JS Group says Ali Siddiqui received $4.3m bonus for PICT heroics

Jahangir Siddiqui & Company Limited (JSCL) on Thursday conceded that one of its eight-member Board of Directors had received over Rs 430 million ($4.3 million) as an advisory fee.
The amount paid to Ali Jahangir Siddiqui, son of Jahangir Siddiqui- founder of the country’s leading business conglomerate, JS Group- is reported to be the highest bonus a non-executive company director has ever received in Pakistan.
“He should be a hero to you for bringing foreign exchange of $ 37 million in Pakistan,” Imran Shaikh, a spokesman of JS Group, told a group of journalists at the group’s head office.
Giving a “correct order of facts,” the spokesman said the bonus paid to the director was in conformity with international corporate standards.
“Yes, Ali has received the quoted advisory fee. This, however, needs to be seen in the complete context,” emphasised Imran, adding the non-executive director had earned the company a remarkable capital gain of Rs 2.4 billion in its $37 million deal with foreign buyers, Pakistan International Container Terminal (PICT).
The JS had sold out 23 million of its voting shares in the PICT to the Manila-based M/s ICTSI Mauritius in March 2012 at Rs 150 per share.
Imran said Ali was able to fetch Rs 3.63 billion for the company in the PICT deal which had been estimated at Rs 1.18 billion. The company also had got a “specialised dividend” of Rs 494.5 million out of the PICT sell-off, he added.
“He (Ali) earned for the company a net capital gain of Rs 2.95 billion,” the spokesman said.
Ali was therefore granted a bonus equivalent to 14 percent of the total PICT investment by JSCL’s Board, Imran said.
The bonus, he said, was in accordance with international corporate standards. “Internationally, people get these kinds of bonuses,” Imran claimed. However, when asked, he said he had “no idea” if a non-executive member of a company had ever received such a huge bonus in Pakistan.
Asked if the company’s board could reverse its decision about the conferment of the bonus to Ali, Imran replied, “Why would we reverse it. He has earned such a handsome amount for our company.”
The Securities and Exchange Commission of Pakistan (SECP) is reported to have asked the JSCL, on April 1, to substantiate the advisory services rendered by the concerned director.
The JSCL spokesman, however, said it was not the first time the apex regulator had asked the company for an explanation about its financial accounts. “Suleman Lalani (CEO of JSCL) has responded to the (SECP) letter, but we cannot comment on it,” said Imran.
He said the SECP letter was a matter of routine as his company had also received one such letter in 2010 from the commission, asking about the grant of an advisory fee. Imran could not recall the amount then paid against the head in question. “SECP has the right to ask any company for an explanation on its accounts,” the spokesman added.
Earlier, Imran gave a briefing, in chronological order, on his company’s legal battle with a rival business group led by Shunaid Qureshi and Haji Abdul Ghani who, he claimed, had launched a “defamation” campaign against his side.
“Since this matter is sub judice in the High Court, we are not giving you an opinion or comment,” said Imran. He, however, read out some extracts from the lawsuit which, he said, were self-explanatory to prove financial anomalies which Shunaid and Ghani had committed in Al Abbas Sugar Mills case.
The crux of his statement was that ever since Ali and Lalani had mobilised, the SECP on March 8 and the Singh High Court on March 12, against Shunaid and Ghani, the latter were all out to bring his company in disrepute in one way or another.