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Research Report

Shareholding Pattern ofCorporate Sector in Pakistan

– An Insight on dominance of Business Groups andFamilies over Corporate ownership structure

Research Department Institute of Cost and Management Accountants of Pakistan (ICMAP)

© ALL RIGHTS RESERVEDNo part of this publication covered by the Copyright may be reproduced, stored in a retrievalsystem or transmitted in any form or by any means—electronic, mechanical, photocopying,recording or otherwise—without prior written permission of the Research Department,Institute of Cost and Management Accountants of Pakistan, Karachi.

© Institute of Cost and Management Accountants of Pakistan, 2011

Published by:Research Department, ICMAP.Institute of Cost and Management Accountants of Pakistan E-mail: [email protected]: http://www.icmap.com.pkFax: +92-21-99243342

Published in 2011

DisclaimerThis document has been prepared as an analytical report and is notintended to be exhaustive. While the utmost care has been taken in thepreparation of this publication, it should not be relied upon as a substitutefor legal advice or as a basis for formulating business decisions.

Brief ContentsPage

Foreword 5

From the Desk of Executive Director 6

Chapter 1 Executive Summary 7

Chapter 2 Introduction 11

Chapter 3 Relevant Laws on Company Shareholdings 13

Chapter 4 An Overview of Business Groups and Families 16

Chapter 5 Sector-wise Analysis and Findings 20

Chapter 6 Ownership Category-wise Analysis and Findings 22

Chapter 7 Company-wise Analysis and Findings 25

Annexure (Tables) 43

ContentsChapter 1 Executive Summary 7

o Business Groups and Family owned companies dominate ownership structure o Ownership structure in ‘Textile Sector’ is skewed towards ‘Promoters & Directors’o ‘Associated Companies’ owns above 50% share in Refining and Automobile Sectorso General Public’ holds major shareholdings in Insurance, Sugar and cement Sectorso ‘Institutional Investors’ have major stakes in Fertilizer and Pharmaceutical sectorso ‘Pak-Arab Fertilizer’ leads with highest shareholding ownership per Shareholder

Chapter 2 Introduction 112.1 Concentrated and Dispersed Ownership structures2.2 Categories of Shareholders and Distribution of Share capital2.3 Purpose and Objectives of the Study2.4 Research Design and Data Source2.5 Sample Selection

Chapter 3 Relevant Laws on Company Shareholdings 133.1 Requirement for Listed companies to disclose shareholding pattern3.2 Requirement for company to maintain a Register of Directors’ shareholdings 3.3 Requirement for Directors to make disclosures of shareholdings 3.4 Requirement for Directors to submit statements of beneficial ownership3.5 Requirement for circulating shareholding information with Directors Report

Chapter 4 An Overview of Business Groups and Families 164.1 Historical Perspective 4.2 Sector-wise Analysis of Sample Companies

Chapter 5 Sector-wise Analysis and Findings 20Sugar, Textiles, Refinery, Fertilizer, Pharmaceutical, cement, Automobile Banks and Insurance sectors

Chapter 6 Ownership Category-wise Analysis and Findings 22o Directors’ ownership category o General Public ownership categoryo Associated companies ownership categoryo Institutional ownership category

Chapter 7 Company-wise Analysis and Findings 25Sugar, Textiles, Refinery, Fertilizer, Pharmaceutical, cement, Automobile, Banks and Insurance sectors

Annexure (Tables) 43

Foreword

I am pleased to present this report titled ‘ShareholdingPattern of the Corporate Sector in Pakistan’, carried out bythe Research Department, as part of the project assigned bythe Research, Quality Assurance & Ethics Committee of theInstitute. In fact, it was thought by the Committee to conducta brief overview of the shareholding pattern of the listedcompanies in Pakistan, with a view to provide a usefulreference to our members, holding key positions in theindustry, as well as our students, who are to step into thecorporate world after completion of their studies. Thisanalytical report, though not very exhaustive, wouldcertainly provide them valuable insight on the ownershipstructure and style of the listed corporate sector in Pakistan.

A sample group of 44 representative companies; five eachfrom six manufacturing sectors (sugar, textiles, refinery,fertilizer, pharmaceuticals, cement and automobile) and twoservices sectors (banks and insurance companies) have beenselected for this study (due to small base of refinery sector,only four companies have been included). The studysummarizes the companies’ shareholders into five categories viz. Directors, General Public, Associated companies,Institutional investors and foreign ownership. I am quiteconfident that this report would be a useful addition to yourstudy material.

I am indebted to the members of the Research, QualityAssurance & Ethics Committee for their valuable supportand input, which led to completion of this report. I mustappreciate here the excellent efforts of Mr. MushtaqMadraswala, Executive Director and the hard work put in byMr. Shahid Anwar, Deputy Director Research, in compilingand analyzing the data, included in this report.

Shareholding Pattern of Corporate Sector in Pakistan 5

Masud Muzaffar, FCMA - ChairmanResearch, Quality Assurance &

Ethics Committee

From the Desk ofExecutive Director

It has always been the utmost desire of our Institute to presenthelpful professional advice and guidance for the benefit of itsmembers, both in practice and in employment. This guidanceis also in shape of research-based reports and studies,pertaining to the industry and corporate sector, in addition toinformation on the core area of cost audit and managementaccounting. The intention is to keep our members abreast with various industry issues and matters, so as to help themunderstand industry demands and opportunities in order toplay an effective role as ‘strategic leaders’.

The Research Department, which conducts such studiesfrom time to time, has come out with yet another well-researched report on the “Shareholding pattern ofCorporate Sector in Pakistan”, aimed at providing aninsight to our members on the corporate ownership patternin different sectors.

I hope that the readers will find this report quite interestingand beneficial.

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Mushtaq A. Madraswala Executive Director

Executive SummaryThis study examines the shareholding pattern and/or the ownership structure of the corporatesector in Pakistan, by using sample of forty-four representative firms from the manufacturingand services sectors. The manufacturing segment covers seven different sectors namely; sugar,textile, refinery, fertilizer, pharmaceuticals, cement and automobiles, whereas the servicessector includes banks and insurance companies. Five companies each from the above ninesectors have been selected, with the exception of refinery sector, where only four companies areincluded, due mainly to the extremely narrow base of this industry sector. The data onshareholding pattern has been taken from the annual reports of these companies for thefinancial year 2010. The ownership structure has been classified into the following five majorheads for the purpose of this study, and the data have been gathered and compiled accordingly:

(1) Directors ownership (2) General Public ownership(3) Associated companies ownership(4) Institutional ownership(5) Foreign ownership

The directors’ ownership includes the shareholdings in the company by the promoters as well as the directors’ spouses and minor children. The Associated companies are mostly the sisterconcerns or subsidiary companies of the groups, holding stakes in the selected companies. TheInstitutional ownership signifies investments made by banks, DFIs, mutual funds, investmentcompanies, financial institutions, insurance companies, non-financial entities such as trusts etc.The foreign ownership refers to shares held by the foreigners and overseas Pakistanis.

Business Groups and Family owned companies dominate ownership structure

ICMAP research establishes the recognized fact that ownership structure in selected companiesis mostly concentrated and closely held by business groups and family-run businesses. It is quite evident that in majority cases, the promoters or directors, through the ‘associated companies’indirectly own the company shares. The family owned companies has, therefore, controllingequity interests, leading to insider control and concentrated ownership in such companies.

It is a fact that being part of a large group of companies, a business firm is in a good position toreap several benefits from the group association. For instance, it can benefit from the goodwilland reputation of the group, as well as share the resources in finance and technology. Thus, alarge stake of associated companies may have a positive impact on the company’s performance.However, this also leads to concentration of ownership within the company.

ICMAP study reveals that business groups and families, including trusts and foundations, arecontrolling the major shareholdings of companies in the manufacturing as well as the servicessectors, selected for this study. The pharmaceuticals and automobile sectors are, however, theexceptions, as in these sectors the foreign parent companies have the major stakes.


ICMAP study concludes that around 64 percent (32 companies) of the 44 selected samplecompanies are controlled by the prominent business groups and families of Pakistan. Thesegroups of companies include Nishat group, Hasham group, Ghulam Faruque group, AminBawany group, Gul Ahmed group, Crescent group, Sapphire group, Din group, Adam group,Dawood group, Younus Brothers group, Dewan group, Rupali group, Dawood Habib group,Ibrahim group, Hashoo group, Attock group, Fatima group, Engro group, Byco group, EFUgroup etc.

A detailed analysis of these corporate groups and families is made in Chapter 4 of this Report.

