KARACHI, April 3: The first of the two ‘hostile takeover’ bids ever witnessed in the country’s corporate history, looks to have been averted — at least for the time being — through negotiations between the parties: that of Engro Chemical Pakistan by the Dawood group. And the fate of other attempted hostile takeover of the Adamjee Insurance Company by the Mansha group is still unclear, though its board is scheduled to meet on Friday, after a gap of three years.

A notice in the press on Thursday by the Engro posted names of 16 persons, who had filed nominations for a place on the ten- member board of directors of the Engro Chemical Pakistan Limited. Elections are to take place at the company’s annual general meeting on April 10.

For some time now, market was rife with rumours that the sitting directors of the Engro board had reached understanding with the corporate raiders: The Dawood group. An announcement by the Engro Chemical Pakistan Limited on Thursday, confirmed as much: “We hereby notify that the Suit No.273/2000 filed by the company in the High Court of Sindh against various Dawood Group Companies was compromised by the parties on April 2, 2003, on the basis that the issues raised in the suit will be settled by the concerned Regulatory Authorities i.e. the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan,” the notice concluded.

According to market sources, 10 of the 16 contenders for a place on the board, appear to be nominees of the Engro management. Conspicuous by his presence among the other six is the name of Hussain Dawood, who is thought to hold 27 per cent or 36 million of the 153 million outstanding shares in the Engro Chemical. The candidates in the run include: Yakoob Admanay; S. Naseem Ahmad; Javed Akbar; Muhammad Ali; Muhammad Bashir Chamdia; Pervez Ghias; Taufique Habib; Sikandar Mustafa Khan; Zaffar A.Khan; Khalid Mansoor; Arshad Nasar; Asif Qadir; Khalid S.Subhani; Asad Umar; Shahzad Dawood and Hussain Dawood.

In the other development, the board of directors of Adamjee Insurance Company would meet on Friday to approve accounts for the year 2002. According to financial forecast by Mohammed Sohail, head of research at brokerage house, InvetCap, the company could report a return to an after tax profit of Rs170- 190 million for the year, from record loss of Rs499 million suffered in 2001.

Adamjee Insurance is currently battling the third hostile takeover bid. The first two failed attempts having been made by a local stock brokerage firm in 1999 and the other by a Lahore- based individual investors’ group in 2000. Market sources affirm that Pakistan’s largest conglomerate, the Mansha group possibly is currently holding some 40-50 per cent shares in the Adamjee Insurance, with the group’s flagship MCB alone in control of 30 per cent of the insurance company’s stock.

Meanwhile, The Listed Companies (substantial acquisition of voting shares and takeover) Ordinance that was promulgated in 2002, has come under biting criticism for its lack of adequacy.

One of the lacunas pointed out by a legal expert was that, while in the English law anyone acquiring “substantial shareholding” of 30 per cent had to make an open bid to buy from all shareholders, who wished to sell, our law was devoid of such equitable treatment.

Here anyone taking a 10 per cent stake in a company needed to do no more than disclose his holding.