Over 200 million stocks have just traded once more not via trading on the stock exchange, but via a legal decision that undid a stock scam conceived 17 years earlier.
Share ownership of the Government of Pakistan in PPL has seen a marked increase in light of the significant transfer of shares by order of the court. The Government of Pakistan has reacquired the total share holding of 200,057,318 ordinary shares in PPL from the PPL Employees Empowerment Trust.
This is no ordinary business deal. The change in the government’s ownership stake in PPL has been made possible by a legal procedure that has taken many years to complete.
The Background of the Case in Court Decisions
The above-mentioned transfer has been directly connected to decisions made by the Supreme Court in many cases, such as C.A No. 421-423 of 2018, C.A No. 19-K of 2019, and CP No. 852 of 2018. The court decided to implement the decision in those issues, establishing a legal background for the share transfer.
The Extent of Increased State Ownership
The figures speak for themselves. After the deal, the share ownership of the Government of Pakistan in PPL increased from 67.51 percent to 74.86 percent – an increase of over 7 percent points in one single stroke. For a firm the size of PPL, such an increase means a significant consolidation of state ownership in one of the largest E&P assets of Pakistan.
Introduction: BESOS in 2009
In order to comprehend why there was such a change in the government’s ownership share in PPL, it is important to first travel back to August 14, 2009 when the Government introduced the Benazir Employees Stock Option Scheme, or BESOS, for its employees.
Eligible workers at selected state-owned and semistate organizations could receive benefits linked to company shares for a five-year vesting period to qualify for such perks an arrangement aimed at encouraging longevity and ensuring that the employee interests coincide with organizational success.
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Constitutional Challenge That Turned It All Around
BESOS continued to run like a well-oiled machine for over a decade before it met with a hurdle that would alter its course forever. On October 22, 2020, the Supreme Court of Pakistan made an adverse judgment on the BESOS Scheme, declaring the entire program unconstitutional under Article 154 of the Constitution.
Supreme Court’s Ruling and Its Implementation
The government has implemented this ruling by taking back the shares from the scheme, particularly those pertaining to PPL.
Changes in Government shareholding PPL constitute the literal execution of the court ruling in 2020 – after more than a few years since then. It demonstrates how complicated it is to unwind an ongoing scheme such as this one.
The Government shareholding PPL by 74.86% is an indication of the bigger constitutional review that BESOS has undergone since 2020. With PPL, this has meant increased state ownership and the official end of the employee shares scheme that started in 2009.
Other State corporations that took part in the BESOS program might be facing similar set backs if they have not yet finished, as the decision is wide-ranging and not specific to a single corporation.
Nayab Fatima is a university graduate and an emerging media professional with a strong passion for journalism, research, and independent reporting. She specializes in developing well-researched, fact-based, and analytical news stories covering a wide range of sectors, with particular expertise in technology, telecommunications, aviation, and the automobile industry.
