Putting aside the Rental Power Plant scam that is being exposed these days, I want to go back to the KESC scam as it is ongoing and the worst of it is yet to come and it is being called “de-privatisation”.
This is how I see it and see if you agree:
SCAMS OF THE PAST:
It is decided to privatize KESC and instead of trying to pump up the stocks, the exact opposite is done and the stocks are manipulated downwards. Even then they manage to get it down only between Rs 7-8 per share (Remember it hovered around Rs 15 when it was first decided to privatize it). Despite the fact that the stock price in the market is between Rs 7 and 8, the company is sold at Rs 1.65 per share, a “discount” of 75-80% and that too after government takes over Rs 90 billion of KESCs debt to a shadow group marketed as “Middle East consortium” which it is not. (Of course I contend that even that Rs. 15.85 billion was never paid) (Note: ADB is part of this consortium and an equal partner in this crime)
This company of course does not invest a dime in KESC. Not only that, it also never pays it’s bills. Instead it just collects the money that people pay as their electricity bills and syphons it out of the country. Of course sometimes when the companies providing it electricity (PEPCO, other IPPs) demand their bills be cleared, either the government comes to its rescue and pays KESCs bills OR KESC mortgages some of it’s assets with the banks or simply takes loans from the banks with the Government of Pakistan (GoP) as the guarantor. Please also remember that not only do they mortgage their physical assets but they even mortgage their future revenue stream i.e. the bills of their big industrial clients. They continue like this until ALL their assets are mortgaged with the banks and when nothing is left, and against the original deal, they “sell” their stake before the three years have passed.
SCAMS OF THE PRESENT:
Abraaj takes over. Billed as another “Middle East consortium”, Abraaj gets control of KESC without spending a single dime. I believe you have done well to expose this group as being nothing but another shadow group that is run by Zardari and Shaukat Tareen. But I want to reiterate that this group has not spent a dime and that ~$350 million investment is just pure smoke. We have also found out that that “sale” was nothing of the sort and Kunooz Group still holds all the shares. Despite that fact, and without owning a single share, Abraaj is able to take over KESC and work magic by getting every concession, “extraordinary incentives” from the government (including being handed over the deeds of all KESC property, getting declared a Disco, NEPRA becomes KESC’s servant instead of being a regulatory authority, billions more in loans taken over by the GoP, given free hand to raise tariffs as they choose (completely against the privatization agreement), etc.), thanks to Zardari and Tareen, the real men behind Abraaj. Meanwhile, remember that like Kunooz, Abraaj too has invested no money in upgrading the generation system.
Now do remember that EVERY ASSET of KESC is mortgaged including it’s future earnings which makes one wonder what Abraaj is going to get out of it (even if one assumes they paid $350 million for it — which they for sure didn’t)? Well, besides continuing to syphon out the monies paid by customers as electricity bills, the scam of the future is being set up that will gain them billions.
SCAM OF THE FUTURE:
I am pretty sure this is the way the scam is going to go:
Now we know Abraaj, despite claims, does not own a single share.
They admit they are NEVER going to invest those $350 million in KESC but KES Power, the shadow company created by Al-Jomaih/Kunooz group that holds KESC shares. But here is the killer: Abraaj will still not be buying any share of KESC from KES Power but — here is the major scam — they will get themselves issued as many shares of KESC as Al-Jomaih/Kunooz holds and have already started the process (with 31% “right” shares already issued in May of this year (which is equivalent to over 42% of shares owned by KES/Kunooz). More such shares will be issued till it holds the same no of shares — or a percent more — of KESC as KES/Kunooz holds. And in the meantime the campaign of “de-privatization” has been launched and for a purpose. Also, you will see the performance of KESC will continue to deteriorate so that the screams by people to “de-privatize” KESC also get louder. Now as this goes on, Abraaj will sell or hawk all real estate that they have managed to get deeds for from the GoP as well and issue more KESC shares to itself till their target is reached. Once there, the government will announce that “KESC has failed to improve despite repeated demands and ‘going by the will of the people’ we have decided to ‘de-privatize’ it”. But I can guarantee you before this happens, there will be a surge in the share prices of KESC of which maybe only one percent are being traded so you and I cannnot benefit much from trading in them. So how will it be “de-privatized”? Well, government will announce it is buying back all the shares of KESC from KES Power (which will now number twice then when KES Power acquired it and cost much more than the Rs 1.65 selling price; say the share prices are inflated to Rs 8. Now 9.7 Billion shares were sold to KES but GoP will be buying back double that i.e. 19.6 Billion shares — remember Abraaj will get itself issued 9.7 Billion shares too before ‘de-privatiztion’ — and at our assumed price of Rs 8 per share, it will cost the GoP (8 x 19.6 Billion) Rs. 156.8 Billion — approximately 10-times what they sold them at).
