s receivables will be included in the Privatisation Commission’s audited financial accounts. This does not excuse the commission from excluding the largest liability from the receivable amount.

Pakistan sold 26 percent of its stake in PTCL to Etisalat in July 2005 for $1.96 per share. A total of 1.326 billion shares were sold for a total of $2.6 billion.  Etisalat has not delivered $799.3 million and is holding 407.8 million shares without making the pending payments over the last 12 years.

Pertinently, PTCL has declared dividends and claimed technical service agreement fees since its privatization in July 2005.

Etisalat is carrying the $799.3 million because 31 properties were not transferred. Etisalat International valued the non-listing properties at Rs. 31 billion in 2019, but instead of using the current forex rate of Rs. 140, it converted the amount to Rs. 62.75 per dollar in 2008, resulting in $499 million.

Pakistan has time and again requested Etisalat to clear its dues by deducting the value of the outstanding payment, but Etisalat says that it will clear payment as per Sale Purchase Agreement in full only after the complete transfer of properties. Despite this, the privatization commission has since then announced several times that its arrangement with Etisalat has been made and payment will be cleared soon, but nothing has materialized so far.