However, a fact finding committee has also been constituted to probe how the company managed to get all permissions on "forged "documents. Giving the background, the sources said, PPIB issued Letter of Interest (LoI) on February 11, 2008 to M/s Telecom Valley (Private) Limited (TVL) - the Lead Applicant for and on behalf of the consortium comprising of Assmandal Trading Company LLC (ATC) as the Main Sponsor, TVL as Lead Applicant and Central China Power Group International Economic & Trade Co. Limited (CCPG) as a technical partner as the sponsors) - constituted pursuant to consortium agreement on August 26, 2006 executed by and between the sponsors to conduct the feasibility study of approximately 548 MW Kaigah Hydropower Project a run of the river project located on Kandiah River, a tributary of Indus River in District Kohistan, Khyber Pakhtunkhwa (the project) under and pursuant to the policy for Power Generation Projects 2002at no risk and cost to, and without any obligation on the part of the GoP and its agencies.
The LoI was issued based on sponsors unequivocal representations and warranties under the Statement of Qualifications (SoQs) on August 26, 2006 submitted pursuant to Pre Qualification Document (PQD) that the sponsors are financially, technically and legally capable to undertake the feasibility study of the project as per international standards and upon its approval by Panel of Experts (PoE) and after fulfillment of other legal and policy requirements they shall apply to PPIB for issuance of Letter of Support (LoS) entitling them to further design, finance, construct, complete, commission, own, operate, maintain, and at the end of term transfer the project, in each case, in accordance with Implementation Agreement (IA) and Power Purchase Agreement (PPA) to be entered into between the project company so constituted by the sponsors and the GoP entities and all applicable laws of Pakistan.
The Consortium Agreement was an integral part of the SOQ submitted to PPIB in response to an advertisement and PQD issued by PPIB in relation thereto and was not subject to amendment without PPIB''s permission.
Upon completion of the feasibility study and approval by the PoE of PPIB on June 25, 2014, the LoI served its purpose and hence automatically lapsed and sponsors were required to apply to PPIB for issuance of LoS within time period as prescribed and enjoined under para 46 of the policy after having in place feasibility stage tariff from Nepra and fulfillment of other legal requirements.
As per the Policy, duly reflected in the terms of PQD and committed under the SOQs, the pre-qualified sponsors were required to maintain not less than fifty one percent of the equity stake in the project during the lock-in-period i.e. from LOS until sixth anniversary of the commissioning of the project. Within three months after approval of the feasibility study, the sponsors were required to apply for tariff determination to Nepra. Instead, a purported Kandiah Hydropower (Pvt) Limited, with no representation of sponsors as required by the policy and commitment under SOQs, illegally and unlawfully applied for tariff determination and generation licence before Nepra in August 2015 after delay of ten months which application was rejected by Nepra and till date no project company with atleast 51% outstanding ordinary share capital held by the Sponsors has filed any tariff petition.
In March 2016 dispute arose between TVL and one Associated Technologies Limited (ATL) claiming (though sans any legal basis) to be holding 49% stake in the consortium for the project since December 2011 and feeling aggrieved by the alleged actions of TVL, ATL filed a civil suit further claiming to be the only entity entitled to develop the project based on a purported Consortium Interest Transfer Agreement (CITA) on February 1, 2016 executed between ATL and one Assmandal Trading Company Lee and the Lead Applicant and after failure to secure an ad interim injunction preferred an appeal before Lahore High Court and during the appeal ATL and TVL reached a purported compromise in terms thereof the appeal was disposed of.
The sources said, ATL, in its letter on January 15, 2018, purportedly representing (which was not permissible as per policy) on behalf of sponsors requested for substitution of the sponsors with new sponsors which necessitated full due diligence of the sponsors.
The sponsors pursuant to the terms of SOQ letter have unequivocally authorized PPIB and its authorized representatives to conduct any inquiries or investigations to verify the statements, documents, and information submitted in connection with the SOQ, and to seek clarification from sponsors'' bankers and clients regarding any financial and technical aspects. The SOQ letter further serves as authorization to any individual or authorized representative of any institution referred to in the supporting information, to provide such information deemed necessary and requested by PPIB to verify statements and information to provide such information provided in the SOQ or with regard to the resources, experience and competence of the sponsors.
