The persisting confusion and uncertainty regarding the privatization of the United Bank Limited (UBL) seem to be over with the winning of the deal by the Abu Dhabi (UAE) Group & Bestway Holdings.

This group has increased its bid from Rs12.3 billion to Rs13.35 billion and has been declared eligible to acquire 51 per cent shares of the UBL along with the transfer of management.

There is no second opinion about it that the government should get the maximum price for its assets. But then there is no denying the fact that certain laid-down procedure should also be adhered to which seemingly has been compromised by denying the UBL to the MCB group which was declared the highest bidder in previous bidding. Minister for Privatisation Altaf Saleem is on record as having said that PC was happy to hand over the UBL to the MCB group after having received a Rs12 billion bid against the reference price of Rs11.8 billion.

Insiders said that the process of privatization was compromised as the government was fearing that in case the UBL was given to the MCB group, there will be large scale retrenchments and the closure of branches. “These days we can not take any political risk of creating any unrest and had the UBL given to Mian Mansha group, it would have certainly created problems for the government”, an official said.

He said that the Abu Dhabi group has assured the government that it will not remove people from the Bank nor any branch will be closed. “Rather we were told that they would inject lot of money into the UBL to make it profitable”, he claimed.

There had been Rs30 billion injection in the UBL, Rs 20 billion alone in the first Nawaz Sharif government to remove its losses and make it financially viable. However, nothing worked including the hiring of bankers from foreign banks on heavy salaries.

The MCB group was adamant not to take part in the fresh bidding. But ministers for finance and privatisation almost forced Mian Mansha to go for the fresh bidding of the UBL. The group has also solicited the legal opinion from constitutional and legal experts including Syed Sharifuddin Pirzada and Khalid Anwar. Both of them have reportedly advised Mian Mansha to stay away from the fresh bidding as his case was quite strong. On the other hand, the government also consulted Attorney General Makhdoom Ali Khan who reportedly said that the decision of the cabinet committee on privatization (CCOP) was very much in line with the Privatisation Law and that let the MCB challenge the issue in the court. The attorney general had given in writing to the minister for finance that the government’s case was strong.

Nonetheless, the UBL transaction will not go unnoticed by those who maintain that the process must be followed whether the government loses certain amount of money. What message the deal will give to other local and foreign investors is big a question.

“The clearance of the UBL deal in my sincere view will certainly give a positive message to the investors”, claimed a senior official. But he also admitted that people might question as to why the highest bidder who followed the laid-down procedure was denied the bank.

But the presence of the representatives of the MCB group in the fresh bidding was intriguing specially when they did not have to take part in the bidding. They kept saying that they were there only as an observer. Similarly, the representatives of third bidder in previous biding — the Union Bank group including Shaukat Tarin, was also present there but surprised everybody by not even uttering a word during the whole ceremony.

There is a need today that the government should review the whole privatisation process so that nothing goes wrong when it plans to bring the Habib Bank transaction in the market shortly. Many people do not believe that CCOP had such a big role to change the rules on its own.

Some people are also quoting the statement of the minister for privatisation after the first bidding that the issue of the UBL transaction will be taken to the federal cabinet for any final decision. Why it has not been taken to the cabinet is a question mark. He had told reporters that since a new situation had arisen in which there was a highest bidder and there was a second highest bidder who came out of the process and then increased its bid from Rs4.8 billion to Rs12.3 billion for which the issue needed to be taken to the cabinet.

Generally, in Pakistan there had been complaints about the transparency of the privatisation process. During both the terms of Benazir and Nawaz Sharif, there were allegations of favour for selling the state assets. And in the process two of the chairmen of the Privatization Commission Lt.Gen. (retd) Saeed Qadir and Syed Naveed Qamar— had been sent to jail. Another PC chairman Khwaja Asif, though did not go to the jail, but faced a number of inquires by NAB and other agencies beside being under house arrest for quite some time.

During the present government, the privatisation process had been slow. Why does it take so long to finalise any deal is not understandable specially when the claim is to have the whole process very transparent.