Ownership structure in ‘Textile Sector’ is skewed towards ‘Promoters & Directors’

ICMAP study reveals that the ownership structure in the ‘textile sector’ is highly skewedtowards the ‘promoters’ and directors’ of the companies. The directors in five sample textilecompanies hold around 42 percent share, which is comparatively higher than directors’ownership in other sectors under study. As an average, the directors’ holds almost 14% share inthe textile sector.

Average ownership share of‘Promoters & Directors’

Sector Share (%)

Textile 42%

Sugar 31%

Fertilizer 15%

Banking 13%

Cement 07%

Automobile 07%

Insurance 06%

Pharmaceuticals 05%

Refinery 0%

‘Associated Companies’ owns above 50% share in Refining and Automobile Sectors

ICMAP study concludes that ‘Associated companies’ have major stake of around 33 percent(average) in the shareholdings of selected sample companies in the manufacturing and servicessectors. The following table shows that the associated companies hold more than 50% share, as anaverage, in the total share capital of selected companies in the ‘Refining’, Pharmaceuticals and‘Automobile’ sectors. In the ‘Sugar sector’ there is no shareholding of the associated companies.

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Average ownership share of‘Associated Companies’

Sector Share (%)Refinery 59%Automobile 51%Pharmaceuticals 50%Banking 39%Fertilizer 34%Insurance 29%Cement 26%Textile 7%Sugar 0%

‘General Public’ holds major shareholdings in Insurance, Sugar and cement Sectors

ICMAP study has indicated that the ‘General Public’’ holds a major portion of the shareholdingin the Insurance, sugar and cement sectors. The insurance sector is on top with 48% share. As anaverage, the general public holds around 26% share in the nine sectors selected for this study.

Average ownership share of‘General Public’

Sector Share (%)Insurance 48%Sugar 42%Cement 38%Textile 31%Banking 19%Refinery 16%Automobile 14%Pharmaceutical 12%Fertilizer 10%

‘Institutional Investors’ have major stakes in Fertilizer and Pharmaceutical sectors It is evident from our study that the institutional investors (i.e. banks, DFIS, insurancecompanies, financial institutions, modarabas, mutual funds, trusts etc) have major stakes in


Fertilizer (36%) and Pharmaceutical (32%) sectors. The study further points out thatinstitutional investors have only 9 percent share in the total share capital of five selectedcompanies in the automobile sector.

Average ownership share of‘Institutional Investors’

Sector Share (%)Fertilizer 36%Pharmaceuticals 32%Sugar 25%Cement 22%Banking 22%Refinery 17%Textile 16%Insurance 14%Automobile 09%

As an average, the institutional investors hold around 21 percent share in the shareholdings ofthe selected representatives companies in both the manufacturing and services sector.

‘Pak-Arab Fertilizer’ leads with highest shareholding ownership per Shareholder

ICMAP study examined the average number of shares held by the shareholders in each sector ofindustry. The following Chart gives a picture of highest and lowest average share per shareholder:

Manufacturing SectorS.# Sectors Lowest Average Share Highest Average Share

1 Sugar 4,193 (Mirpurkhas Sugar Mill) 37,947 (JDW Sugar Mill)2 Textile 9,077 (Premium Textile) 38,327 (Sapphire Textile)3 Cement 35,833 (D.G Khan Cement) 137,522 (Lafarge Cement)4 Refinery 9,058 (Pakistan Refinery) 26,477 (Byco Refinery)5 Fertilizer 21,312 (Engro Chemicals) 18,750,000 (Pak Arab Fertilizer)6 Pharmaceutical 2,084 (Wyeth) 35,394 (GSK)7 Automobiles 12,351 (Hino Pak) 21,106 (Indus Motors)

Services Sector8 Banks 18,269 (MCB) 97,857 (Bank Al Habib)9 Insurance 20,020 (Adamjee Insurance) 55,979 (NJI)

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Chapter 2: Introduction

A number of researches conducted in the past on the ownership structure of companies, pointout that in the developing economies, the ownership is heavily concentrated. It is concluded that in Asian countries, particularly India; families and groups mostly control the corporatebusinesses. Pakistan’s case is not too different. This Report aims to establish this very fact.

What we conclude from this brief research on shareholding pattern, is that a larger part of thePakistan’s corporate shareholding structure resembles a concentrated family ownershipstructure, in which the majority shareholders not only retain control of a company but are alsoengaged in managing it. This conclusion also substantiates recent research on the corporategovernance, suggesting that a ‘large proportion of public companies worldwide arecharacterized by family-controlled stockholders, usually the founder(s) or their descendants’.

2.1 Concentrated and Dispersed Ownership StructuresCorporate ownership structures are generally of two types viz. concentrated and dispersed.

In concentrated ownership structures, ownership and/or control is concentrated in the handsof a small number of individuals, families, managers, directors, holding companies, banksand/or other non-financial corporations. These individuals or groups are also called “insiders”as they often manage, control or strongly influence the operation of a company. Accordingly,concentrated ownership structures are referred to as ‘insider systems’. Most countries,especially those governed by civil law, have concentrated ownership structures.

The ‘insiders’ exercise control over companies in many ways. For instance, in a scenario whereinsiders own the majority of the company shares and voting rights. If a few owners own shareswith significant voting rights, they can effectively control a company even though they did notprovide the majority of the capital.

In a dispersed ownership structure, a large number of owners each hold a small number ofcompany shares. Small shareholders have little incentive to closely monitor company activitiesand tend not to be involved in management decisions or policies. Hence, they are called‘outsiders’, and dispersed ownership structures are referred to as ‘outsider systems’. Commonlaw countries such as the UK and US tend to have dispersed ownership structures.

2.2 Categories of Shareholders and Distribution of Share capital The share capital structure of a company has different dimensions. The share capital of acompany is distributed into various categories of holders such as promoters and directors,general public, institutional investors (such as banks, insurance companies, DFIs, mutual fundcompanies etc), associated companies and foreign investors. A study of this distribution amongthe various categories of holders is termed as ‘shareholding pattern’.

The shareholding pattern of a company, in fact, provides an insight to the corporate controlmechanism practiced in that company and determines its corporate ideology and culture. Assuch, shareholding pattern differs from company to company and industry to industry.


2.3 Purpose and Objectives of the Study

The main objectives of this study are to investigate and establish the following facts:

(a) To examine the shareholding pattern of selected Pakistani companies (b) To ascertain the ownership structure in selected industry / services sectors(c) To determine the extent of ownership concentration among the shareholders(d) To evaluate the dominance of business groups and families on corporate sector

2.4 Research Design and Data Source

This study was basically an analytical research, carried out on the basis of shareholdinginformation, provided in the annual reports of selected Listed companies in each industry. Thecompanies provide the relevant shareholding information in compliance with the legalrequirement under the Code of Corporate Governance, 2002. The information include:

(a) Pattern of Shareholding, showing the number of shareholders with their correspondingshareholdings and number of shares held by them.

(b) The categories of shareholders, indicating the number of shareholders in each categoryand the number of shares held, and the percentage of their share in total share capital.

For the purpose of this study, the soft copies of annual reports of the 44 selected samplecompanies were downloaded from their respective official websites. Since all companies werelisted on the Stock Exchanges, as such under the law, they are required to place their annualreports on websites; hence no difficulty in data availability.

2.5 Sample Selection

For this study, we have selected five companies each from seven manufacturing sectors and twoservices sectors. The manufacturing sector comprises textiles, sugar, cement, fertilizer, refining,automobiles and pharmaceuticals, whereas the services sector includes banks and insurance. Inthe refining industry only four companies are selected, due to its narrow base. The sectors andcompanies selected as sample group for this study are identified below:

Sectors Names of CompaniesTextiles Gul Ahmed, Sapphire, Crescent, Din and PremiumSugar Pangrio, Mehran, Mirpurkhas, Faran and JDWCement Lafarge, Attock, Lucky, D.G. Khan and FaujiFertilizer Engro, Fauji, Fatima, Pak-Arab and Dawood HerculesRefinery Pakistan Refinery, National Refinery, Attock and BycoAutomobiles Hino Pak, Dewan, Pak Suzuki, Gandhara and Indus MotorPharmaceuticals GSK, Abbott, Ferozesons, Sanofi Aventis and WyethBanks Soneri, Bank Al-Habib, MCB, Askari and Allied Insurance Adamjee, NJI, EFU, United and Premier

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Chapter 3: Relevant Laws onCompany Shareholdings

There are two significant legal documents, containing laws and regulations on the shareholdingpattern and ownership structures of companies. These laws are Code of Corporate Governance,2002 and the Companies Ordinance, 1984. The relevant extracts taken from both these legaldocuments are provided below for ready reference:

Code of Corporate Governance, 20023.1 Requirement for Listed Companies to disclose shareholding pattern

The Pakistani Code of Corporate Governance, promulgated in 2002, has made it mandatoryupon all listed companies to disclose (in the Annual Report) whole shareholding patternincluding shares held by financial institutions (both government and privately owned),associated companies and directors and management of the company and their spouse and their minor children. Details of beneficial ownership i.e. shareholders holding ten percent or moreinterest in the listed company are also required to be disclosed under the Code.

