AsiaPak Investments — a consortium under the aegis of Shehryar Chishti, who earlier this summer procured the Infrastructure Growth and Capital Fund (IGCF) — has launched a scathing critique against the minority shareholders of KES Power. They have implicated these shareholders in the ongoing legal imbroglio concerning K-Electric, accusing them of its mismanagement. As a corollary, they have attributed Karachi’s electricity predicaments to these minority shareholders. This statement comes almost two weeks after both factions had claimed victory in the aftermath of the Cayman Grand Court’s ruling.
To recap, Shehryar Chishti is the proprietor of Daewoo in Pakistan. Through AsiaPak Investments, Chishti purchased IGCF earlier this summer, thereby acquiring a substantial 53.8% stake in KES Power. This, in turn, translates to a commanding 66.4% of K-Electric’s shares. The residual 46.2% of KES’ shares are apportioned between Aljomaih Power Limited, based in Saudi Arabia, and Denham Investment from Kuwait. The rationale behind Daewoo’s owner acquiring Pakistan’s sole privately-owned electric utility company has been previously documented by Profit.
The aforementioned minority shareholders are the ones facing the brunt of IGCF’s reproach. The underlying reason for this — apart from the historical intricacies explored in the aforementioned article by Profit — is a ruling passed by the Cayman Grand Court. While the court has deferred its final judgement until a conclusive hearing, both AsiaPak and the minority shareholders have seized the opportunity to proclaim their respective victories through media channels. Profit has chronicled this entire saga, particularly highlighting how a single court verdict could ostensibly yield two victors who were previously at odds with each other.
Now back to AsiaPak’s recent statement. Profit reached out to Shan Abbas Ashary, Chief Investment Officer at the Al-Jomaih Group and Non-Executive Director of K-Electric, to understand the minority shareholders’ point of view. However, sadly, no comment could be elicited. Subsequently, we will only be able to convey AsiaPak Investments’ tirade.
In the communique, AsiaPak is delineated as the predominant stakeholder of KESP, possessing a substantial 53.8% share. This proprietorship, AsiaPak asserts, bestows upon it the legal prerogative to nominate its representatives on the KE Board — a privilege that it states was instituted, and subsequently reaffirmed by the Cayman Courts in 2009 and July 2023, respectively.
The proclamation further elucidates that the minority shareholders of KESP acquiesced to this arrangement in 2015. Intriguingly, AsiaPak states, are the sole entities who have liquidated some of their underlying KE shares to date. The communique articulates, “Since 2009, both IGCF SPV 21 and the minority shareholders have been exercising their aforementioned legal rights to appoint their allocated number of directors on KE Board.”
Nevertheless, the communique voices apprehension over recent endeavours by the minority shareholders to negate and usurp AsiaPaks’ rights. These attempts are characterised as a blatant infringement of the KESP shareholders agreement, Cayman Islands law, and its recent Order.
The communique also underscores the tribulations in Karachi owing to these unlawful skirmishes instigated by KESP’s minority shareholders and KE’s dwindling performance. It culminates with a clarion call from AsiaPak: “IGCF SPV 21, KESP’s majority shareholder, must immediately be fully seated on the KE Board to spearhead KE’s significant turnaround with a concerted focus on providing affordable and reliable electricity to Karachi.”
Should we expect more quarrels in the media going forward?
In a nutshell, the likelihood is high. The Grand Court of the Cayman Islands is yet to hold one final session to definitively resolve the issue at hand. This forthcoming assembly, as alluded to in the aforementioned article, presents a potential win for both parties involved depending on the when and how the final hearing is conducted. It could potentially tip the scales in favour of one party, possibly yielding more than what they initially sought. However, until the session is held, more media tirades are a given.