Tag: Business

The privatization of the Heavy Electrical Complex (HEC) has entered into its final stages.

Currently, different options for the determination of Reserve Price for the bidding of HEC shares are being considered by the Privatisation Commission (PC) before the bidding process is initiated with the approval of the Federal Cabinet.

Importantly, a breakthrough has been achieved in several of the pending matters related to Employees and settlement of liabilities due towards the financial institutions. PC is ensuring that no further liabilities are added to the balance sheet of HEC while the Ministry of Industries & Production is also playing a positive role to retain the credit rating of the entity.

HEC is a Government-owned entity under the administrative control of State Engineering Corporation, the shares of which are fully owned by the Ministry of Industries & Production/Federal Government. Located in Taxila, Heavy Electrical Complex (HEC) started its commercial operations in 1998.

The prime business of the HEC is to prepare high voltage electric transformers used by the power distribution entities along with services for testing, repairs, and onsite commissioning of transformers.

Also, Power Division is in agreement that no adverse action is taken against HEC by any DISCO. The settlement of long-standing dues of KPEZDMC is another milestone that has been successfully achieved with the cooperation of the concerned stakeholders.

The privatization of HEC has generated interest from a number of investors. The bidders have been prequalified by PC and the pre-bid meeting was also held in August 2021. Most of the issues raised by the pre-qualified bidders in the meeting were satisfactorily addressed.

It is expected that privatization of HEC will lead to the creation of positive sentiment for the overall privatization program presently underway. Multiple other privatization transactions of a larger ticket size and quantum are also queued up, which include the two RLNG based Power Plants, Pakistan Steel Mills, Guddu Power Plant, and Nandipur Power Plant. The bidding of HEC is likely to be held within this quarter after the approval of the Reserve Price of bidding by CCOP and Cabinet.

Privatization is a very thorough process wherein extensive due diligence and due care are involved in each phase. Starting from the financial, legal, and technical analysis of the entity being privatized to its marketing, inviting interests of potential bidders, outreaching to potential investors, and most importantly, clearing the encumbrances which could adversely impact the transaction.

Most of the entities offered for privatization by the Ministries are loss-making and have complex financial and legal issues, which take extensive efforts by Privatization Commission to bring to a level where the HEC transaction has eventually reached.

Source: Pro Pakistani

The Higher Education Commission (HEC) informed a Senate panel on Friday that the performance of many renowned universities has been observed to be dissatisfying.

Senator Irfan Siddiqui chaired a meeting of the Senate Standing Committee on Federal Education and Professional Training at the Parliament House, during which HEC officials revealed that 32 universities had performed poorly in 2018-19.

These universities include Quaid-i-Azam University (QAU), the University of Karachi (KU), the University of Peshawar, the International Islamic University Islamabad (IIUI), Islamia College University Peshawar, Government College University Lahore, and the Pakistan Institute of Development Economics (PIDE).

“This is something shocking and alarming. Institutions which are otherwise known for their good reputation are under-performing,” Senator Siddiqui said.

He said that HEC must work on improving these institutions and directed it to instruct them to justify their low performances.

The senator also highlighted that fake journals are being published in many universities that are promoting low-quality research. He constituted a subcommittee headed by Senator Rana Maqbool to review the articles published by various universities, including QAU, the University of Punjab, the University of Peshawar, the University of Balochistan, and KU.

Source: Pro Pakistani

The Central Depository Company has launched Pakistan’s first Professional Clearing Member in collaboration with the Pakistan Stock Exchange and the National Clearing Company of Pakistan Limited under the Regulatory Impetus of the Securities & Exchange Commission of Pakistan.

Around 25 Trading Only Brokers have signed up for the services of the new Professional Clearing Member (PCM). The new regime will be completely implemented by December and all the Trading Only Brokers will start using the PCM’s services by shifting their clearing, settlement, and custody functions to the PCM.

The new PCM regime has been successfully implemented after the introduction of a relevant regulatory framework by the Securities & Exchange Commission of Pakistan (SECP) and capital market infrastructure entities, leading to the launch of EClear Services Limited (ESL).

The SECP had tasked all the three SROs (the CDC, the PSX, and the NCCPL) in the Capital Market with implementing this novel concept in Pakistan, and the CDC was assigned with leading the implementation as Project Manager.

Also known internationally as the General Clearing Member (GCM), the PCM is an international best practice of ‘Third Party Clearing’ service provider whereby an entity (normally not a trading member of the Exchange), provides clearing and custodial services to the trading members of the Exchange, who either voluntarily or by virtue of the Regulatory framework do not act as Clearing Members of the Clearinghouse.

The SECP introduced the new Broker Regime under the Securities Brokers (Licensing & Operations) Regulations in 2020 to categorize securities brokers into three categories: Trading & Clearing, Trading & Self Clearing, and Trading Only. One of the major requirements for the implementation of the new Broker Regime was the introduction of an independent third party Custodial, Clearing & Settlement service provider for the clearing and settlement of the trades executed by Trading Only Brokers.

This hi-tech solution will bring automation, efficiency, and transparency for the existing market players and will pave the way for newcomers in Pakistan’s capital market as brokerage service providers and investors.