Of course people will hail this decision as a major victory. The government will claim it acted according to the will of the people. And Zardari and Tareen and Kanooz will laugh their way to the bank. But the fact will be the people will be the victims of one of the biggest swindles in history of this country. Because remember what you will be getting in return for that Rs 156.8 billion: Nothing but LIABILITIES. By this time KESC will not own a single plant (as they are all hawked to the banks), with all it’s properties sold, its future earnings mortgaged, and a distribution system broken down for lack of investment. But soon after the banks will go after the government — remember they are the guarantors — to repay the loans of KESC which would have ballooned due to interest and how many billions is that? I really have no idea but I do know the banks will make a killing as well.
But that is not all. In the meantime Abraaj will have also managed to take control of Thar coal reserves — they have already started and putting up power plants there and you and I both know they will get the coal for free, the plants will be paid for by GoP but they will get to charge an arm and a let for the power produced from there.
And in the meantime the whole process of KESC privatization, de-privatization would have started at least 8 other places, starting with Faisalabad Electricity Supply Company (scheduled for sale fiscal this year).
P.S. it is interesting to note the term “de-privatize” (as opposed to plain old “nationalize”) 😉
Additional Note: I really don’t know how much of the loans to KESC are from — or property pledged to — Shaukat Tareen’s Bank(used to be Saudi Pak, today known as Silk Bank) but I will guarantee you those mortgages/loans will be acquired by his bank before selling back to the government at a hefty profit. I also want to point out that he acquired Saudi Pak in partnership with World Bank (actually its financial arm International Finance Corporation (IFC)) and the two are still partners in Silk Bank. And keep in mind that WB’s subsidiary, the Asian Development Bank (ADB) too is part owner of KESC now. So I see a MAJOR conflict of interest here, not only in the KESC deal but ALL deals Mr. Tareen is entering with on behalf of Pakistan with WB/ADB/IMF because he does benefit when they benefit but pakistan suffers…..
My collection of articles on which this report is based can be found here. It includes my comments on each in the sidebar. Some of the articles are pasted below:
Pakistan’s Economy Comes of Age: Hope is in the air
Pakistan’s Stock Boom
Rally Rolls On Despite Political Woes
By ZAHID HUSSAIN
June 11, 2007: Wall Street Journal
“…Under Gen. Musharraf and his economic czar, Prime Minister Shaukat Aziz, a former Citigroup Inc. banker, Pakistan has pursued an aggressive privatization program. In the past four years, the government has sold more than $5 billion in state assets, including banks, telecommunications and industrial companies. The program has particularly been successful in improving the financial sector, with privatized banks now accounting for almost 90% of the banking industry. …”
My comment on Mush’s economic miracle to above on Watandost was:
Bulls*it! The stock market might be soaring but it is all a fraud and it will crash again any time like it did in March 2005 for the benefit of a handful of brokers and another cover up. How could our economy be on firmer footing when we have an increase in our debt of over 50% in the Mush years and mind you that is after selling almost every state asset (including banks, highways, etc.), over $20 billion cash inflows and $27 billion in expatriate remittances since 9/11. Despite all this our wonderous foreign exchange reserves stay at the magical $13 billion mark!
Also please realize that all this talk of foreign investment coming in is total fraud. Case in point: the recent announcement that MobilLink was investing another $700 million. But if you care to look you will see that none of that money is coming into the country but is actually being provided to MobiLink by local banks (MCB, HBL, UBL, ABL, HSBC and NIB) against local depositors monies. Same is the case with PTCL(Where Etisalat is paying for the purchase from PTCL earnings) and KESC (which is mortgaging its assets to pay its bills and pocketing the cash collected from its customers), to name a couple more examples. By the way I am not clear if KESC was really “purchased” by foreign investment as well (see Govt to provide guarantee for loan obtained by KESC (2001)) and Govt repays Rs22bn KESC loans…
Nice Hanky Panky, huh?