Accordingly, PPIB has had full scrutiny of the record including the judicial record filed by ATL and other documents made available to PPIB which documents and information the SOQs and the policy but also with malafide intent have been actively concealing crucial information and fabricating documents to defraud and hoodwink PPIB for their nefarious designs which acts of malafide, fraud, omissions and commissions are as follows: (i) the main sponsor having been rudimentarily obligated to undertake the project had long taken exit from the project in the year 2008 without informing PPIB which was serious breach of and default under the terms of SOQs. Financial net worth of the main sponsor was the basis on which reject was awarded to the sponsors whose early exit from the project had left the development of the project in the lurch. These facts having material bearing on the project development were actively concealed since 2008 onward. Thus sponsors violated the provisions of and defeated the objective as laid down under the policy by deliberately keeping the concession granting authority in dark of aforesaid crucial information ;(ii) main sponsor while taking exit and actively concealing it from PPIB left the project illegally with TVL, a mere Lead Applicant which was obligated to only sign the documents and communicate with PPIB or other government agencies on behalf of other consortium partners. The TVL did not have any technical and financial net worth or power development experience nor did it commit any equity as per SOQs. Thus the concession granted based on commitments made in SOQs was practically and legally flouted by handing over the project to an entity which was never capable of undertaking it. Hence unwarranted and long delays resulting in precious hydro resource: (iii) the main sponsor''s commercial licence in UAE had already expired which information was deliberately concealed. Later TVL in connivance with ATL in 2014 with intent to defraud PPIB and other GoP departments got incorporated another company with the name and style of Assmandal Trading Co. LLC in CAE. TVL and the said company since its incorporation has been impersonating to PPIB as if it were the main sponsor and has been tendering forged and fabricated documents to PPIB on various occasions and the same company also entered into CITA with ATL;(iii) similarly, CCPG, the technical partner with commitment of atleast 1% equity has also long taken exit which was again deliberately concealed from PPIB;(iv) the original consortium comprising of ATC, TVL and CCPG was long sold out illegally and unlawfully by TVL in 2011 for valuable consideration to ATL without approval of PPIB. Thus practically it was ATL which was unduly and unlawfully handling the project without having been so authorized by PPIB/ GoP.
According to PPIB, ATL''s request for substitution of sponsors was found to be not legally tenable as it had no authority to deal on behalf of sponsors. ATL''s purported authorizations by TVL or ATC or CCPG were not legally permissible since such authorizations were in serious breach of their covenants with PPIB as per SOQ according to which original sponsors were not authorized to abandon the project or assign or novate their right and obligations under the LoI. Furthermore, CITA was executed at the time when main sponsor was no more existing therefore a fraudulent document does not confer any right whatsoever to ATL. Such buying and selling through CITA was otherwise illegal and unlawful.
The sources further stated that the Consortium Agreement on the basis of which LoI was issued to the sponsors was amended without lawful authority, hence the structure built upon such illegal and unlawful CITA has no legal foot to stand and both purported CITA of February 1, 2016 and later a Compromise Agreement(CA) of May 11, 2016 submitted in court by ATL transpire that millions of rupees have been paid and committed to be paid in consideration of illegal buy-out of consortium by ATL.
PPIB has observed that such fraudulent, unlawful and illegal selling and buying of sponsor'' rights and interests in the project has resulted in unjust enrichment of TVL at the cost of serious delays, cost escalation of the project and wastage of precious water resource. Therefore, request by ATL to substitute the original sponsors at this stage is an eye wash since the whole consortium had already been illegally and unlawfully sold out. Thus, the request for substitution by ATL is a clear disregard and abuse of the process of law where its underlying objective seems to earn windfall profits from the illegal investment it had earlier made.
Managing Director PPIB, Shah Jahan Mirza stated that in view of frauds, active concealments, impersonations, tendering of forged and fabricated documents to GoP agencies and instrumentalities and various acts of omissions and commissions, in the interest of justice and fair play the sponsors as well as ATL were provided full opportunity of hearing to present their position. However, except representative of CCPG who confirmed that since signing or CA it has never communicated with other Sponsor in connection with the project and that it was no more interested to participate in the project, none of the sponsors turned up in the scheduled meetings neither any documents as requested were submitted. On the other hand, ATC and TVL conveyed flimsy and evasive responses to further convolute the matter while ATL presented its full case before the PPIB Board with no plausible and justifiable reasons to claim any right in respect of the project and later through letter of October 25, 2018 evasively admitted the incorporation of a new company with the name and style of the main sponsor and also did not tender the requisitioned document.
PPIB has framed following charges on the sponsors : (i) active concealment of facts on the part of the sponsors;(ii) misrepresentation and tendering of fabricated and forged documents to public authorities and the judicial forum;(iii) violation of policy provisions and law;(iv) breach of representations, convents, commitments made by sponsors in the SOQs and from time to time to PPIB;(v) sponsors having miserably failed to provide information/ documents requested by PPIB despite having agreed under the SOQs; and (vi) failure to diligently implement the project under and in accordance with the policy provisions causing inordinate and inexplicable delay of almost four years after approval of feasibility study on the part of the sponsors causing significant cost escalation of the project in addition to adverse economic impact due to non-availability of cheaper energy.
"All titles, rights and interest of the sponsors and any party claiming through or on behalf of them or otherwise including ATL in and to the development of the project, have been terminated with immediate effect," the sources maintained.
