20000324

PC drafts law to provide legal cover to investors

TAHIR DHINDSA

ISLAMABAD: The privatisation law has been drafted by the Privatisation Commission (PC) and the federal government will promulgated it after giving it final touches, official sources told Business Recorder.

The law which has been drafted by a British based multinational law firm for the Privatisation Commission, has been found insufficient on a few points by the federal government and needs further work, sources said. The draft misses the spirit of it which was to nip frivolous and vexatious intentions of litigating party.

In its present form the law would be of little help in implementing what has been desired of it. The preparation of the law was initiated to provide cover to the incoming investors legal umbrella, against litigation on employment, state guarantee and policy issues.

Initially the law was deemed to suggest legal parameter for the courts to accept a case against any transaction. But, the draft finalised by PC lack in providing any specific provision in this regard, sources said. It was also proposed that the law through suitable amendments in the current court procedure whereby the litigating party shall have to bear the whole burden of court fee and other costs.

The law has been necessitated for the very reason that more than 300 cases currently pending in the courts against the past 100 transactions through the Commission have dampened investor's confidence in the privatisation process.

The PC has drafted the law in the light of other countries experiences', where such legal cover exists, like Turkey, Sri Lanka, Malaysia and Bangladesh. This was done to bring the privatisation process in Pakistan up to international standards to inject confidence among the investors.

Sources said, the incumbent management of most state-owned corporations were the major impediment in way of smooth privatisation; in many cases the litigation is initiated at their behest. Therefore, the law would sufficiently define parameters for courts where they could judge an appeal against a transaction as frivolous and vexations.