What’s a Defense Analyst doing batting for KESC?? Interesting….Must have been a big envelope full of cash given to Ikram Sehgal:
Give KESC some breathing space
Thursday, October 23, 2008
By Ikram Sehgal
For Pakistan it is vitally important that the Karachi Electric Supply Corporation Ltd (now known legally by its acronym, KESC) succeeds in generating and distributing electricity to nearly 2 million consumers, industrial, commercial and residential.
KESC started its slide in the 1980s with the shortfall between electricity being generated and the consumers’ demand widening. To an extent the Independent Power Producers (IPPs) that started to come on line in the mid-1990s closed the gap. Unfortunately, corruption had eaten to the core of this important entity and had become all-pervasive. Temporarily brought under control by Musharraf’s undeclared Martial Law in October 1990; this could not last long as the “monitors” themselves soon joined in earnest in the fun and games.
Privatisation in 2005 did not bring relief, the new owners being more wheeler-dealer than management-oriented. While they did “close” contracts for more power generation, they also made major mistakes, among them handing over operations to a third party. Dual management in any entity, corporate or otherwise, has never succeeded, with triple management there was bound to be confusion and acrimony. Acute shortages of electricity increased in the face of increasing demand. With the “feel good” consumer economy in full bloom, an overflow of air-conditioners, microwaves, refrigerators, TV sets, new housing, etc., all added up to massive demand against the electricity available. Along with system overload, the infrastructure started to break down, pilferages multiplied and revenues dried up, mainly because of incompetent, inefficient and corrupt management.
The final nail in KESC’s coffin was the decision by the new owners to fire the operating company (if only for the sake of their reputation, they would have kept KESC going) and appointing Lt Gen (Retd) Mohammad Amjad as the new CEO. Known for his honesty and integrity, Amjad had nevertheless surrounded himself as Head of the National Accountability Bureau (NAB) with corrupt close aides, almost all of whom can be prosecuted by NAB for “living beyond their known means of income.” His performance as Head of Fauji Foundation had exposed his corporate limitations. In KESC Amjad again surrounded himself with incompetent, inefficient and corrupt subordinates, almost without exception they proceeded to take KESC to the cleaners. No corporate entity in the world can afford such horrible management, least of all a troubled entity like KESC.
Amjad’s demolition crew was the proverbial straw that broke Al-Jomaih’s back. Deciding that they had bitten off more than they could chew the Al-Jomaih consortium looked around for a safe exit. Given the worsening economic and security circumstances, things looking bleak, a worst case scenario was a possible takeover by the federal government to prevent KESC putting the lights off going off throughout the city. Since water pumping depends upon electricity, the city would have soon run dry.
Into this cauldron Abraaj Capital rode in as a White Knight. Dubai-based and multi-national in all senses of the word, it is Pakistani-heavy, led by the brilliant Arif Naqvi. No pushover as a businessman, one really is surprised why he decided to step into the breach. With emotions in play as a Karachiite and as a Pakistani, Arif took the calculated risk that the KESC “black hole” can be a major profit centre if it is stabilised and rejuvenated, requiring a lot of effort, including a massive infusion of corporate sanity. KESC requires financial re-engineering and political support of the massive kind. Having put his money where his mouth is, success depends upon the support of the real stakeholders, the people of Karachi.
Abraaj has taken some vital steps in the resuscitation of KESC. They have bought in their proven “A” Team from Dubai headed by the brilliant Farrukh Abbas to look after Abraaj interests overall in Pakistan. As someone who admires Anjum Niaz for her many accomplishments, one felt she should have looked beyond the Farrukh Abbas family tree and given him the benefit of his proven brilliant record in turning sick companies around, for the past few years very profitably for Abraaj in many countries of the world. In Pakistan merit is often disqualifier, family connections should not disparage merit and outstanding competence. The Abraaj team benefits from an outstanding power sector executive, Tabish Gauhar, with good experience in Pakistan as well as quite a few troublespots in the world. Within KESC it has assembled a formidable team of honesty, integrity and competence, headed by CEO Navid Ismail, who in accepting this challenge has hands-on experience in Ukraine, Georgia, Argentina, etc.
As CFO Abraaj has brought the ever-dependable Jalil Tareen back from Dubai. As Shaukat Mirza’s closest aide this technocrat helped turn PSO around. Jalil left in utter frustration when Shaukat Mirza’s successor undeservedly took all the credit. As head of organisation management, KESC has acquired the services of the best man available in Pakistan, Zafar Osmani, poaching him away from an outstanding HR job done in Habib Bank. In the ultimate analysis Abraaj must exploit KESC’s greatest potential, its well qualified and experienced personnel reservoir. If Abraaj can act as the catalyst to create dynamics in this outstanding asset, KESC will easily light up Karachi again.
