17 - 23, 2002
INTRODUCTION OF INTEREST-FREE SYSTEM NOT POSSIBLE, SC
The federal government on Thursday informed the
Supreme Court that transformation of economy into the interest-free
mode was impossible and any such attempt would result in anarchy in
Advocate Raza Kazim, representing the federation
before the Shariat Appellate Bench of the apex court, stated:
"The federal government has found that transformation of entire
financial system is not practicable, and if attempted there is high
degree of risk and likelihood of a permanent damage to the already
fragile economy of the country". However, he continued, the
government was committed to allowing the Riba-free banking as a
parallel banking system in the country and had already allowed setting
up of Al Meezan Bank.
He said the government supported the review
petition filed by the UBL, seeking reversal of the Riba judgement on
the grounds that it was based on erroneous interpretations of Holy
Quran. The arguments advanced by the UBL counsel were adopted by the
The Shariat Appellate Bench consisted of Chief
Justice Sheikh Riaz Ahmad, Justice Munir A. Sheikh, Justice Qazi
Mohammad Farooq, Justice Dr Khalid Mehmood, and Justice Dr Rashid
The counsel raised objections about the
jurisdiction of the Federal Shariat Court to decide matters of
far-reaching implications like the present case. He said the federal
government believed that the Constitution was a document which was the
result of Ijmah, and Chapter 3 of the Constitution, providing the
establishment of a Federal Shariat Court, could not be permitted to
nullify the rest of the provisions of the Constitution.
He said the Constitution, which to him was dominant
to Chapter 3 of the Constitution, already provided under Article 38
that Riba would be eliminated from the country "as early as
Justice Farooq inquired if the counsel was saying
that deadline for the implementation of the Riba judgement should not
Sitara Chemical Industries Limited — the flagship
company of the Sitara group — is all set to issue the country's
first quoted private sector corporate bond, that would be based on
profit and loss sharing.
Around 22 Term Finance Certificates (TFCs) have
been floated by the corporate sector in the country's debt market so
far: five this year; 12 last year and ten during all of the five years
before. The earliest such debt instrument was perhaps the Rs232
million TFC of Packages Limited that was issued on February 7, 1995.
But while all of those TFCs have offered a floating yield, Sitara
Chemical's upcoming TFC would be the first to offer the investors, a
return on profit and loss sharing basis.
The size of Sitara's TFC — expected to hit the
private debt market on June 19 and 20 — would be Rs360 million with
pre-IPO at Rs255 million and Initial Public Offering (IPO) amounting
to Rs105 million.
DEWAN GROUP MAY MERGE COS IN DSFL
Market talk suggests that the Dewan group is taking
a hard look at the possibility of merging all three textile companies
into the flagship fibre unit.
"There have been 'rumours' in the market that
the group is actively considering merger of Dewan Textile Mills; Dewan
Mushtaq Textile and Dewan Khalid Textile into Dewan Salman Fibre
Limited (DSFL)," say analysts at brokerage, Taurus Securities.
If the group gives in to the urge to merge, it
would be following in the footsteps of DSFL's principal competitor,
Ibrahim Fibres Limited, which had recently amalgamated with Ibrahim
group's textile mills and the captive power plant.
The recently released results of Dewan group's
textile companies for the half year ended March 31, showed Dewan
Textile making an operating profit of Rs130 million; Dewan Mushtaq
Rs27 million and Dewan Khalid Rs24 million.
DISTRICTS TO HAVE 40PC SHARE
The Sindh Finance Minister Abdul Hafeez Sheikh
announced on Thursday the outlines of the proposed interim award of
the Provincial Finance Commission (PFC) of Sindh which provisionally
suggests allocation of 60 per cent funds for the provincial
administration and 40 per cent to be shared by the 16 districts.
26PC HBL SHARES OFFERED FOR SALE
The Privatization Commission (PC) has offered a
minimum stake of 26 per cent of government shares in Habib Bank
Limited (HBL) for sale to strategic investor to proceed with the
privatization of another major transaction in the financial sector
after the bidding process of UBL conducted on Monday.
The State Bank of Pakistan has suggested the
government to accelerate the pace of public investment and "raise
it by at least 20 per cent" in the forthcoming budget, compared
to actual utilization in the current fiscal year, to strengthen the
foundation for growth and to stimulate the economy.
KARAMAT CALLS ON CHIRAC
French President Jacques Chirac on Tuesday said he
would do "everything in my power" to help bring about a
de-escalation in the Sub-continent.
Mr Chirac gave the assurance at a meeting with
former army chief Gen (retd) Jahangir Karamat, President Pervez
Musharraf's special envoy
ABDULLAH OFFERS HELP TO RESOLVE DISPUTE
President Gen Pervez Musharraf had an extended
meeting with Crown Prince Abdullah bin Abdul Aziz of Saudi Arabia on
Tuesday in which all subjects of mutual interest were discussed.
Sources said that during the one-to-one meeting
Pakistan-India relations and the overall situation in the Middle East
came under discussion. The situation confronting the Ummah was also
discussed. Sources indicate there was complete unanimity of views on