The Clause (xix) of Code of Corporate Governance, 2002 relates to “The Directors’ Report toShareholders”. Sub-clause (i) of Clause (xix) of the said Code is reproduced below:

Quote:(xix) (i) The pattern of shareholding shall be reported to disclose the aggregate number of shares(along with name wise details where stated below) held by:

Associated companies, undertakings and related parties (name-wise details);NIT and ICP (name wise details);Directors, CEO and their spouse and minor children (name-wise details);Executives;Public sector companies and corporations;Banks, Development Finance Institutions, Non-Banking Finance Institutions, Insurancecompanies, modarabas and mutual funds; andShareholders holding ten percent or more voting interest in the listed company (name-wisedetails).

Explanation: For the purpose of this clause, clause (b) of direction (i) and direction (xxiii), theexpression “executive” means an employee of a listed company other than the CEO anddirectors whose basic salary exceeds five hundred thousand rupees in a financial year.

(j) All trades in the shares of the listed company, carried out by its directors, CEO, CFO,Company Secretary and their spouses and minor children shall also be disclosed.

Unquote


Companies Ordinance, 19843.2 Requirement for Company to maintain a Register of Directors’ Shareholdings

Section 220 (1) of the Companies Ordinance, 1984 prescribes for keeping a Register at theregistered head office of the company, wherein the 10 percent or above shareholdings by thedirectors, chief executive and other individuals are to be recorded. This Register is to bemaintained for inspection by the shareholders of the company.

The complete text of Section 220 (1) of the Ordinance is reproduced as under:

Quote:220. Register of directors’ shareholdings, etc. - (1) Every listed company shall keep a registershowing as respects each director, chief executive, managing agent, chief accountant, secretaryor auditor of the company, and every other person holding not less than ten per cent of thebeneficial interest in the company, the number, description and amount of any shares in, ordebentures of, the company or any other body corporate, being the company’s subsidiary orholding company, or a subsidiary of the company's holding company, which are held by or intrust for him, or of which he has a right to become holder, whether on payment or not.

Unquote

3.3 Requirement for Directors to make disclosures of shareholdings

Section 221 of the Companies Ordinance, 1984 has required the directors of the company tomake disclosures of their shareholding by giving notice to the company. The complete extract ofthe relevant Section 221 is reproduced as under:

Quote:221. Duty of directors, etc., to make disclosure of shareholdings, etc. - (1) Every director,officer and such other person as is referred to in sub-section (1) of section 220 shall give notice tothe company of such matters relating to himself as may be necessary for the purpose of enablingthe company to comply with the provisions of section 220.

(2) The notice referred to in sub-section (1) shall be given in writing within fifteen days ofeach requisition or change of interest or right, as the case may be, referred to in sub-section (1) ofsection 220 or date of agreement referred to in sub-section (2) of that section.

(3) Any person who knowingly and willfully fails to comply with sub-section (1) or sub-section (2) shall be punishable with imprisonment for a term, which may extend to two years, orwith fine which may extend to five thousand rupees, or with both.

Unquote

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3.4 Requirement for Directors to submit statements of beneficial ownership

Section 222 of the Companies Ordinance, 1984 has required the directors of the company tosubmit statements of beneficial ownership of listed securities on prescribed form. The relevantextract of Section 222 is reproduced as under:

Quote:222. Submission of statements of beneficial owners of listed securities. - (1) Every director,chief executive, managing agent, chief accountant, secretary or auditor of a listed company whois or has been the beneficial owner of any of its equity securities, and every person who isdirectly or indirectly the beneficial owner of more than ten per cent of such securities, shallsubmit to the registrar and the Commission a return in the prescribed form containing theprescribed particulars pertaining to the beneficial ownership of such securities and notify inprescribed form particulars of any change in the interest aforesaid.

Unquote

3.5 Requirement for circulating shareholding Information with Director Report

There is another pre-requisite under Section 236 (2) (d) titled “Director’s Report” wherein it hasbeen required that in case of a public company or a private company, which is a subsidiary of apublic company, the information about the pattern of holding of shares in prescribed form, shallalso be circulated along with the directors report.


Chapter 4: An Overview of BusinessGroups and Families

Historical PerspectiveOn the 21st day of April 1968, during the regime of President Ayub Khan, the then ChiefEconomist of the Planning Commission of Pakistan, Dr. Mahboob-ul-Haq, issued a list of 22wealthiest families of Pakistan, which created a stir in the business and elite circles of thecountry. According to Dr. Mahboob-ul-Haq, these 22 families controlled 66 percent of thebusiness conglomerates and corporations, and owned 87 percent of the share in the bankingand insurance sectors. These richest families included Adamjee, Bawany, Dawood, Saigols,Colony, Valika, Fancy, Crescent, Wazir Ali, Gandhara, Ispahani, Habib, Valika, Khyber,Nishat, Beco, Gul Ahmed, Arag, Hafiz, Karim, Milwala and Dada. These business groupsconsolidated their holdings during the Ayub Khan regime and remained flourished till early1970’s, when the then Prime Minister, Zulfiqar Ali Bhutto nationalized the industries inPakistan. This, however, does not signify the logical end to these business giants andgrouping;, most of them survived and sustained their businesses during the nationalizationperiod and flourished steadily in the later years.

Sector-wise Analysis of Sample Companies ICMAP research indicates that, even today, the leading corporate groups and families, most ofwhich are in business since the very inception of the country, are holding the controlling stakesof companies in almost all the manufacturing sectors as well as the services sectors, such asbanks and insurance companies. As already mentioned in the ‘Executive Summary’ of thisReport, in 28 out of 44 sample companies, the business groups/ families have controllingposition. Let us now analyze below the dominance of these groups / families in each sector:

Sugar Sector Chart-1 below provides names of Pakistani business groups, which are controlling the majorstakes of four sugar mills. Pangrio sugar mill is not included in this chart, as it is not backed byany corporate group or family-run business.

Chart – 1: Sugar Sector

Companies Dominating Business GroupsMehran Sugar Hasham GroupMirpurkhas Sugar Ghulam Faruque GroupFaran Sugar Amin Bawany GroupJDW Sugar JDW Group

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Textile Sector It can be observed from Chart-2 below that the five leading corporate groups and families arecontrolling the major stakes in the five textile mills.

Chart – 2: Textile Sector

Companies Dominating Business GroupsGul Ahmed Textile Gul Ahmed Family / GroupSapphire Textile Sapphire GroupCrescent Textile Crescent Group Din Textile Din Group Premium Textile Adam Group

Refinery SectorThe refinery sector in Pakistan has a very small base, with only five or six companies engaged inthe production of refined petroleum products. Out of the four selected refineries, three havecontrolling stakes of two leading business groups viz. Attock group and Byco group (see Chart-3).

Chart – 3: Refinery Sector

Companies Dominating Business GroupsByco Refinery Byco GroupNational Refinery Attock Oil Group Attock Refinery Attock Group

Fertilizer SectorIt is evident from Chart-4 below that all the selected fertilizer companies are wholly owned bythe three major business groups (Dawood, Fatima and Engro) and a leading Charitable trust(Fauji).

Chart – 4: Fertilizer Sector

Companies Dominating Business GroupsEngro Chemicals Engro GroupFauji Fertilizer Fauji FoundationFatima Fertilizer Fatima GroupPak Arab Fertilizer Fatima GroupDawood Hercules Dawood Group


Pharmaceutical SectorChart-5 shows that in the pharmaceutical sector, apart from Ferozesons, which is a Pakistaniventure, the other four companies are either subsidiaries or member companies of leadingglobal pharmaceutical firms from UK, USA and France.

Chart – 5: Pharmaceutical SectorCompanies Dominating Business Groups

GlaxoSmithKline (GSK) Parent Company – UK Abbott Laboratories Parent Company – USAFerozesons Pakistani Company Sanofi Aventis Parent Company – FranceWyeth Laboratories Parent Company – USA

Cement Sector It can be observed from Chart-6 below that three Pakistan business group (Attock, Nishat,Yunus Brothers), a French business corporation holds the dominating stake of cementcompanies. Fauji cement, however, is fully owned by the Fauji Foundation of Pakistan.

