960416

Facts behind

postponement

of BEL bidding

RECORDER REPORT

KARACHI: The postponement of bidding for Bankers Equity Limited from April 15 to April 23 was caused due to confusion resulting from a telephonic message conveyed to the bidders by the Financial Adviser handling the privatisation of BEL and not due to any media report, as suggested in quarters.

The bidders were scheduled to file their bid bonds of Rs 100m each with the Privatisation Commission on Sunday at 11:00 a.m., April 14, and submit their bids on the subsequent day.

According to the bidders, until April 14 they had dealt only with the Financial Adviser and not with any official of the Commission. As such, they had no reason to disbelieve the message received from the representatives of the auditing firm acting as Financial Adviser on BEL.

The Senior Partner of KMHR Chartered Accountants, Mohammad Hussain called to convey the message of postponement on Saturday night. The message was reconfirmed by his associate, Hasan Bilgrami, as late as 11:30 on Saturday night to some of the bidders.

The report in Business Recorder was published on the basis of the message conveyed to the bidders. Probably unaware of the postponement message of the Financial Adviser, the Commission staff on Sunday morning started calling up the bidders to submit their bid bonds as scheduled.

The confused bidders then approached Commission Chairman Naveed Qamar to seek clarification about the conflicting messages emanating from the Financial Adviser and the Commission.

The Chairman confirmed his meeting with the Financial Adviser who had wanted the bidding postponed to allow more time for bidders to generate resources through re-arrangement of bidding consortium with fervent hope to receive higher bids. The Chairman said "he had given a sympathetic hearing but had not given any explicit decision."

However, the Chairman agreed that in view of the confusion it was reasonable that the bidding be postponed to enable participation of all the four pre-qualified bidders, one of whom, Khalid Bhai Mian of Al-Barka, had gone back to London.

It needs to be noted that bid bonds amounting to Rs 100m in each case should have been in the hands of the bidders on the last banking day i.e. Thursday April 11, 1996, before the scheduled submission and only two bidders submitted their bid bonds on the scheduled time.

The postponement became necessary when two bidders did not put in the bonds on time. The confusion, if any, was caused by a misunderstanding between the Chairman and the Financial Adviser.

According to reports appearing in two English dailies, sources in the Privatisation Commission put the blame for the postponement of BEL bidding on Business Recorder news item of Sunday April 14 about extension of bidding date from April 15, which was alleged to have caused confusion and forced the Commission to extend the auction date.

The job of a newspaper is to report only on-ground realities and the power to postpone, cancel, reject bids or the process rests with the authorities concerned. Financial strength of the intending buyers is an issue for the Commission to judge and not a newspaper.