Abraaj Group offered $20m to get Sharifs' help in sale of K-Electric: WSJ
Government owns a stake in K-Electric and its approval would be required for the sale to go through.
ISLAMABAD (Dunya News) - Wall Street Journal (WSJ) in its report claimed that Abraaj Capital’s founder Arif Naqvi tried offer a $20 million payment to a Pakistani businessman Navaid Malik to sell the Abraaj Capital’s stake in Pakistan-based K-Electric Ltd through the assistance of then prime minister Nawaz Sharif and his brother Shahbaz Sharif.
According to Wall Street Journal, Abraaj was looking to sell its stake in K-Electric Ltd., the electricity provider to Karachi. Arif Naqvi tried to secure the cooperation of Pakistan’s then-prime minister, Nawaz Sharif, and his brother Shahbaz, offering a $20 million payment to businessman Navaid Malik for his help in getting it, according to company emails and people familiar with the situation. The government owns a stake in K-Electric and its approval would be required for the sale to go through.
Shehbaz was “willing to give a strong endorsement” of the deal to Chinese bidders, Mr. Malik said, according to an October 2015 email to Mr. Naqvi from Abraaj partner Omar Lodhi. Mr. Malik said it was “important for him to share every detail with the brothers and get their blessings as well as their instructions as to how this money should be distributed,” such as “a portion to charity” or “a portion to the election fund kitty,” Mr. Lodhi wrote in the email.
When Mr. Naqvi emailed Mr. Lodhi about the $20 million contract for Mr. Malik in June 2016, he wrote, “This document is explosive in the wrong hands.” Abraaj and K-Electric shouldn’t be named in the document, he wrote: “Keep it generic.”
“Noted,” Mr. Lodhi responded. Mr. Malik didn’t respond to requests for comment.
In October 2016, Abraaj announced the sale of the majority stake it controls in K-Electric to China’s state-controlled Shanghai Electric Power Co. for $1.77 billion. However, completion of the sale was delayed by regulatory hurdles.
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K-Electric still hasn’t been sold. A lawyer for the Sharif family said the brothers deny any discussions took place with Mr. Malik as described in the emails.
In his statement, Mr. Naqvi said that he denies being part of any conversation that involved a payment to anyone in political office to facilitate the sale of K-Electric. He said Mr. Malik was an Abraaj adviser on a variety of activities and that the contract was part of a lengthy discussion about the terms of that role. He said the final agreement “ensured that no conflict of interest would occur.” He said he called it “explosive” due to a reference to the potential sale of K-Electric, which was confidential at the time.