Chart – 6: Cement Sector

Companies Dominating Business GroupsLafarge Cement Lafarge Group – FranceAttock Cement Attock Group Lucky Cement Yunus Brothers GroupD. G. Khan Cement Nishat GroupFauji Cement Fauji Foundation

Automobile SectorChart-7 indicates that Japanese corporations are having controlling stakes in selectedautomobile companies in Pakistan, with the exception of Ghandhara Nissan, in which majorshareholdings are of a Pakistani company viz. Bibojee Service Pvt. Ltd. Indus Motors is ownedby Toyota Group.

Chart – 7: Automobile SectorCompanies Dominating Business Groups

Hino Pak Motors Parent Company – Japan Dewan Motors Dewan GroupPak Suzuki Motors Parent Company – JapanGhandhara Nissan Bibojee Service Ltd - PakistanIndus Motors Toyota Group - Japan

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Banking Sector It is visible from Chart-8 below that leading business groups (Rupali, Dawood, Nishat andIbrahim) have controlling stakes in the shareholdings of four selected banks. Soneri Bank iscontrolled by Feerasta family, who are owners of Rupali group, whereas Bank Al-Habib isowned by the Dawood Habib group of the Habib Family.

Chart – 8: Banking Sector

Companies Dominating Business Groups

Soneri Bank Rupali Group

Bank Al-Habib Dawood Habib Group

MCB Bank Nishat Group

Askari Bank Army Welfare Trust

Allied Bank Ibrahim Group

Insurance SectorChart-9 gives a view of the business group in control of sample insurance companies.

Chart – 9: Insurance Sector

Companies Dominating Business Groups

Adamjee Insurance Nishat Group

United Insurance United International Group

NJI Hashoo Group/Agha Khan Foundation

EFU EFU Group

Premier Insurance Pakistani Company


Chapter 5: Sector-wise Analysis & Findings

Sugar Sector

The study points out that the ownership structure in the sugar sector is quite diversified. Thisis evident from the fact that in Pangrio sugar mill, almost 78% shares are in the hands ofgeneral public, whereas in Mehran sugar mill, the promoters & directors hold around 76%share of the company. Likewise, in Mirpur Khas sugar mill, the institutional investors hold74% shares of the company.

Textile Sector

It is concluded from our analysis that the ownership composition in the textile sector is verymuch skewed towards the promoters and directors of the company, signifying the dominance of group/ family run businesses. It is evident that the Directors’ ownership share in four-selectedtextile companies viz. Gul Ahmed, Sapphire, Din and Premium textile, ranges between 44percent to 60 percent. Crescent textile is, however, the exception, in which the Directors’ownership share is only 5 percent.

Refinery Sector

It reveals from our analysis that the ‘associated companies and undertakings’ are the dominantshareholder in case of refineries, holding in the range of 50% to 68% shares in the total sharecapital. Quite noticeably, the Directors in all four refineries hold less than 1% share.

Fertilizer Sector Our analysis shows that ‘associated companies’ hold a larger portion of share capital in threefertilizer companies viz. Engro, Fatima and Pak Arab Fertilizer. In other two companies i.e. Fauji and Dawood Hercules, the institutional investors (including banks, DFIs, financial institutions,modaraba and mutual fund companies, etc) have major stake in the share capital.

Pharmaceuticals Sector It has come to light that in selected three pharmaceutical firms viz. GSK, Abbott andSanofi Aventis, the foreign parent/ holding companies have over 80% to 100%controlling stake as ‘Associated companies’. This trend is not seen in other two firms i.e. Wyeth and Ferozesons.

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Cement SectorOur study reveals that sponsors and directors in the four selected cement companies viz.Lafarge, Attock, D.G. Khan and Fauji Cement have less than 4% share in the respective sharecapitals, except Lucky cement, which has a comparatively higher share of 30% in the sharecapital of company. It is also seen that the selected cement companies have offered almost 38%share as an average to the general public which is quite good as against other sectors.

Automobile SectorOur analysis indicates that the percentage share of directors’ ownership in the four selectedautomobile companies viz. Hino Pak, Pak Suzuki, Gandhara Nissan and Indus Motor is lessthan one percent, with the exception of Dewan Motors, in which the promoters and directorshold around 33% share in the total share capital of the company.

Banking SectorIt is concluded from our study that only in Allied Bank, the promoters and directors are thedominant shareholders, whereas in other four banks the share of directors is quite limited i.e.less than 11 percent. The associated companies also hold around 39% share as an average inshare capital of selected banks.

Insurance Sector Our study shows that in the five selected insurance companies, the combined ownership shareof general public and associated companies is more dominant, as against other categories ofownership. In United Insurance, the combined share is 97%, whereas in NJI it is 95% and inPremier insurance, this share is around 75 percent. Adamjee insurance follows with 66% sahreand EFU insurance with 54 percent.


Chapter 6: Ownership Category-wiseAnalysis & Findings

‘Directors’ Ownership’ CategoryOur study concludes that the ownership of promoters & directors is more conspicuous in the‘textile sector’ as most of them are family-controlled. As per ranking table-1, the textile sectorcompanies claims three positions out of five, with 60% share of directors in Sapphire textile,followed by 54% share in Premium and 48% share in Din textile. Overall the average share ofdirectors in the five selected textile companies is 42%.

Two companies from sugar sector viz. Mehran sugar and JDW have also highest concentrationof shares in the category of directors ownership, with Mehran sugar on top with 76% share. Ourstudy shows that average share of sugar companies in this category is around 31 percent.

Table – 1: Rankings with respect to highest share of‘Directors Ownership’

Ranking Company Sector Percentage

1 Mehran Sugar Mill Sugar 76%

2 Sapphire Textile Mill Textile 60%

3 Premium Textile Textile 54%

4 Din Textile Textile 48%

5 JDW Sugar Sugar 46%

‘General Public Ownership’ CategoryIt is indicated from our analysis that ‘insurance companies’ have offered major portion of theirshare capital to the general public, with an average of around 48% shares. The sugar and cementsectors are two other sectors, which have offered average share of 42% and 38%, respectively, inthe general public ownership category.

As per ranking table-2, United insurance with 96% is on top of the ranking, with Premierinsurance placed at fourth position. Attock cement with 88% share and Pangrio sugar with 78%share are positioned at second and third rankings as per our analysis. The average share of fiveselected cement companies in this category is around 38 percent.

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Table – 2: Rankings with respect to highest share of ‘General Public Ownership’


1 United Insurance Insurance 96%

2 Attock Cement Cement 88%

3 Pangrio Sugar Mill Sugar 78%

4 Premier Insurance Insurance 63%

5 Crescent Textile Textile 61%

‘Associated Companies Ownership’ CategoryIt is evident from our study that associated companies have dominant ownership stake in threesectors viz. pharmaceuticals, automobile and refinery sectors. Our study concludes that theselected refineries have 59% share of associated companies, followed by 51% share inautomobile and 50% share in pharmaceutical sector.

As per ranking table-3, Hino Pak Motors in Automobile sector leads with 89%, followed 79%share each of GSK and Abbot Laboratories, both from Pharmaceutical sector. The Refinerysector companies are not reflected in this ranking, as their shares are less than 70 percent.

Table – 3: Rankings with respect to highest share of ‘Associated Companies Ownership’


1 Hino Pak Motors Automobile 89%

2 Glaxosmithkline Pharmaceutical 79%

3 Abbott Laboratories Pharmaceutical 79%

4 Lafarge Cement Cement 73%

5 Pak Suzuki Automobiles 73%

‘Institutional Ownership’ CategoryThe institutional investors are mainly banks, DFIs, financial institutions, modaraba and mutualfund companies. Our study suggests that institutional investors have dominant presence infertilizer, pharmaceutical, sugar and cement sectors.


As per ranking table-4, Wyeth laboratories (pharmaceutical sector) is on top of the rank with96% share of institutional investors ownership, followed by 84% share of Dawood Hercules(Fertilizer) and 74% share of Mirpurkhas sugar mill. Fauji fertilizer and D. G. Khan cement are at 4th and 5th ranks with 72% and 48% share, respectively.

Table – 4: Rankings with respect to highest share of ‘Institutional Ownership’


1 Wyeth Pharmaceutical 96%

2 Dawood Hercules Fertilizer 84%

3 Mirpurkhas Sugar Sugar 74%

4 Fauji Fertilizer Fertilizer 72%

5 D.G. Khan Cement Cement 48%

24 ICMAP Research

Chapter 7: Company-wise Analysis & Findings

1. Sugar Sector1.1. Selected Companies:

The following sugar mills have been selected for this analysis:

1) Pangrio Sugar Mill2) Mehran Sugar Mill3) Mirpur Khas Sugar Mill4) Faran Sugar Mill5) JDW Sugar Mill

1.2. Key Findings: 1.2.1. Our study reveals that the ownership structure in the sugar sector is

quite diversified, with 78% shares held by the general public in Pangriosugar mill; 76% shares in hand of promoters & directors in MehranSugar Mill and 74% shares held by institutional investors in MirpurKhas Sugar Mill.

