Liquidators later sold IGCF GP to a company linked to Pakistani businessman Shaheryar Chishty.
- The plaintiff maintains that IGCF GP had obtained a loan from Chishty's company.
- Chishty is alleged to be running IGCF for his own benefit.
- Asiapak has obtained security over all remaining assets of IGCF.
LONDON: The Grand Court of the Cayman Islands has confirmed the enforcement of the London Court of International Arbitration (LCIA) award requiring the disclosure of records relating to a former Abraaj Group investment fund holding a $1.6 billion stake. at a power company in Karachi.
The Grand Court of the Cayman Islands rejected an application by GP IGCF (The General Partner of Infrastructure Growth & Capital Fund) to set aside an order enforcing the award. IGCF's main remaining asset is a substantial stake in K-Electric, a vertically integrated utility company in Karachi.
IGCF is a $2 billion investment fund whose largest asset is a $1.6 billion stake in K-Electric, a power company serving 3.4 million consumers in and around Karachi.
The fund is managed by IGCF GP, which was previously owned by Abraaj before the Dubai private equity group collapsed in 2018. Liquidators later sold IGCF GP to a company linked to the Pakistani businessman, a former Citi banker and owner of the Daewoo bus services, Shaheryar Chishty.
White Crystals, a special purpose vehicle created by Saudi Arabia's Al Jomaih Group to invest in IGCF, filed the arbitration against the general partner under an LCIA clause in IGCF's limited partnership deed. He said the claim was motivated by serious concerns that Chishty was managing IGCF for his own benefit and not that of the limited partners.
The plaintiff argued that IGCF GP had entered into a loan agreement with one of Chishty's companies, Asiapak Investments, at an alarming interest rate of up to 60% per annum compounded monthly and that Asiapak had obtained security over all of IGCF's remaining assets. . He also maintained that around $66 million belonging to the fund had been “moved from bank to bank” in Pakistan and had ended up in a bank account in the name of one of Chishty's companies.
It was alleged in court that Chishty was exercising his control to prevent the board of directors of KES Power from deciding to appoint lawyers to defend the English litigation, and that the businessman had directed another IGCF entity in the Cayman court for the liquidation of KES Power based on the “artificial deadlock” between its board of directors.
Without deciding the truth of the allegations, the LCIA tribunal was satisfied that White Crystals' concerns on these matters were genuinely sustained and ordered that the books and records be handed over within five days of adjudication. He rejected IGCF GP's defense that White Crystals was being used as a “cipher” to obtain information that would be used by third parties in separate litigation.
After the general partner initially refused to comply with the award, White Crystals obtained an ex parte order for the enforcement of the award from the Grand Court of the Cayman Islands on January 5.
Originally published in The News