While financial investment is necessary to build up the generation capacity and carry out massive overhaul of the distribution system, political and financial space is crucial if the new management of KESC is to succeed. The vultures are circling without realising (or they probably well know) that KESC is in fact a national security issue, if the lights go dim in Karachi, so will they in the rest of Pakistan! What Karachi (and Pakistan) badly needs is that KESC must function. To put it bluntly, it is critical that KESC is given that space, only then will Karachi get the badly needed breathing space it deserves as Pakistani’s primary city.
The writer is a defence and political analyst.
Tuesday, November 04, 2008
By Anjum Niaz
And that is exactly what’s being enacted at the newly-taken over KESC–outrageous salaries for its CEO and 40 executives. Normally, I avoid commenting in my columns on other columnists and what they write–fairly or unfairly. It’s not my business to poke my nose into their affairs of the pen. Since Mr Ikram Sehgal took a swipe at me in one of his columns recently, I must respond. He took affront to my mentioning that Farrukh Abbas, the CEO of Abraaj Capital (Pak) was getting a hefty Rs4.5 million monthly salary for heading KESC; and that he was related through marriage to Mrs T Hakim Ali Zardari. I think the public has every right to this information. Shaheen Sehbai’s investigative story on Abraaj segued by an editorial in this newspaper last Friday and Saturday, respectively, must have further aggravated Mr Sehgal, who has been crusading for KESC’s new management in his columns.
The editorial goes: “The company (Abraaj Capital), which emphasises its track record of accountability and transparency, has stressed that these persons (Farrukh Abbas and company) were appointed on the grounds of merit alone and on the basis of their desire to serve people. Sadly, this is not a version of events most people in the country will be willing to believe. Even though it (the PPP) has been in office for barely eight months, accounts of corruption, nepotism and blatant abuse of power involving members of the new government and other who hold high office can be heard everywhere. The past reputation of prominent figures only spurs this on. So too do the admissions made by Abraaj. In the Pakistani context, it seems obvious how certain people got key posts. They are also reported to be drawing extravagant salaries. These latest revelations will only add to the distrust for politicians that is deeply rooted in our society, with persons elected by people then using their power to rob the country they claim to serve. These people need to come forward and explain what has been happening at the KESC and why the controversial appointments were made.”
To further deconstruct and navigate through this legal labyrinth can be too technical for the lay reader. So, bottom line: does Abraaj, which is incorporated as a Cayman Islands company, want control of KESC, which is a Pakistani company? It has already entered into an agreement with another offshore company called KES Power Ltd. This overseas holding company owns 72 percent shares in KESC. Both the companies fall within Pakistan’s jurisdiction, yet Abraaj’s circuitous route to ownership of controlling shares is raising red flags. Pakistani law protects the rights of minority stakeholders and therefore insists on “mandatory public intimation and offer requirement” whenever a company acquires more than 10 percent in a company. Why must Abraaj be exempted from going through this process?
Superclass, written by David Rothkopf, can perhaps provide the answer to my question above. The book is about the super-wealthy and the super-powerful world elites. The power brokers are people in international business and finance and the defence industry. “They move freely into high positions in their nations’ governments and back to private life largely beyond the notice of elected legislatures, which remain abysmally ignorant of affairs beyond their borders. Their disproportionate influence over national policy is often constructive, but always self-interested.” Rothkopf has identified roughly 6,000 individuals who have “the ability to regularly influence the lives of millions of people in multiple countries worldwide.” They are the “superclass” of the 21st century, “spreading across borders in an ever-thickening web with a growing allegiance,” Rothkopf argues, “to each other, rather than to any particular nation.”
November 8, 2008
The mystery surrounding the new owners of KESC, Karachi’s beleaguered power supply utility, has finally been unraveled. In a rare show of plain speaking, the top boss of Abraaj Capital with his 40 expensive executives, has made startling written confessions which may stun the nation.
In response to 35-questions sent to Abraaj/KESC’s new management, Mr Farrukh Abbas, the Chief Executive Officer of Abraaj Capital (Pak) and Mr. Naveed Ismail the Chief Executive Officer of KESC, have sent a 28-page document answering all the questions sent by The News, explaining and confirming what has so far remained part of a vicious whispering campaign in cool and cozy drawing rooms.
