Latest Posts

History of Owned Companies by PM Nawaz Sharif and Family

As promised at the end of the previous post, here’s some extended detail into the wealth of the Sharif family. Almost all comes from publicly available documents that the politically active members of the family have filed at the time of contesting elections, or regular asset declarations as members of legislature, as required by the law. Starting with some history.

The Ittefaq Group

Most accounts in Pakistan attribute the entire Ittefaq Group holdings to the Sharif family. That seems be largely untrue.  In 1998, as per Shahid-ur-Rehman’s book, 119 offsprings of the founder of the Ittefaq Group were fighting court cases on inheritance and asset division. The descendants of Ittefaq Group split into two business groups. Five brothers in one and two in another, with the majority five operating Ittefaq, Sharif and Haseeb Waqas Groups. He lists House of Ittefaq assets, as estimated by a H U Beg Committee in 1990, at Rs 10 Billion. Since then, asset distribution has led to some going off into an Al-Shafi Group which now controls some of the more valuable assets like the Ittefaq and Kashmir Sugar Mills. For assets which possibly weren’t distributed again after the initial split, they remain divided into the first, second and third generation descendants of 5 brothers: a number surely over 100 individuals.
Ittefaq Foundries itself went bankrupt quite a while ago, with unpaid loans on its book. To repay the loans, the unit was sold but the deal rejected by the banks. The case seems to be stuck in a legal limbo as of now. The electricity bill default from LESCO of Rs 40 million is from this same unit too, but it was long ago disconnected, when bankruptcy was filed. The classist nickname ‘lohar’ that the salariat class uses for the Sharifs, is no longer even true.
The following publicly listed companies were listed in 1998 (and continue to be mentioned as) to be belonging to the larger Ittefaq family: Brothers Textile Mills (KSE:BROT), Hasseb Waqas Sugar Mills (KSE:HWQS) and Khalid Siraj Textile Mills (KSE:KSTM). Brothers in it’s annual report does not list any Sharif family member amongst the larger shareholders. Haseeb Waqas Group is owned by the descendants of Mian Meraj Din, and split from the Sharif family. Khalid Siraj group belongs to the descendants of Mian Siraj Din, who is split from the Sharif family too. Both groups have their larger assets in publicly listed companies, and hence valuations available to the public. These two groups and their companies are often listed as part of Sharif net worth, but are not part of Sharif holdings. In short, the following assets listed for the politically active Sharifs actually do not belong to them:
Khalid Siraj Textile Mills
Brothers Textile Mills
Brothers Steel
Ittefq Sugar Mills
Ittefaq Steel Mills
Haseeb Waqas Sugar Mills
Still commonly run is the Ittefaq Hospital, with it’s post-graduate training, nursing and paramedic schools. The hospital did the first neo-natal open heart surgery in Pakistan and apparently remains the leading hospital in the country for cardiovascular surgeries amongst children.
Note: Sharif Oil, Sharif Solvent etc belong to another group of a similar name.
The Sharifs

In this section, the Sharifs means the descendants of Mian Muhammad Sharif, the father of Nawaz and Shahbaz Sharif.

The assets of the Sharif Group itself are going into three generations now. Within the immediate Sharifs, a distribution occurred in the mid 2000s, and the father left all three sons with individual housings in London too. From the Sharif Group’s own website, they claim around $300 million in business and $100 million in real estate holdings.

Mian Muhammad Sharif’s wife Shamim Akhtar owns the Jati Umra estate that the larger family resides in, and a lot of the family assets still. Nawaz has 2 sons (Hassan, Hussain) and 2 daughters (Maryam and Asma). Shahbaz has 2 sons (Hamza, Salman) and a daughter, Rabia Imran. Abbas Sharif had 2 sons and 2 daughters too. This brings the total living shareholders of the family estate in the first two generations to 18 (1 wife, 2 sons & their 3 wives + 1 rumoured, and  11 grandchildren). With great-grandchildren, the total descendants amongst whom family assets have been distributed will amount to around 40.

The Saudi assets involved a steel mill established in Jeddah after being forced into exile, started with a reported Rs 7 Billion in capital. The Al-Azizia Steel Mill was sold off after the death of the family head, Mian Muhammad Sharif to an Al-Tuwairqi Group conglomerate, with whom the family had earlier done investments with. It seems they wrapped up the major business in Saudi Arabia and only hold diversified investments there. The family’s earlier investment, a steel mill in the UAE, set up after the Ittefaq assets were nationalized in the 70s, was closed far earlier. Long standing rumours that the family holds business interests in India have no specifics or the slightest verifiable details, and seem false.
Some of the older/more famous/major family assets have been/are in the process of being liquidated/pending court judgements. See here for some details.
In 1998, Shahid-ur-Rehman accused that the ladies of the Sharif family, naming Mariam, that they owned a “Gulshan Carpets” export business, that is listed in someone else’s name.
All the Sharif family owned private companies seem to have share valuation at Rs 10. The list of the companies is based on shareholding declarations of Nawaz Sharif, his wife, Shahbaz Sharif and his wives and Hamza Shahbaz and his wives.