1.2.2. Mehran Sugar Mill ranks first in the “Directors’ ownership category”,with highest concentration of 76% share in the total share capital. JDWsugar mill is on second position with 46%, followed by 28% of MirpurKhas sugar mill.

1.2.3. Pangrio Sugar Mill ranks first in the “General Public ownershipcategory”, with highest concentration of 78% share in the total sharecapital. JDW sugar mill stands second with 49%, followed by 41% of Faransugar mill.

1.2.4. Mirpur Khas Sugar Mill ranks first in “Institutional ownershipcategory”, with highest concentration of 74% share in total share capital.Faran sugar mill is on second position with 26%, followed by 19% ofPangrio sugar mill.

1.2.5. The category-wise ‘Average Ownership’ in the five sugar mills, selectedfor this study, is shown in percentage share as under:

Category (Sugar) Average (%)Directors' Ownership 31%General Public Ownership 42%Associated companies Ownership 0%Foreign Ownership 0%Institutional Ownership 25%


1.3. Company-wise Analysis of Ownership Structure:

1.3.1. Pangrio Sugar Mill The Directors have only 3% share in the total share capital of the company, whereas the ‘general public’ holding almost 78% shares, is the ‘dominantshareholder’. The ‘Institutional investors’ have 19% stake in the sugarmill.

1.3.2. Mehran Sugar Mill The Directors are the ‘dominant shareholder’ in the company with 76%share, followed by 23% shares held by the general public. It is quiteevident that the promoter group /family, having majority shares, runs the company affairs.

1.3.3. Mirpur Khas Sugar Mill Like Pangrio Sugar, the Directors’ ownership share in the total sharecapital of Mirpur Khas Sugar mill is also 3 percent. However, the‘dominant shareholder’ here are the ‘Institutional investors’, mostly jointstock companies and financial institutions. The general public holds 21%shares in the company.

1.3.4. Faran Sugar Mill The ownership is quite dispersed with 41% shares held by the generalpublic, which is also the ‘dominant shareholder’ in this case, followed by28% shares held by the Directors of the company. About 26% ofcompany’s shares are in the hands of institutional investors.

1.3.5. JDW Sugar Mill The ownership is equally balanced with almost 49% shares held by thegeneral public whereas 46% shares are in the hands of the Directors of thecompany. It can be noted that both the stakeholders seems to be ‘dominant shareholder’ in company. The institutional investors have only 4% sharein the share capital.

2. Textile Sector2.1 Selected Companies:

The following textile mills have been selected for this analysis: 1) Gul Ahmed Textile 2) Sapphire Textile 3) Crescent Textile 4) Din Textile 5) Premium Textile

2.2. Key Findings:

2.2.1. It is quite evident from our analysis that ownership in the textile sector,is very much skewed towards the promoters and directors of thecompany, signifying the dominance of group / family run businesses.

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2.2.2. Sapphire Textile ranks first in the “Directors’ ownership category”, withhighest concentration of 60% share in the total share capital. PremiumTextile stands second with 54%, followed by 48% of Din and 44% of GulAhmed.

2.2.3. Crescent Textile ranks first in the “General Public ownership category”,with highest concentration of 61% share in the total share capital. DinTextile is second with 41% and Gul Ahmed is on third position with 29%share.

2.2.4. Premium Textile ranks first in “Institutional ownership category”, withhighest concentration of 31% share in total share capital, followed by 24%share of Crescent Textile and 11% share of Din Textile.

2.2.5. Foreign investors have almost 20% share in total share capital of GulAhmed Textile, whereas other four companies do not have any foreignparticipation.

2.2.6. The category-wise ‘Average Ownership’ in the five textile companies,selected for this study, is shown in percentage share as under:

Category (Textile) Average(%)

Directors' Ownership 42%

General Public Ownership 31%

Associated companies Ownership 7%

Foreign Ownership 4%

Institutional Ownership 16%


2.3.1. Gul Ahmed Textile

Around 73% shares of the company are in the hands of Directors and thegeneral public, out of which the Directors’ share is almost 44 percent. The‘foreign investors’ also hold 20% stake in the company.

2.3.2. Sapphire Textile

The promoters and directors are quite obviously the ‘dominantshareholder’ in the company, holding not only 60% shares but also seem to be well in charge of the company’s affairs by holding indirectly around24% shares through the Associated companies & undertakings, undertheir control. The general public has a limited share in the company ofonly 10 percent.


2.3.3. Crescent Textile

Unlike Sapphire where the promoters have strong control over thecompany, the Crescent textile has offered around 61% shares to thegeneral public, out of which around 25% shareholders hold more than10% of share capital. The promoters and directors have a nominal share ofonly 5 percent, whereas the institutional investors have a larger share of24% in the company.

2.3.4. Din Textile

The ownership is equally balanced with almost 48% shares held bypromoters and directors, whereas 41% shares are in the hands of thegeneral public. The institutional investors also hold 11% shares in thecompany.

2.3.5. Premium Textile

The dominant shareholder is the promoter and directors of the company,holding almost 54% shares, whereas the general public has only 14% share in the company. It can be noted that the institutional investors have alarger share of 31% in the company, well over the representation ofgeneral public.

3. Refinery Sector3.1 Selected Companies:

The following four petroleum refineries have been selected for this analysis:

1) Byco Refinery 2) Pakistan Refinery 3) National Refinery 4) Attock Refinery

3.2. Key Findings:

3.2.1. It has transpired from our analysis that the ‘associated companies andundertakings’ are the dominant shareholder in case of refineries,holding in the range of 50% to 68% shares in total share capital. Quitenoticeably, the Directors in all four refineries hold less than 1% share.

3.2.2. Pakistan Refinery with 0.37% share in total share capital, is ahead of other refineries viz. Byco with 0.1%, Attock 0.07% and National refinery with nil shares in the “Directors’ ownership category”.

3.2.3. Byco Refinery ranks first in the “General Public ownership category”,with highest concentration of 27% share in the total share capital, followed by 14% and 13% of Pak Refinery and Attock Refinery, respectively.

28 ICMAP Research

3.2.4. Pakistan Refinery ranks first in “Institutional ownership category”,with highest concentration of 25% share in total share capital, followed by22% share of National Refinery and 21% share of Attock Refinery.

3.2.5. Foreign investors (including IDB) have almost 18% share in the totalshare capital of National Refinery. In Attock Refinery, the foreigninvestors stake is 4 percent. Pakistan Refinery and Byco do not have anyforeign investor share.

3.2.6. The category-wise ‘Average Ownership’ in the four Refineries, selectedfor this study, is shown in percentage share as under:

Category (Refinery) Average(%)







3.3.1 Byco Refinery

Around 68% shares of the company are held by the Associated companieswith a negligible share of only 0.14% held by the promoters and directors.The general public has 27% stake in the company. The presence ofinstitutional investors is not much prominent in Byco refinery, havingonly 1% share.

3.3.2. Pakistan Refinery

With almost 60% share in the total share capital, the associated companiesare the ‘dominant shareholder’ in Pakistan refinery. The institutionalinvestors are the second highest stakeholders in the company, having 25%share, followed by 14% share held by the general public.

3.3.3. National Refinery

The Associated companies, having almost 50% share are majorshareholder in the company, with 22% share held by the institutionalinvestors and 18% share in possession of foreign investors. The generalpublic has a very nominal share of only 9% in the National refinery.


3.3.4. Attock Refinery

Like the other refineries, the associated companies and undertakings arethe major shareholders in Attock refinery, having 58% share in total sharecapital. About 21% share are held by the institutional investors, whereasthe general public have a share of 13 percent. Foreigners’ hold 4% share inthe company.

4. Fertilizer Sector4.1. Selected Companies:

The following five fertilizer companies have been selected for this analysis:

1. Engro Corporation (Formerly Engro Chemicals) 2. Fauji Fertilizer 3. Fatima Fertilizer 4. Pak Arab Fertilizer5. Dawood Hercules Chemical

4.2. Key Findings:

4.2.1. Our analysis reveals that institutional investors (including banks, DFIs, financial institutions, modaraba and mutual fund companies, etc) havemajor stake in the share capital of Fauji and Dawood Hercules, whereasassociated companies hold a larger portion of share capital in Engro,Fatima and Pak Arab Fertilizer companies.

4.2.2. Pak Arab Fertilizer leads the other companies with 41% share in totalshare capital, in the “Directors’ ownership category”. Fatima is on second position with 21% share, followed by 10% of Dawood Hercules.

