SHC rejects petitions

RECORDER REPORT

KARACHI: Supreme Court of Pakistan has dismissed the petitions of members/shareholders of defunct KASB Bank Ltd. challenging the amalgamation of defunct KASB into BankIslami.

The defunct KASB Bank Ltd. was merged by the State Bank of Pakistan with and into BankIslami on May 07, 2015, with the approval of Ministry of Finance.

This merger was challenged by the sponsor shareholders and other shareholders of the defunct KASB Bank through constitutional petitions. However these petitions were disposed of by Sindh High Court (SHC) vide order dated 17th April, 2018, rejecting the petitioners’ plea of setting aside the merger.

In addition, SHC issued certain directions to State Bank of Pakistan (SBP) under which it is required to give notice to those persons who were members of the (defunct) Bank as on April 27, 2015 inviting objections to the negative valuation of the (defunct) Bank as set out in the scheme of amalgamation and to prominently post the auditor’s report regarding the valuation of the (Defunct) Bank on its (SBP) website.

Also, to consider all objections that may be received and to issue reasoned and speaking order and to pay compensation to the members of the defunct Bank, if any, by itself, without any liability of BankIslami Pakistan Ltd.

In accordance, SBP had issued an order dated June 28, 2018, disposing of the objections filed by the members of the defunct KASB Bank, with the observation that objecting members/shareholders had not raised any substantial ground for increase in valuation justifying payment of any compensation to the members/shareholders of the Bank.

Meanwhile, constitutional petitions were also filed by the aforementioned petitioners in Supreme Court of Pakistan against Order dated April 17, 2018 of SHC, which were heard and subsequently dismissed by Supreme Court bench vide Order dated August 23, 2018.