Sharif Family Owned/Partially-Owned Companies : Sheet1

Note: Due to FED not being included in these numbers, the total corporate tax burden can often be misrepresented. No tax paid might be due to loss making enterprises.
Khalid Siraj Industries seems to be Khalid Siraj Textile Mills, which as mentioned before belongs to another branch of the family, one generation above. Shahbaz had inherited shares in it, which now belong to Hamza. The 10,000 shares represent 0.0083% of the company’s total shares.
Ramzan Energy is registered, but not a full-fledged company yet. It is a bagasse power plant and was supposedly producing 2MW earlier, with a planned capacity of 100MW. Imran Khan mentioned this in his speeches recently, claiming an investment of Rs 7.5 Billion has been done for it. Salman Shahbaz confirmed the obvious and publicly declared, the ownership and the construction of the plant, but not the capital amount. It is expected to become operation in 2015.
Hamza Spinning Mills is in the SECP dormant companies list (CIUN 25077). It had an authorized capital of Rs 175 million and a paid up capital of Rs 27.35 million. Abbas & Company is registered with the SECP, but not in the FBR taxpayers directory. It may possibly be a holding company since the only two family members with interest in it are Mian Nawaz Sharif and his wife or just an extended family/friend’s, as they have nominal loans extended to this company. Quality Chicken is only held by the first wife of Shahbaz Sharif, and is not listed with the SECP, suggesting it’s defunct. Sharif Dairy Farms might just be sending all product to Sharif Milk Products or was in a loss, hence the zero corporate income tax.
Hudabiya Engineering and Paper Mills have a very long and industrious history of being accused of serving as a money laundering conduit, to an associated loan default case. It remains part of the Sharif family’s business empire, but they’ve moved on to more profitable investments like poultry feed, poultry, dairy and more. These businesses were set-up in the 2000s when the elder Sharifs were in exile, and run by Hamza.
The family also runs a charitable Sharif Trust. The trust runs a ‘Sharif Education city’ and ‘Sharif Medical City’ comprising of the Sharif College of Engineering and Technology, affiliated with UET Lahore, Sharif Medical and Dental College, the Sharif Institute of Applied Health Sciences, a full fledged hospital in the ‘Medical City’ and associated satellite consultant clinics.
Assets

All elected representatives have to file a statement of assets and liabilities of their self, spouse(s) and dependents with the ECP by the 30th of September each year, as per Section 42-A of the Representation of People’s Act 1976.
A glossary of the terms used:
N/A= Not available in the public domain due to various reporting differences (ECP forms, FBR forms, Wealth Statement forms at time of candidature for elections vs filing as current MNA/MPA).
If in light orange and italics like this: This means that the total is missing values from some elements. Say value for X from A and B was available, but not from C. Sum is from A and B then only. Real number must be including C, and hence higher than this. If in red, it means it is the last year’s figures.
Assets declared = What constitutes as ‘Net Assets’ in declarations to the ECP. Looking at the forms filed by various people (I can’t find legal clarity on it), immovable property inherited or gifted is mentioned, but valuations is listed as zero and hence contributes no additional value to the net assets. Hence, if I inherited 300 different plots of land, their present value is not added to my net assets. The actual net worth (even if immovable and illiquid) will obviously be higher, but ‘net assets’ are lower. Here is Imran Khan e.g.

Federal IT = Federal Income Tax paid. This is non-agricultural income. As per Article 260 (1) of the Constitution of Pakistan, the Fourth Schedule of the Constitution (Federal Legislative List), Part I, Section 47 and Income Tax Ordinance Section 41, all agricultural income, even rent derived, is exempt from federal income taxes and is taxed provincially, if so.
Agri income = Income declared to the FBR that fell under the net of agricultural income, and taxable only at the provincial level.
Prov Agri IT = Provincially imposed agricultural income tax paid.  The agricultural income and tax payments come from Form ‘A’ of the return filed under the Punjab Agricultural Income Tax Act, 1997 and the relevant payment challan, attested copies of both.
Mian Nawaz Sharif:

Assets filed at the end of September 2013 showed a sharp rise from the last year, to Rs  1.82 Billion and was commented upon in the media widely and Imran has cited this many times in his speeches too. A closer look at the asset details show what changed. During 2012-13 and the three years prior to that, there is agricultural land of 312 Kanal and 14 Marlas in Mouza Sultankay, Lahore that is listed as ‘gifted by mother’. The value listed for this is Rs 0, since it was gifted (see ‘Assets’ for an explanation). There are three other properties, with a total of 450+ acres that are similarly inherited/gifted. This is not unusual, obviously. Of the 14 properties that Imran Khan has listed in his assets, 10 are inherited and 1 (the Bani Gala house) is gifted (from the wife). When assets were filed for the first parliamentary year deadline, the Sultankay land was now listed as present property value of Rs 992 million, with cost of asset listed at Rs 74.5 million. I’m not sure if this is because the land was developed or zoning/category changed and hence listed as a valued asset. The other three inherited/gifted lands don’t have a stated asset value, as previously. If reporters had used publicly available documents more properly, it would’ve been clear what was the reason for the billion rupee rise in officially declared assets. It was land previously officially declared in assets, continuously, but listed value changed from nil to present value. There would have been no confusion related to/no basis of asking how assets increased by a billion had attention been paid by those asking the questions, or had the Sharif family clarified a simple accounting issue.

Note: Each form shows self, spouse(s) and dependents. They have their own sheet and a sheet that combines their household figures
There is a Rs 1.125 million donation paid to the Sharif Trust from Kulsoom Nawaz in 2012, and perhaps annually. During FY2013, there is also a combined cash transfer & bank remittance from Hussain Nawaz of Rs 197 million, 190 in USD, 5 in EUR and 1.9 in PKR. During FY2011, he gifted Rs 31.7 million to Maryam and Rs 19.459 million to Hussain. these are the Qarz-e-Hasana non-taxable loans, from what I understand.

No comments:

Post a Comment

Thank you for visiting

HD Photos Designed by Templateism.com Copyright © 2014

Theme images by Bim. Powered by Blogger.