LAHORE: Malik Riaz’s Bahria Town has entered the mortgage industry fray after successful acquisition of Escorts Investment Bank Limited (EIBL).
Bahria Town has acquired a majority stake of 76.254 percent in Escorts Investment Bank Limited (EIBL), according to an advertisement published in a newspaper on Wednesday.
An analysis by Profit in its cover story in July had mentioned Malik Riaz’s foray into Pakistan’s mortgage industry.
Malik Riaz, the dynamic real estate tycoon in February 2017 had intentioned to purchase 71% shares of Escorts Investment Bank Limited (EIBL) along with its management control.
Drama endured, two days after the PSX notification in a reply SECP had objected saying, “No requisite approval has been obtained by EIB or its sponsors with regard to the potential acquirer/investor.” Furthermore, it communicated that any potential acquirer of a non-banking finance company has to obtain prior approval of the SECP under the NBFC Regulatory Framework, including compliance with the laid down rules and procedures.”
In May, another stock market notification issued informed Bahria Town has been given the go-ahead to acquire 71.16pc stake including managerial control in the Escorts Investment Bank (EIB).
The notice had stated an in-principle approval was granted to Bahria Town to acquire the aforementioned stake in EIB subject to few conditions specified by SECP.
- The in-principle approval shall automatically stand cancelled in case the proposed transaction does not materialise.
- In case the negotiation culminates into a conclusive agreement, Escorts Investment Bank shall seek approval of SECP in terms of Rule 5(6) of the Non-Banking and Finance Company Rules, 2003. Furthermore, Escort Investment Bank and Bahria Town shall ensure compliance with all other regulatory frameworks including the requirements mentioned in Part IX of the Securities Act, 2015.
Escorts Investment Bank Limited, a non-banking finance company, provides investment banking services in Pakistan. Bahria Town has also separately acquired 100 percent shareholding and management control of Escorts Capital Limited (ECL).
EIBL may not be a well-known name anymore but as part of the once famous ESCORTS Group of Companies from Lahore, it once enjoyed good brand equity.
The group, a multifaceted conglomerate with interests in Hotels, Manufacturing and investment banking was founded by seasoned businessman (Late) Bashir Ahmed. The famous or perhaps infamous Escort gardens host to Lahore’s wildest balls and parties are also owned by the same group.