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ISLAMABAD: Privatisation Commission’s (PC’s) Transaction Committee is to meet on Tuesday (today) to finalise the price of assets of PSM and wording for an Expression of Interest (EoI) expected to be published this month, well informed sources told Business Recorder.

Recently, PC sent an official delegation to Karachi to discuss the evaluation of PSM’s assets with the evaluator as the worth determined by the evaluator is higher compared to PC’s own expectations, the sources added. “The value of lease of PSM land per acre is standard. The actual issue is determination of value of plant and machinery which will be settled this week,” the sources said, adding that as this issue is resolved, EoI will be published in newspapers.

M/s Joseph Lobo (Pvt), who was appointed valuator of PSM’s assets (1267 acre land+ plant), calculated a value of over Rs 500 billion which, according to the PC, is far above actual value of plant and machinery.

The incidents of theft of iron ore and other items are routine with the “connivance” of security officials. Unconfirmed reports suggest that PSM’s mainframe is out of order and major software database are offline/ not accessible for the last one month. These databases relate to stores inventories, marketing/sale data, HR data, financial ledgers, transactions data, gratuity fund and provident fund, etc. Most of the work is now being done manually or on individual computers without central servers which is prone to errors.

Insiders claim that maintenance contract with IBM was terminated after December 31, 2020 by the present management without making alternate functional solutions, which has resulted in IT database disaster for the PSM.

The sources said PC officials have also met the evaluator and requested for a downward revision of value, as no investor will be ready to accept the current value. The Transaction Committee will discuss all the pros and cons of evaluation done by M/s Joseph Lobo and prepare recommendations for the PC Board; the sources continued.

The government has recently constituted a seven-member board for a new subsidiary of Pakistan Steel Mills (PSM) to be headed by Chairman PSM Board.

The sources said the government has to take the following actions in accordance with section 16 of the Companies Act, 2017 read with regulation 5 of Companies (incorporation) Regulations, 2017 in order to obtain certificate of incorporation of the proposed new subsidiary from Securities and Exchange Commission of Pakistan (SECP): (i) the name of the proposed new subsidiary shall be Pakistan Steel Mill Subsidiary (Pvt.) Ltd with 100% government ownership;(ii) the name of the proposed company shall be notified as wholly owned by the Federal Government in the official Gazette for availing of the exemption from paying fee to SECP as provided in Schedule 7 (1) (III ) and; (iii) Formulation of Articles of Memorandum and Memorandum of Association.

The members of the board of new subsidiary are; (i) Amir Mumtaz-Independent Director, Chairman PSM Board; (ii) Additional Secretary (MoI&P)- ex-officio; (iii) Joint Secretary (Large Enterprises Development) MoI&P-ex-officio; (iv) Secretary Finance or his nominee not below the rank of Joint Secretary or BPS-20( ex-officio); (v) Secretary Privatisation or his nominee not below the rank of Joint Secretary or BPS-20 (ex-officio); (vi) Secretary, Board of Investment(BoI) or his nominee not below the rank of Joint Secretary or BPS-20 (ex-officio; and (vii) Chief Executive Officer (CEO), PSM (executive director).

Copyright Business Recorder, 2021

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