This initiative will also expand the investor base of the Pakistan capital market as it will provide investors with a completely new and digital experience of the capital market while giving them the confidence of asset protection by a reliable and independent third-party service provider. Hence, with the implementation of this regime, Pakistan’s capital market is poised to stand on par with the established markets, particularly in terms of investor protection and ease of doing business.

Source: Pro Pakistani

Universal Network Systems Limited (UNSL), a leading technology-driven e-commerce logistics company in Pakistan, has become the first tech-logistics company to make it to the list of Growth Enterprise Market (GEM) Board of the Pakistan Stock Exchange (PSX).

More popularly known with its brand name ‘BlueEx’, UNSL was established in 2005 as a domestic cargo consolidator. In 2011, it shifted its focus toward the e-commerce courier and logistics business. The company was the first in introducing the ‘Cash-on-Delivery” concept in Pakistan.

PSX has granted approval of UNSL to be listed on its GEM Board, a listing platform aimed at facilitating growth-oriented businesses whether small, medium, or greenfield businesses to raise capital to fund their growth and expansion plans.

UNSL will be the first company from the courier and logistics industry of Pakistan to be publicly listed as well as the second company to opt for the GEM Board. The company is aiming to issue 6,857,000 ordinary shares at a fixed price of Rs. 65/- per share to accredited investors as per applicable rules of PSX for the GEM Board. The subscription is scheduled for November 17–18, 2021.

UNSL is the only player in the e-commerce logistics space providing a full spectrum of 360-degree logistics, warehousing/fulfillment, cargo, and courier services, from First Mile pickup to Last Mile delivery, to its business partners.

Being the only IATA-certified courier company in Pakistan, UNSL has the exclusive cargo agency of Serene Air for its domestic time-sensitive cargo, as well as major international airline operators. It also has the most extensive capacity and network of warehousing across Pakistan.

UNSL is the sole franchisee of Aramex, one of the leading courier and logistic companies listed on the Dubai Financial Markets, for all business from/to Pakistan on the Aramex global network.

UNSL is currently engaged with several high-profile and prominent domestic and global customers in its different array of services and has a strong list of opportunities in place on which UNSL aims to capitalize in the next few years. Topline Securities Limited and Arif Habib Limited have been appointed as the Joint Lead Managers to the issue.

Source: Pro Pakistani

The Federal Board of Revenue’s (FBR) biggest documentation initiative of integration of big retailers with the FBR’s Point of Sales (POS) system may suffer a serious setback due to the alleged connivance of vendors and retailers to under-report sales and evade sales tax.

ProPakistani reliably learned that the big retailers called Tier-I retailers have started using FBR’s POS system in all major cities of the country. Retailers are displaying that their retail outlets are integrated with the FBR’s computerized system to record sales and taxes deposited. The consumers have been issued computerized receipts to be used in future prize draws of the FBR.

The data of the purchasers including their cell numbers have been fed into the system. The FBR is in the process of registration of big retailers with the help of the POS system.

The FBR had provided a list of vendors to the retailers, who were permitted to install point of sale software at the outlets of the retail outlets. The FBR has also provided names and contacts of 46 vendors operating in major cities like Karachi, Lahore, Rawalpindi, and Islamabad. These FBR’s approved vendors have installed the POS software at the business premises or retail outlets of the Tier-I retailers across the country.

The FBR has also offered incentives like a reduced sales tax rate and permission of charging Re. 1 per invoice from consumers to meet service charges to encourage registration.

According to the SRO 1006(I)/2021, the name is required to be recorded when the customer is liable for tax or credit or invoice value is above Rs. 100,000.

The POS Service Fee of Re. 1 per invoice shall be collected by the T-1 retailer from the customer and shall be deposited along with the monthly sales tax return, which is being amended to include a row for “POS Service Fee”.

The interesting part of the story is that the FBR has no mechanism to check the authentication of the installed software at the retail outlets by the concerned vendors. The FBR has not been engaged in the verification of authentication of the software installed by the vendors at the retail outlets. No such exercise has been carried out to verify the working of each software installed at the retailer’s outlets. There are very strong apprehensions that the retailers and vendors can mutually bypass or forge the software to under-report the sales at their retail outlets.

A source on strict condition of anonymity said, “Few FBR’s vendors are offering the retailers to install forged software or accurate software with different prices. Retailers have to pay higher prices for software that can cheat the FBR system. A simple button in the machine can do the whole job. The software would simply reduce the reported sales to the FBR’s computerized system. This means that the under-reporting of sales can easily be done in the connivance of the vendor. The fraud came to light when the FBR detected one such case of a vendor who installed software at the retail outlet which was forged to under-report the sales”, he added.

To deal with the situation, the FBR needs to verify the functioning and authenticity of the POS system installed at the retail outlets. There can be cases where the vendor installs software that can show no sales, fewer sales, or conceal total sales.

The FBR needs to place some foolproof mechanism to save its biggest documentation measure, the source added.

Under rule 150ZEB of the Saless Tax Rules, 2006, the registered persons (integrated suppliers) shall install such fiscal electronic device and software, as approved by the Board, available on its website with complete technical instructions for installation, configuration, and integration.

The integrated suppliers shall notify the board, through the computerized system, of all their outlets and the integrated supplier shall register each point of sale to activate the integration.

Source: Pro Pakistani