For instance these top executives admit that Mr Farrukh Abbas is a relative of President Asif Ali Zardari. “Mr Abbas is not directly related to the Zardari family, but is indeed through marriage,” his written response to The News states, but quickly adds: “At no time has any personal relationship played a part in Abraaj’s involvement in KESC….Abraaj spent six months doing due diligence of this deal and no favours were sought by Abraaj during the course of its negotiations with the Government of Pakistan and none were granted outside the normal course of commercial discussions aimed at reviving KESC for the benefit of all stakeholders.”
Another frank admission is that the Group marketing and Communication Head of Abraaj/KESC, Mr Qashif Effendi, is also related to the Zardari family. Is this correct, Mr Abbas was asked. “They are distantly related but that relationship has no impact on the business, nor has it played any role in Mr Effendi’s known career growth,”the written response says.
Yet another shocker comes when the company chief admits that the new Chief Financial Officer of KESC, Mr Jalil Tareen, is a distant cousin and a good friend of Mr Shaukat Tareen, Prime Minister’s Adviser on Finance but adds: “He has obviously been hired entirely on his own merits as he also happens to have a superb track record as a highly seasoned UK-qualified chartered Accountant and senior manager in Pakistani local and multi-national businesses.”Abraaj is a middle-east based company with over US$7.5 billionin management funds and has been operating in several countries. Its investors are predominantly from the Gulf and wider Middle East and increasingly from markets as wide as US, Asia and Europe and its management says it has an clean track record of transparent and self-regulatory conduct.
Yet the manner in which the Abraaj Group has taken over the control of KESC is highly complicated and it would take some real experts to determine how they have been allowed to run a company with 17,000 employees when they do not own one share, either of KES Power or KESC, as of today.
According to the detailed answer regarding ownership of shares, this is the exact explanation provided to The News by Mr Farrukh Abbas. It is reproduced in toto so that experts can decipher the real situation.
The question sent to Abraaj was the following: Has the transfer of 51 per cent shares between Al-Jomaih Group (KES Power) and Abraaj Capital been completed. If so when was it done?
The answer: It is important to note that there is no transfer of shares taking place in the transaction. Abraaj will subscribe for new shares in KES Group, the holding company that currently owns 71.5 per cent of KESC. As a result of this subscription for new shares, Abraaj will end up owning 50 per cent of the issued share capital of KES Power, and therefore will indirectly own 35.75 per cent of KESC. All of the capital (i.e. funds) used for the purchase of KES Power Shares will remain in KES Power and will then be injected into KESC (this is what is meant by capital injection). The total amount to be injected equals US$361 million, all of which will go directly into the business of KESC. This exactly equal the amount that has been invested in KESC by the existing shareholders Al Jomaih Group and NIG, who will continue to hold the same number of shares as before in KES Power, but will be diluted down to 30 per cent and 20 per cent ownership respectively in KES Power. As part of the agreement between Al-Jomiah and Abraaj, Abraaj will have full management control of KESC.
These top level connections to the political leadership of the country apart, the Abraaj management has already acquired the reputation of an arrogant, no-nonsense set up which does not care about the consumers of KESC or the Karachi political leadership, an attitude never seen before in any management, not even run by the army.
This became evident last week when a top Jamaat Islami delegation led by Mr Mehnti, tried to meet the top managers at the KESC office but they were not allowed on the 7th floor and security guards were called to shoo them out. A notice has been posted at the 7th floor that prior appointments are required to meet anyone.
Yet while the Abraaj management claims that these top level relationships with the political class have played no role in acquiring KESC or running it, the 28-page document submitted to The News denies these claims of not being a ‘most favoured company’, even before it has acquired the stakes.
For instance Abraaj has confirmed the following special favours given to the company in the last few months, eversince Abraaj started the due diligence process to acquire KESC. These statements of fact were made in answers to various questions in different contexts:
* While Abraaj has already taken over KESC and started running the show, the document says: “Management control of KESC will transfer fully to Abraaj once the transaction has been completed. “The Consortium agreement has been signed between Abraaj and KES Power (Al Jomaih Group, the previous owners) and there are a number of conditions precedents that need to be satisfied before the subscription of shares can take place.”So factually Abraaj has no shares in KESC as of now but has been handed over the management.
* “KES Power and the Government of Pakistan, as the existing shareholders of KESC, requested that Abraaj make its new management team available to the company prior to transaction completion”. Why the GOP was so interested in an Abraaj takeover even before the formalities and transfer of shares was completed has not been explained.