4.2.3. Engro Chemicals ranks first in the “General Public ownership category”,with highest concentration of 25% share in total share capital. Engro issecond with 22% share, followed by 14% of Fauji and 8% of FatimaFertilizer.

4.2.4. Fatima Fertilizer is on top of list in the “Associated Companiesownership category”, with highest concentration of 67% share, followedby 53% share of Pak Arab Fertilizer and 48% share of Engro Corp. In Faujiand Dawood Hercules, the associated companies have no contribution inthe share capital.

4.2.5. Foreign investors hold a nominal share of 7% in Fauji Fertilizer, whereasin the remaining companies, there are no shares of foreign investors.

4.2.6. The category-wise ‘Average Ownership’ in the five Fertilizer companies,selected for this study, is shown in percentage share as under:

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Category (Fertilizer) Average(%)




Foreign Ownership 1.4%



4.3.1. Engro Corporation (formerly Engro Chemical)

The associated companies hold around 48% shares in the total sharecapital of Engro Corp, majority of which owned by Dawood Groupincluding Dawood Hercules Chemicals. Around 22% shares in the handsof general public and 20% owned by institutional investors. Thepromoters and directors have a nominal share of 3% in the share capital ofthe company.

4.3.2. Fauji Fertilizer

The institutional investors own a big portion of around 72% share, and arethe definitely the dominant shareholder in the company. Around 14%shares are in the hand of general public, whereas 7% shares held byforeign investors.

4.3.3. Fatima Fertilizer

Being part of Fatima Group, a major share of around 67% shares in thecompany are held by the associated companies and undertakings. Thepromoters and directors have 21% share in the share capital of thecompany, whereas only 8% shares are held by the general public.

4.3.4. Pak Arab Fertilizer

Around 53% shares are in the hands of institutional investors, whereas the promoters and directors hold 41% share in the share capital. Theinstitutional investors (i.e. banks, DFIs, etc) do not have any stake in thecompany.

4.3.5. Dawood Hercules Chemicals

The institutional investors are quite dominant with around 84% share inthe total share capital of the company. The promoters and directors hold10% share, whereas the general public have 6% stake in the company.


5. Pharmaceutical Sector5.1. Selected Companies:

The following five pharmaceutical companies have been selected for this analysis:

1. GlaxoSmithKline (GSK) 2. Abbott Laboratories 3. Ferozesons Laboratories 4. Sanofi Aventis 5. Wyeth Laboratories

5.2. Key Findings:

5.2.1. Our analysis indicates that with the exception of Wyeth and Ferozesons, in the other pharmaceutical firms viz. GSK, Abbott and Sanofi Aventis,the foreign parent/ holding companies have around 80% to 100% shareas an ‘Associated company’ in the total share capital of the companies.

5.2.2. In GSK the foreign holding company, M/s. Setfirst Ltd, UK have 100%share in the share capital shown in category of ‘Associated companies &undertakings”. Similarly, in Abbott Laboratories, M/s. Abbott AsiaInvestments Ltd, UK hold 99% share, whereas in Sanofi Aventis, M/s.SECIPE, France holds 81% share.

5.2.3. The average share of ‘directors’ ownership’ in the five selectedpharmaceutical companies is only 5.2%, which is very insignificant. Thehighest concentration of shares in the “Directors’ ownership category” isseen in Ferozesons with 14% share, followed by 12% of Sanofi Aventis.

5.2.4. Ferozesons ranks first in the “General Public ownership category”, withhighest concentration of 36% share in total share capital. Abbott is secondwith 12% share, followed by 4% of Sanofi Aventis and 3% each of GSK and Wyeth.

5.2.5. In GSK and Abbott, the highest share of 79% each is observed in category of “Associated Companies ownership”, which represents the majorinvestment made by their respective foreign principal / holdingcompanies. Sanofi Aventis follows with 65%, out of which 81% isrepresented by its holding company. Wyeth does not have any share ofassociated companies.

5.2.6. Wyeth Laboratories is well ahead of other companies with 96% share inthe “institutional ownership category”, followed by 21% of Ferozesons.GSK and Sanofi Aventis have 18% share each of institutional investors.

5.2.7. The category-wise ‘Average Ownership’ in five pharmaceuticalcompanies, selected for this study, is shown in percentage share as under:

32 ICMAP Research

Category (Pharmaceutical) Average(%)

Directors' Ownership 5%General Public Ownership 12%Associated companies Ownership 50%Foreign Ownership 0%Institutional Ownership 32%


5.3.1. GlaxoSmithKline

The associated companies have around 79% shares in the total sharecapital of GSK, which are wholly owned by its foreign holding company,M/s. Setfirst, UK. The second major investor in GSK with 18% share is theinstitutional investor, whereas the general public holds only 3% share inthe company.

5.3.2. Abbott Laboratories

The associated companies are the dominant shareholders with 79% sharein the total share capital, out of which almost 99% share are owned by theholding company, M/s. Abbott Asia Investments Ltd, UK. The generalpublic hold 12% share, whereas institutional investors have a share of 9percent.

5.3.3. Ferozesons Laboratories

The ownership structure is quite dispersed with 36% of share capital inhands of general public; 27% held by the associated companies; 21% byinstitutional investors and 14% share owned by the promoters anddirectors of company.

5.3.4. Sanofi Aventis

The holding company, M/s. SECIPE, France holds almost 81% share, as an associated undertaking in the company, out of 65% of share capital incategory of associated companies. The institutional investors have 18%share, whereas 12% share is owned by the sponsors and directors. Only4% of the share capital has been offered to the general public.

5.3.5. Wyeth Laboratories

The directors of the company hold only 100 shares in the company withalmost nil share percentage and the general public have also a meager 3%share. The shares are highly concentrated in the hands of institutionalinvestors with 96% share, whereas there are no associated companies.


6. Cement Sector6.1. Selected Companies:

The following five cement companies have been selected for this analysis:

1. Lafarge Cement 2. Attock Cement 3. Lucky Cement 4. D.G. Khan Cement 5. Fauji Cement

6.2. Key Findings:

6.2.1. Our study reveals that sponsors and directors in the four selectedcement companies viz. Lafarge, Attock, D.G. Khan and Fauji Cementhave less than 4% share in the respective share capitals, except Luckycement, which has a comparatively higher share of 30% in the sharecapital of company.

6.2.2. The average share of ‘directors’ ownership’ in the five selected cementcompanies is 6.8%, which is quite insignificant.

6.2.3. Attock Cement ranks first in the “General Public ownership category”,with highest concentration of 88% share in total share capital, followed by33% of D.G. Khan and 32% of Lucky cement. Fauji is at fourth position with20% share in the total share capital, whereas Lafarge has only 18% share.

6.2.4. Lafarge Cement has a high concentration of 73% ownership in sharecapital owned by the associated companies. Fauji is second with 49%share and Lucky follows with 10% share. Attock and D.G. Khan havealmost nil share.

6.2.5. The foreign investors hold 11% share in D. G. Khan cement, 3% share inLafarge and 1% share in Fauji cement. In Attock and Lucky cement, therethe foreign investors have made no investments.

6.2.6. D.G. Khan Cement ranks first in the category of “institutionalownership” with 48% share, followed by 30% of Fauji Cement and 12%share each of Attock and Lucky cement. Lafarge has 6% share ofinstitutional investors.

6.2.7. The category-wise ‘Average Ownership’ in five cement companies,selected for this study, is shown in percentage share as under:

34 ICMAP Research

Category (Cement) Average(%)

Directors' Ownership 7%General Public Ownership 38%Associated companies Ownership 26%Foreign Ownership 3%Institutional Ownership 22%


6.3.1. Lafarge Cement

The associated companies hold around 73% shares in the total sharecapital, whereas the general public has a share of only 18 percent. Thepromoters and directors of the company hold only 12,325 shares in thecompany, which is almost zero percent in the total share capital.

6.3.2. Attock Cement

The associated companies with 88% share are undoubtedly the dominantshareholders in Attock Cement. The institutional investors are the secondhighest stakeholders with 12% share, whereas the directors of thecompany hold only 11 shares, out of total share capital of around 86million shares.

6.3.3. Lucky Cement

The ownership structure is quite dispersed with 32% of share capital inhands of general public and 30% share in custody of the promoters anddirectors. It is to be noted that the second highest concentration of 17% isin the category of “Others”, detail of which is not specified in the annualreport. The institutional investors hold 12% share, whereas the associatedcompanies have 10% stake.

6.3.4. D. G. Khan Cement

The institutional ownership is quite dominant in D.G. Khan with 48%share in total share capital, followed by 33% share of the general public.The foreign investors have a share of around 11% in the share capital of the company.

