The Government of Pakistan is not selling a 100% stake in state-owned companies

Claim: Startup Pakistan shared a post claiming that the Pakistani government is selling a 100%  stake in several state-owned companies, namely Pakistan International Airlines, Pakistan State Oil, Sui Southern Gas Company, Sui Northern Gas Pipelines, Oil & Gas Development Company,  and Pakistan Petroleum. An article linked in the post further states that the government repealed “6 relevant laws” to allow the companies to be sold.

Fact: The claims are misleading. The Government of Pakistan is not selling a 100% of its stake in the companies, and it has not repealed legislation in order to sell the companies. The claims by Startup Pakistan were made in light of Finance Minister Miftah Ismail’s speech where he discussed the government’s future fiscal plans. The federal cabinet recently approved an ordinance proposed by the Cabinet Committee on Privatization (CCoP) to allow Inter-Governmental Commercial Transactions to sell stakes of state-owned companies to foreign countries. The proposed ordinance exempts those transactions from regulatory compliance with six laws and is yet to be approved by President Arif Alvi. Ismail’s speech has been misinterpreted. 

Fact or fiction?

On 27 July 2022, Startup Pakistan posted an image with the caption “Govt puts 100% stakes of PIA, PSO, OGDC, SSGC, SNGPL, PPL on sale” on its social media pages, linking to this article. The article explains that this action was taken in order to prevent the country from defaulting on its loans and that six laws were repealed pertaining to private and public ownership to allow the state-owned companies to be put on sale, and finally that the current situation in Pakistan is “not so good as friendly countries are also not helping Pakistan financially.” The claims were also picked up by other Facebook pages such as Inflics and Economy.pk. 

The claims were made in the wake of Finance Minister Miftah Ismail making a speech explaining Pakistan’s current financial situation and fiscal plans for the future on the same day.  In the speech, Ismail explained that there is a US$4 billion financing gap for which the government needs to raise funds. In order to do so, there have been talks with a friendly country about buying shares in Pakistani state-owned companies that are already traded on the stock exchange. Ismail clarified that formal negotiations have not yet started and since the law as it stands does not allow government-to-government sales of shares, the law needs to be amended. 

Ismail emphasized that  “majority, ownership or management” stakes in these companies will not be sold. Finally, he explained that the shares will be sold on a buyback basis, with clauses added to any future agreements to ensure that the shares can be bought back by Pakistan. 

Ismail’s speech was in the wake of the federal cabinet approving the Inter-Governmental Commercial Transactions Ordinance 2022 on 21 July 2022. The ordinance provides for a mechanism to carry out commercial transactions on a government-to-government level and the formation of a cabinet committee to oversee such transactions, with sweeping powers that can override six pieces of legislation. However, the ordinance is yet to be approved by President Arif Alvi. 

Following approval for the ordinance from the federal cabinet, Former Premiere Imran Khan tweeted, “How can Imported govt brought to power through US conspiracy, led by Crime Minister, who’s family along with Zardari have volumes written on their corruption, be trusted with sale of national assets & that too thru bypassing all procedural & legal checks.” 

The announcement of the federal cabinet decision elicited multiple responses spreading misleading information. Inside Pakistan wrote, “‘Sell everything’’, Federal Cabinet approves ordinance to auction all state assets”. The post was shared here, here, here and here.

Selling shares of state-owned companies to foreign countries has been discussed as a possible option since June, and was specifically discussed in the Cabinet Committee on Privatization meeting held on 24 June 2022. A previous post about this topic was shared on Startup Pakistan’s page on 17 July 2022, albeit without the misleading claims. On 29 July, a similar misleading claim was shared on Startup Pakistan stating “Govt. to sell profitable Pakistani company OGDCL to Foreigners” reiterating claims from its earlier post in the caption.

Soch Fact Check has previously found claims by Startup Pakistan to be false and misleading. The relevant fact checks can be read here and here. 

Virality

Soch Fact Check conducted a CrowdTangle analysis for the 7-day period from 24 July to 30 July using the following search term:

• Govt puts 100% stakes on sale
• Govt to sell profitable Pakistani company to foreigners

The first search term turned up 11252 interactions across 48 posts. It was shared here, here, here, here and here. Many captions and comments blamed the government for “selling the country”. Some captions found in the post include:

• ملک بیچنا شروع ہو گئے ہیں
  [They have started selling the country]
• Pakistan is on loot

The post by Startup Pakistan gained 3,300 likes, 1,100 comments and 4,500 shares. It was also shared on Startup Pakistan’s Instagram and Twitter pages. We also found the post shared on Twitter here, here, here and here. The second search term turned up 3458 interactions across 4 posts with Startup Pakistan’s image. It was shared here, here and here. 

Conclusion: The Government of Pakistan is not selling a 100% of its stake in the companies, and it has not repealed legislation in order to sell the companies. While the federal cabinet recently approved an ordinance to sell shares in the companies directly to a foreign government and to exempt those transactions from regulatory compliance with six laws, the ordinance has not yet been formally approved. Finance Minister Miftah Ismail has clarified that a majority stake will not be sold, and any shares sold will be subject to a buyback clause. The claims by Startup Pakistan are misleading.