* The new senior management team was appointed and empowered by the existing Board of Directors, including the Government, through circulation without any formal Board meeting.
* “Abraaj’s entry into KESC will occur once the GOP approves a waiver to the Sales-Purchase agreement signed between the Privatisation Commission and KES Power in November 2005. The GoP has to approve the transaction and sale of new shares by KES Power to Abraaj by Nov 28, 2008 after which the shares would be available for transfer to Abraaj.”
* Although Abraaj has yet to acquire the shares, Government of Pakistan has already approved a petition awarding Disco Status to KESC which means buying Wapda electricity at 25 to 30 per cent of the current rates. This concession was denied to all previous managements of KESC for years, not given even by General Pervez Musharraf to army generals running KESC. Yet Abraaj is so influential it says: “Following consultations with the GOP, and after filing a detailed petition with NEPRA, Abraaj and KESC were able to convince the Government and NEPRA that this discriminatory treatment must be reversed and KESC must be treated on par with all the other Discos (distribution companies) in the country. NEPRA issued a determination in this regard following full consultations and hearings….It is important to note that key beneficiaries of this decision are the consumer of Karachi.”This decision would save KESC Rs30 billion in money it owes to Pepco and in future it will get electricity cheaper from Wapda.
* Regarding new concessions from the Zardari Government, Abraaj says:: “All that has been done is address actual problems and issues faced by KESC and to try and find solutions to these problems,” and significantly admits: “Some of these problems that were addressed had been lingering for years, without adequate focus from either the management of KESC or the Government….With active effort many of these problems have been solved, or at least begun to be solved..”
* In a significant claim, the Abraaj statement says: “Without active involvement from Abraaj and the new management team, many of these issues would have remained unresolved.”
* Government of Pakistan has already settled the dispute of pending payments between KESC and Wapda/Pepco on KESC’s terms. Besides the above fast track concessions, this is a major achievement as this was a lingering issue since 2004 but was resolved even before Abraaj has acquired the KESC shares. Abraaj, however, maintains that “Its (the Wapda dues) elimination does not alter KESC’s financial position and does not, in any sense, amount to a write off.”
* Abraaj and Government of Pakistan have already agreed on amendments in the Implementation Agreement which was originally signed between KESC and the Government when KESC was privatised to Al-Jomiah Group in Nov 2005. The Abraaj statement claims these amendments will “bring the agreement up to date and to clarify the support which the Government will provide (to KESC under Abraaj).”All these decisions and agreements have been possible not because the top managers are relatives of President Zardari but because they are so smart and competent, within days and weeks they have moved the mountains and forced the bureaucratic machine to move in their favour at top speed, so that when they take over the company fully, nothing is left to decide and they can concentrate on providing electricity to the people of Karachi now burning KESC bills and shouting slogans on Karachi streets.
This smart management is being paid a huge price for this job. According to KESC insiders the total bill of Mr Abbas and his 40 executives is the same US$ 8 million which was paid to Siemens for operation and maintenance contract by the Al-Jomaih Group. But Siemens was an operations company with engineers and equipment, while these 40 executives are managers with a few engineers but no equipment.
When Abraaj was asked about this huge monthly salary tabs, ranging from Rs 1 million at the lowest level to Rs 5 million for the chief executive, plus the perks, Abraaj’s written response was: “Compensation for the new management team has been approved by the Board of Directors of KESC and is paid by the company. The Government of Pakistan’s Directors have also approved the compensation to be paid to the CEO.”
But Abraaj refused to confirm or deny the figures saying: “Being a public company, the total salary costs for the CEO and the management team will be disclosed in the annual audited accounts but at this stage it is sufficient to say that they are competitive and commensurate with comparables available in the corporate sector of Pakistan.”
The statement, however said: “The numbers quoted by you are incorrect,” yet at another point in the statement, Abraaj says: “These individuals did not join KESC for salary inducements, rather they left lucrative professional careers elsewhere in order to be able to turnaround KESC and participate in a story that hopefully will have a beneficial impact on the lives of millions of people.”
This last statement is amusing as nowhere in the world any corporate executive leaves a lucrative job to “participate in a story”to impact millions of lives. That basically is politics.
Also found out the new Chief Financial Officer of KESC, Mr Jalil Tareen, (a distant cousin and a good friend of Mr Shaukat Tareen) salary alone is Rs. 35 lacs (See Bolta Pakistan, July 14, 2009)