Pak Oman sues Progas for Rs 48 million recovery

Pak Oman Investment Company Limited has sued, in the Banking Court, its client Progas Pakistan Limited, a Karachi-based liquefied petroleum gas (LPG) marketing company for recovery of Rs 48 million, according to court documents available with Business Recorder.
The lawsuit against Progas Pakistan and Progas Holdings has been filed under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, and demands the recovery of Rs 47,650,530 along with cost of funds, charges and costs until realisation of the whole amount.
Other financiers of Progas have been included in the lawsuit as pro forma defendants, and Pak Oman is claiming no relief against them. These banks are United Bank, Standard Chartered Bank, Askari Bank, First Women Bank, Bank Al-Habib, Soneri Bank, and Bank of Punjab.
Pak Oman had lent Rs 50 million out of the Rs 1,370 million that it took to set up the private sector LPG marketing company. This funding was provided in 2004 against Progas Holdings pledging 42,475,137 shares as security and against first charge of the non-leased assets of Progas.
The lawsuit states that Progas "failed to perform its obligations in accordance with various finance and security documents" and "wilfully failed and neglected to pay the outstanding amount despite various demands and reminders by the plaintiff."
The court documents state that Pak Oman served Progas with a legal notice on June 20, 2008, but that Progas "with mala fide intention have refused to make payment." The lawsuit states that Progas Pakistan and Progas Holdings are "under legal obligation to repay the outstanding amount and liquidate their liabilities but have consistently and wilfully failed to act."
When this correspondent approached spokesman of Progas, Muhammad Ali Malik, he confirmed, after consulting the law department of the company, that there was litigation between the firm and Pak Oman Investment Company over payment, but denied to give details.
National Logistic Cell (NLC) is also a shareholder in Progas. "You know, litigation between the business partners is not something special. The legal department of the company is of the view that it has sorted out the issue, but will not give details," the spokesman added.