6.3.5. Fauji Cement

The associated companies are the dominant shareholders with 49% share;followed by 30% share of institutional investors and 20% share of generalpublic. The directors of the company hold only 7 shares out of total sharecapital of almost 742 million, which is very negligible.


7. Automobile Sector7.1. Selected Companies:

The following five automobile companies have been selected for this analysis:

1. Hino Pak Motors 2. Dewan Motors 3. Pak Suzuki 4. Ghandhara Nissan 5. Indus Motors

7.2. Key Findings: 7.2.1. Our analysis indicates that the percentage share of directors’ ownership

in the four selected automobile companies viz. Hino Pak, Pak Suzuki,Gandhara Nissan and Indus Motor is less than 1 percent, with theexception of Dewan Motors, in which the promoters and directors holdaround 33% share in the total share capital of the company.

7.2.2. Dewan Motors ranks first in the “General Public ownership category”,with highest concentration of 41% share in total share capital, followed by17% of Gandhara Nissan and 6% of Pak Suzuki. Indus Motor and HinoPak have offered 5% and 2% share, respectively to the general public.

7.2.3. Associated companies are the dominant shareholders in selected autocompanies, mainly due to investments by their holding /parentcompanies. In Hino Pak Motor, around 89% of company’s share capital,representing the associated companies, are wholly owned by parentcompany, M/s. Toyota Motors Corporation, Japan and Toyota TsushoCorporation, Japan. Likewise, in Pak Suzuki Motors, almost 73% sharecapital (under associated companies category) is wholly owned by M/s.Suzuki Motor Corporation, Japan. In Gandhara Nissan, almost 88% shareis held by a Pakistani Group viz. M/s. Bibojee Services Pvt. Ltd, whereas12% share is held by M/s. UD Trucks Corporation, Japan (FormerlyNissan Diesel Motor Co. Ltd., Japan).

7.2.4. M/s. Toyota Motor Corporation and Toyota Tsusho Corporation ofJapan collectively hold around 38% share in the total share capital ofIndus Motor, whereas 35% share holding is with the Overseas PakistanInvestors AG. The compiled figures indicates that 81% shares of IndusMotor are held by Foreign Investors, including the above two Japanesecompanies & overseas Pakistanis.

7.2.5. Pak Suzuki Motor ranks first in the category of “institutionalownership” with 13% share, followed by 11% of Dewan Motor and 9% ofHino Pak.

7.2.6. The category-wise ‘Average Ownership’ in the five automobilecompanies, selected for this study, is shown in percentage share as under:

36 ICMAP Research

Category (Automobile) Average(%)







7.3.1. Hino Pak Motor

Holding 89% share in the total capital, the associated companies are thedominant shareholders in the company. The general public share isnegligible with only 2 percent, whereas the percentage share of directors’ownership in the company comes to almost zero. The Institutionalinvestors, however, have 8% stake in Hino Pak Motor.

7.3.2. Dewan Motor

The general public is the major shareholders in Dewan with 41% share inthe share capital, whereas the promoters and directors also hold 33% share in the company. The associated companies hold around 15% sharewhereas 11% share is in the hands of institutional investors.

7.3.3. Pak Suzuki Motor

M/s. Suzuki Motor Corporation, Japan wholly owns 73% of the total share capital of Pak Suzuki in the category of Associated companies &undertakings. Only 6% shares are in the hands of general public, whereasthe institutional investors hold 13% share in the company.

7.3.4. Gandhara Nissan Motor

The associated companies have the highest ownership with 73% share, out ofwhich almost 88% are owned by a Pakistani Group viz. M/s. Bibojee Services Pvt. Ltd, whereas 12% share is held by M/s. UD Trucks Corporation, Japan(Formerly Nissan Diesel Motor Co. Ltd., Japan). The general public holdaround 17% share, whereas institutional ownership is 8 percent.

7.3.5. Indus Motor

Around 38% shares of Indus Motor are owned collectively by M/s. ToyotaMotor Corporation and M/s. Toyota Tsusho Corporation, Japan, whereas 35% share is held by the Overseas Pakistan Investors AG. The directors of thecompany hold only 1% share in the company, whereas 6% each of the sharecapital are in the hands of institutional investors and associated companies.


8. Banking Sector8.1. Selected Banks:

The following five Banks have been selected for this analysis:

1. Soneri Bank 2. Bank Al Habib 3. MCB Ltd. 4. Askari Bank 5. Allied Bank

8.2. Key Findings:

8.2.1. It is concluded from our study that only in Allied Bank, the promotersand directors are the dominant shareholders, whereas in other fourbanks the share of directors is quite limited i.e. less than 11 percent.

8.2.2. Allied Bank ranks first in the category of ‘Directors ownership’ withhighest concentration of 44% share in the total share capital, followed by11% share of Bank Al-Habib and 8% share of MCB Ltd. The other twobanks viz. Soneri and Askari have negligible share percentage of 1% and0% respectively.

8.2.3. Bank Al-Habib leads other selected banks in offering highest share of 47% to the general public. Askari is second with 19% share whereas MCB,Soneri and Allied Bank have less than 15% share of general public in totalshare capital.

8.2.4. In Soneri, Askari and MCB, more than 50% concentration of shares iswitnessed in the category of “Associated Companies ownership”. InAllied Bank associated companies hold 39% share, whereas in Bank AlHabib, only 2% share are held by the associated companies.

8.2.5. MCB Ltd. ranks on top in the category of “foreign ownership” with 16%share, followed by Soneri Bank having 5% share of foreign companies.Bank Al Habib, Askari and Allied Bank have less than 2% share in thiscategory.

8.2.6. The institutional investors are seen dominant in Bank Al Habib (32%),Askari (29%) and Soneri (27%), whereas in MCB Ltd, institutionalinvestors own only 8% share in total share capital.

8.2.7. The category-wise ‘Average Ownership’ in the five selected banks isshown in percentage share as under:

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Category (Banks) Average(%)







8.3.1. Soneri Bank

The Feerasta family, owners of the Rupali group, holds the controllingstake in the Soneri bank. The group's primary activities are centered onthe synthetic textile industry. The group, through Ferrasta familymembers and nominees, maintains a dominant position on the bank'sboard of directors.

The Rupali Group is a leading business group in Pakistan with diversecommercial interests ranging from manufacturing, exporting andindenting to banking and trade financing. The associated companies holdaround 53% shares in the total share capital of Soneri Bank, majority ofwhich are owned by the Feerasta family (Rupali Group). Institutionalinvestors own around 27% shares, whereas general public holds only 14share in the total share capital.

8.3.2. Bank Al-Habib

The Dawood Habib Group of the Habib Family established Bank Al-Habib in Pakistan in 1991 on the invitation of the Pakistani government.The directors and promoters have almost 11% share in the Bank, whereasthe general public holds 47% share. Institutional investors own 32% stakein the Bank.

8.3.3. MCB Ltd.

This was the first bank to be privatized in 1991 and was purchased by aconsortium of Pakistani corporate groups - led by Nishat Group, whichowns a majority stake in the bank. Founded in 1948, Nishat Group is aleading and diversified business group in Pakistan, having strongpresence in banking, textile, cement and insurance sectors. In May 2008,Malaysian bank, Maybank and MCB signed an agreement, wherebyMaybank acquired 20% of the ordinary shares in MCB from Nishat Group.


Our research indicates that the “Associated companies”, includingMaybank of Malaysia, owns the highest stake of 50% in the MCB, followed by 16% shares owned by the foreigners. The promoters and directors holdonly 8% shares in the bank, whereas 15% shares are held by the generalpublic.

8.3.4. Askari Bank

The Army Welfare Trust (AWT), as an associated company, owns 51%shares in Askari Bank, followed by the institutional investors (i.e. banks,DFIs, NBFIs, insurance companies etc) holding around 29% shares. Thegeneral public owns 19% stake, whereas the directors have almostnegligible share in bank.

8.3.5. Allied Bank

The Consortium of Ibrahim group and its sponsors hold more than 80%stake in the shareholding of the Allied Bank. The promoters and directorsare quite visibly the dominant shareholders in the ABL, with 44%shareholding, followed by 39% shares held by the associated companies. It is to be noted here that M/s. Ibrahim Fibers Ltd, one of the sister concernsof Ibrahim group, owns around 94% share in the associated companiescategory. The general public have only 1% stake in the bank, whereas theinstitutional investors hold around 14% share. Ibrahim Leasing Ltd. hasalso been merged into Allied Bank.

