Syed Muhammad Ghaznavi ISLAMABAD, Mar. 10 (INP-WealthPK): The Privatization Commission is working to resolve the issue of government ownership retention regarding Privatization of Pakistan Re-Insurance Co Ltd (PakRe) and will share its updates with the Senate Standing Committee on Privatization. The privatization of PakRe came under discussion at a recent meeting of the Senate’s Standing Committee on Privatization.  PakRe’s ownership is divided amongst various parties, with the Ministry of Commerce owning 51.1% shares, State Life Insurance Corporation (SLIC) owning 24.4%, National Bank of Pakistan (NBP) owning 3.5% and the remaining 21% owned by the general public. PakRe is the only reinsurance company in the country. As much as 75% of the company’s business is generated via reinsurance services provided to other insurers, who are mandated by the government to get reinsurance services from PakRe for 35% of their portfolio. A senior official from the Ministry of Commerce briefed the members of the Senate committee on the status of PakRe. In August of 2019, the Cabinet Committee on Privatization (CCOP) placed PakRe on the list of companies to be privatized. In January 2020, a financial advisory group consisting of Habib Bank Ltd (HBL), Next Capital and Haidermota and Co. was appointed to assist with the transaction. Following this, the transaction structure was approved in August 2020. However, in November 2021, the Privatization Commission Board, on the advice of the financial advisors, determined that the market sentiment for the transaction was negative. The issue of maintaining majority government ownership is at the core of the transaction. The major chunk of the business’s activity is reliant on the mandate imposed on other insurers by the Government of Pakistan. In the case of a transaction that leads to the Government of Pakistan losing majority ownership in the company, the mandate will no longer be applicable. On January 12, a meeting on the privatization of PakRe was held at the Ministry of Commerce. Regarding the issue of maintaining majority ownership, an assurance from SLIC to not sell its stake in the business was discussed. “Since the SLIC is a government-owned institution, the Ministry of Commerce can sell 20% of its equity in the business without compromising majority ownership of the Government of Pakistan since the remaining 31.1% combined with SLIC’s 24.4% would fulfill the clause,” Privatization Commission Secretary Nasir Jamy informed the members of the Senate committee. On January 19, another meeting attended by officials from the Ministry of Commerce, Securities and Exchange Commission of Pakistan (SECP) and Privatization Commission was held. In the meeting, the SECP advised the Privatization Commission to seek legal counsel on whether the equity held by the SLIC is considered to be ownership of the Government of Pakistan. It was also advised to seek opinion as to whether the SECP could strike some sort of agreement with the SLIC to retain ownership since the SLIC is also a separate legal entity apart from its status as a government-owned organization. The Privatization Commission is continuing its efforts to solve the matter and is expected to brief the Senate committee again within two months. “Will two months be enough to find a response to the question of government ownership,” asked the Senator Shamim Afridi. Nasir Jamy responded in the affirmative. Concerned about the employment status of citizens at the organization, Shamim Afridi, inquired, “What is going to happen with the people who are employed at the institution?” Minister for Privatization Mohammadmian Soomro responded, “The employees will continue to be employed as long as the organization is profitable, with those deemed surplus potentially getting laid-off.”