K-Electric Ltd announced on Friday that the business sector’s supreme regulator has ordered it not to alter the composition of its board of directors “until further orders.”
K-holding Electric’s company is KES Power Ltd, which is registered in the Cayman Islands and holds a 66.4 percent stake. The Pakistani government owns 24.36 percent of K-Electric, while institutional investors and the general public hold the remaining shares.
The latest decision by the Securities and Exchange Commission of Pakistan (SECP) follows the disclosure that Sage Venture Group Ltd, a British Virgin Islands-registered special purpose organisation, purchased a major controlling portion of K-Electric’s shareholding last month.
Abraaj Capital maintained a substantial position in KES Power Ltd until 2019, when its CEO, Arif Naqvi, was arrested for misappropriating investor cash.
K-Electric Ltd disclosed in a filing dated October 20 that “changes have been completed” involving IGCF General Partner Ltd (IGCF GP), a fund manager, and the Infrastructure and Growth Capital Fund L.P. (Fund), the fund’s asset owner. Sage Venture Group purchased controlling stakes in IGCF GP and a portion of the fund’s limited partnership interests.
Consequently, KES Power-nominated K-Electric board members Boudewijn Clemens Wentink, Khaqan Saadullah Khan, and Saadia Khurram resigned. This caused the SECP to request comprehensive information from K-Electric regarding its ownership structure and compliance with takeover regulations.
According to the SECP, the most recent information regarding K-ownership Electric’s structure is still “anticipated” because the publicly traded firm has requested additional time to comply with the regulatory requirement.
“The resignation of three non-executive directors chosen by KES… raises suspicions that indirect shareholding of (K-Electric) through KES has changed,” the SECP’s supervisory department stated in an official notification.
The News originally reported the possibility of a change in K-ownership Electric’s on October 12. The following day, however, K-Electric made a public statement expressing its ignorance of any such development. Later on October 20th, the company issued a stock notification confirming the development, albeit in extremely obtuse wording.
Analysts believe the deal may have resulted from the Cayman Court-authorized sale of certain assets of Abraaj Investment Management (AIM), which is now undergoing worldwide legal liquidation. AIM held a majority stake in KES Power. Any investor who succeeds AIM must then assume control of K-Electric.
In 2016, Shanghai Electric Power agreed to purchase a majority stake in K-Electric from Abraaj for $1.77 billion. However, the deal never occurred since the seller did not secure the necessary clearances from the relevant authorities.