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Khwaja Asif vs Imran Khan: investor speaks and answers key questions

The man at the centre of the PML-N vs Imran Khan controversy over Shaukat Khanum investments, Imtiaz Hydari has come out publicly and blasted Khwaja Asif and his party declaring that his company handling $1.8 billion in funds has already absorbed the drop in value of a sound investment decision taken by the board.

 

“My company, HBG has taken steps to absorb the impairment in value by granting increased shares to SKMT i.e. the reduced value of Sugarland shares will be compensated by higher percentage shareholding of SKMT in Sugarland BVI. This preserves and protects SKMT investment. Additionally, HBG has also provided an undertaking to assist SKMT’s exit from the investment with Capital Protected,” Hydari said in a response released to the media on Saturday.

 

Reacting to the charges by Khwaja Asif, he stated: “I was amazed but more amused as I witnessed the Sherlock Homes-style performance of Khawaja Asif on television. Khoda Pahar aur Nikla Mara Hua Chooha. The Urdu proverb means nothing came out of a huge storm in the tea cup.

 

Hydari said: “It is appropriate to set the record straight since his great discovery from publicly disclosed documents was gathering false alarms and in the process was hurting the finest public charity in Pakistan. If he is a man of any substance, he will appear again on television to Apologise to Imran Khan, SKMT and Imtiaz Hydari. Let me tell you why?”

 

First the facts on the investment: Shaukat Khanum Memorial Trust made a long-term real estate investment with HBG in 2008, when the market fundamentals across GCC were excellent, with a plan to develop it into a project. The decision by SKMT to invest with HBG was not a speculative play, but a long-term investment based on sound judgment of the market fundamentals in a solid real estate, prime location in Muscat in which HBG itself has committed a substantial amount.

 

It is, of course, a fact that Imran Khan had nothing to do with the decision as it was taken by the investment committee of the board of directors. I, being a director in SKMT at the time, refrained from voting to avoid a conflict of interest.

 

There is a misconception being propagated that just because the investment is through an offshore company, it is akin to a ‘benami’ transaction. This is a totally false representation as private equity investments across the world are conducted from such jurisdictions because they are considered investment-friendly.

 

Pursuant to the severe correction in the real estate market following the global economic crisis, it was rightly decided to defer the project. The investment has no leverage. However given the fact there has been impairment in land value, HBG has taken steps to absorb the impairment in value by granting increased shares to SKMT i.e. the reduced value of Sugarland shares will be compensated by higher percentage shareholding of SKMT in Sugarland BVI. This preserves and protects SKMT investment. Additionally, HBG has also provided an undertaking to assist SKMT’s exit from the investment with capital protected.

 

Responding to specific accusations and questions, Hydari said: “Is it a case of Money laundering? – The answer is an emphatic ‘NO’. The investment was not transferred out of Pakistan. It was not for any personal gain. The investment was from the Endowment Fund not Zakat money.

 

Is it an attempt to hide the transaction so we can wonder at his discovery? – Definitely ‘NOT’. It is publicly disclosed.

 

Is it a SPV (special purpose vehicle) with an offshore jurisdiction is benami? – Sorry Khawaja Sahib, you are in the wrong. The entities in this investment have names and declared shareholders who are audited by one of the big four accounting firms.

 

Was the investment speculative and the real estate worthless? – No it was ‘NOT’, as explained above. This is prime land in prime location with excellent development potential.

 

Has the investment lost value resulting in a major loss for SKMT? – Khawaja Asif reads the balance sheet but is unable to differentiate between a note to the accounts and the actual adjustment for impairment in the accounts. No loss has been recorded even though impairment has taken place as explained above.

 

Is a capital protection/guarantee issued by a corporate entity worthless? – How does Khawaja Asif know? Does he know the standing or stature of the corporate and the circumstances surrounding it? Unfortunately he has not bothered to make any enquiries.

 

He asked what the purpose of his sensational outburst could be and answered: “Unable to defend the allegations of money laundering and corruption against his own leadership he has to find something against Imran Khan, the most clean and honest political leader in Pakistan – and Good heavens, all Mr Sherlock Homes could find was a dead mouse (mara hua chooha) – desperately clinging to straws but in the process hurting SKMT and the poor people of Pakistan.

 

Asked by ‘The News’ about his company and its worth, Hydari said: “HBG Holdings is a leading private equity group specialises in managing investment capital from private and institutional investors in the Middle East. The firm is owned by leading investors from the Middle East and manages about $1.8 billion in private equity, asset management and banking.”

Courtesy: The News International

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