A column in a recent issue of Business Recorder (page 2) refers to Privatisation of three banks in which private investors were given the majority shares but it is asserted that the GOP was reluctant to give up the entire holdings to keep its influence.
This is far from truth and the fact is that it was a deliberate policy choice based on the premise that the value of government residual shares would rise manifold once the strategic investors have improved the corporate governance, financial outcomes and increased the profitability and put the banks on firm footing.
Subsequent divestment of government shares have proved this policy right which has brought substantial gains in comparison to the original price fetched. If my memory does not fail HBL 41.5 percent shares were sold by the Government at around 1 billion dollars in 2015. Original price fetched for 51 percent shares was 389 million dollars.
The same was the situation with other two banks which have also been divested. In the years after privatisation all three banks paid hundreds of billions in corporate taxes while before 2004 they were getting subsidies for recapitalisation. I can assure you there was hardly any residual government influence once the private investors were given the full control. However the regulator did exercise its due obligations.
Ishrat Husain (Former Governor State Bank of Pakistan Karachi).
Copyright Business Recorder, 2025
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