Petitions Challenging KASB-Bankislami Merger Dismissed By Honorable Supreme Court
The Honorable Supreme Court has dismissed the petitions of members/shareholders of defunct KASB Bank Ltd. challenging the amalgamation of defunct KASB into BankIslami. The defunct KASB Bank Ltd. was merged by the State Bank of Pakistan with and into BankIslami on 7th May, 2015, with the approval of Ministry of Finance, Government of Pakistan.
This merger was challenged by the sponsor shareholders and other shareholders of the defunct KASB Bank through constitutional petitions. However these petitions were disposed of by the Honorable High Court of Sindh vide order dated 17th April, 2018, rejecting the Petitioners plea of setting aside the merger. In addition Honorable High Court issued certain directions to State Bank of Pakistan (SBP) under which it required
- To give notice to those persons who were member of the (defunct) Bank as on 27-4-2015 inviting objections to the negative valuation of the (defunct) Bank as set out in the scheme of amalgamation.
- To prominently post the auditor’s report regarding the valuation of the (Defunct) Bank on its (SBP) website.
- To consider all objections that may be received and to issue reasoned and speaking order.
- To pay compensation to the members of the defunct Bank, if any, by itself, without any liability of BankIslami Pakistan Ltd.
In accordance, SBP had issued an order dated June 28, 2018, disposing of the objections filed by the members of the defunct KASB Bank, with the observation that objecting members/shareholders had not raised any substantial ground for increase in valuation justifying payment of any compensation to the members/shareholders of the Bank.
In the meanwhile, constitutional petitions were also filed by the aforementioned petitioners in the Honorable Supreme Court of Pakistan against Order dated 17th April 2018 of the High Court of Sindh, which were heard and subsequently dismissed by the Honorable Supreme Court bench vide Order dated 23rd August, 2018.