9. Insurance Sector9.1. Selected Companies:

The following five companies have been selected for this analysis:

1. Adamjee Insurance 2. United Insurance 3. New Jubilee Insurance (NJI) 4. Eastern Federal Union Insurance (EFU) 5. Premier Insurance

9.2. Key Findings:

9.2.1. Our study shows that in the five selected insurance companies, thecombined ownership share of general public and associated companiesis more dominant, as against other categories of ownership. In UnitedInsurance, the combined share is 97%, whereas in NJI it is 95% and inPremier this share is around 75 percent. Adamjee insurance followswith 66% and EFU insurance with 54 percent.

9.2.2. EFU Insurance ranks first in the category of ‘Directors ownership’ withhighest concentration of 18% share in the total share capital, followed by4% share each of NJI and Premier insurance. United insurance and

40 ICMAP Research

Adamjee insurance have both less than 2% share in the directors’ownership category.

9.2.3. United Insurance is well ahead of other four insurance companies in thecategory of “general public ownership” with 96% share in the total sharecapital of the company. Premier insurance is in second position with 63%share, followed by 30% share of Adamjee and NJI, respectively. EFU is thelast of these selected insurance companies, with 25% share in thiscategory.

9.2.4. NJI leads the other insurance companies with 65% share in the category of“Associated Companies ownership”. In Adamjee insurance, theassociated companies have overall share of 36% whereas in EFU it is 29percent. Premier insurance and United Insurance have 29% and 1% share,respectively.

9.2.5. EFU and Adamjee are the two insurance companies in which theforeigners own some shares. In EFU foreign ownership is 6% whereas inAdamjee it is around 4 percent. The other companies have no foreignownership.

9.2.6. The institutional investors are seen dominant in Adamjee insurance(31%), Premier (20%) and EFU (17%), whereas in United and NJI theinstitutional investors have insignificant share of less than one percent.

9.2.7. The category-wise ‘Average Ownership’ in the five selected insurancecompanies is shown in percentage share as under:

Category (Insurance) Average(%)







9.3.1. Adamjee Insurance

The Nishat Group holds the controlling share in Adamjee insurance. TheMCB Bank Ltd., a subsidiary of Nishat group, acquired the managementrights of the company in 2004. The ownership structure seems quiteevenly spread among associated companies (36%), institutional investors(31%) and general public (30%). MCB Bank Ltd. holds around 82% share


in the associated companies category. The promoters and directors havenegligible share in the company.

9.3.2. United Insurance

The most noticeable feature of United insurance, which differentiates itfrom other insurance companies, is that almost 96% of its shares are inhands of the general public. The directors own 2% shares in the company,whereas other major stakeholders viz. associated companies andinstitutional investors have less than 1% share in the insurance company.

9.3.3. New Jubilee Insurance (NJI)

It is quite apparent from the ownership structure of NJI, that the two mainstakeholders i.e. associated companies and the general public, collectivelyhold around 95% share of the company. The directors’ stake in NJI is only4 percent.

9.3.4. EFU

It appears from EFU’s ownership composition that none of thestakeholder enjoys dominant position. However, the directors andpromoters (18% share), in combination with their own associatedcompanies (29% share), have a controlling stake of around 47% in thecompany. The general public owns around 25% share, whereas theinstitutional investors have 17% stake in EFU.

9.3.5. Premier Insurance

The general public is quite visibly the dominating stakeholder, withalmost 63% share in the total share capital of Premier insurance. Theinstitutional investors hold around 20% share, whereas the associatedcompanies have a share of 12 percent. The directors own only 4% share inthe company.

42 ICMAP Research

Annexure(Tables)

Annexure (Tables)SUGAR SECTOR

Pangrio Mehran Mirpur Khas Faran JDWTotal Shares 10,850,000 14,293,125 7,027,680 21,651,044 48,988,977

No of shareholders 2,559 1,411 1,676 1,821 1,291

Average share per shareholder 4240 10130 4193 11890 37947

Ownership Structure(Value in Number of Shares)

No. Categories Pangrio Mehran Mirpur Khas Faran JDW 1. Directors' Ownership 320,500 10,893,293 179,313 6,098,124 22,732,651

2. General Public Ownership 8,447,898 3,235,757 1,483,337 8,971,441 24,244,308

3. Associated companies Ownership

0 0 0 0 0

4. Foreign Ownership 0 0 0 0 38,367

5. Institutional Ownership 2,081,602 163,884 5,167,383 5,626,720 1,716,856

6. Others 0 191 197,647 954,759 256795

Total 10,850,000 14,293,125 7,027,680 21,651,044 48,988,977

Ownership Structure(Value in Percentage)

No. Categories Pangrio Mehran Mirpur Khas Faran JDW1. Directors' Ownership 3% 76% 3% 28% 46%

2. General Public Ownership 78% 23% 21% 41% 49%


0% 0% 0% 0% 0%

4. Foreign Ownership 0% 0% 0% 0% 0%

5. Institutional Ownership 19% 1% 74% 26% 4%

6. Others 0% 0% 3% 4% 1%

Total 100% 100% 100% 100% 100%

44 ICMAP Research

TEXTILE SECTOR

Gul Ahmed Sapphire Crescent Din PremiumTotal Shares 63,478,548 20,083,140 49,209,922 18,530,321 6,163,000

No of shareholders 2,067 524 1,757 829 679

Average share per shareholder 30710 38327 28008 22353 9077


No. Categories Gul Ahmed Sapphire Crescent Din Premium

1. Directors' Ownership 27,899,996 12,027,824 2,479,312 8,848,038 3,352,450

2. General Public Ownership 18,617,508 1,977,905 30,264,073 7,689,308 879,127


0 4,871,729 4,748,525 6,000 0

4. Foreign Ownership 12,393,528 0 0 0 0

5. Institutional Ownership 4,567,516 1,205,682 11,700,677 1,986,975 1,931,423

6. Others 0 0 17,335 0 0

Total 63,478,548 20,083,140 49,209,922 18,530,321 6,163,000


No. Categories Gul Ahmed Sapphire Crescent Din Premium

1. Directors' Ownership 44% 60% 5% 48% 54%



0% 24% 10% 0% 0%



6. Others 0% 0% 0% 0% 0%

Total 100% 100% 100% 100% 100%


REFINERY SECTORByco

RefineryPak

RefineryNationalRefinery

AttockRefinery

Total Shares 392,104,396 35,000,000 79,966,560 85,293,000

No of shareholders 14,809 3,864 4,282 6,455

Average share per shareholder 26,477 9,058 18,675 13,213


No. Categories BycoRefinery

PakRefinery

NationalRefinery

AttockRefinery

1. Directors' Ownership 565,599 129,963 2,856 56,984

2. General Public Ownership 107,633,967 5,069,347 7,081,963 10,883,324


264,755,758 21,012,250 39,983,280 49,371,224

4. Foreign Ownership 0 0 14,391,378 3193056

5. Institutional Ownership 2,996,139 8,654,926 17,669,194 17,906,496

6. Others 16,152,933 133,514 837,889 3,881,916

Total 392,104,396 35,000,000 79,966,560 85,293,000


No. Categories BycoRefinery

PakRefinery

NationalRefinery

AttockRefinery

1. Directors' Ownership 0% 0% 0% 0%

2. General Public Ownership 27% 14% 9% 13%


68% 60% 50% 58%

4. Foreign Ownership 0% 0% 18% 4%

5. Institutional Ownership 1% 25% 22% 21%

6. Others 4% 0% 1% 5%

Total 100% 100% 100% 100%

46 ICMAP Research

FERTILIZER SECTOREngro Fauji Fatima Pak Arab Dawood

HerculesTotal Shares 297,942,563 678,527,065 2,000,000,000 450,000,000 120,321,779

No of shareholders 13,980 10,438 17,451 24 2,736

Average share pershareholder

21,312 65,005 114,607 18,750,000 43,977


No. Categories Engro Fauji Fatima Pak Arab DawoodHercules

1. Directors' Ownership 9,441,486 593,161 414,814,333 184,462,062 12,126,986

2. General Public Ownership 65,521,027 95,022,283 154,800,626 0 6,893,084


144,390,600 0 1,346,328,761 239,177,781 0

4. Foreign Ownership 0 50,133,722 2,950,870 0 0

5. Institutional Ownership 59,891,409 491,247,973 57,578,120 0 101,300,664

6. Others 18,698,041 41,529,926 23,527,290 26,360,157 1,045

Total 297,942,563 678,527,065 2,000,000,000 450,000,000 120,321,779


No. Categories Engro Fauji Fatima Pak Arab DawoodHercules




48% 0% 67% 53% 0%



6. Others 6% 6% 1% 6% 0%

Total 100% 100% 100% 100% 100%


PHARMACEUTICAL SECTORGSK Abbott Ferozesons Sanofi

AventisWyeth

Total Shares 170,671,844 97,900,302 20,832,879 9,644,760 1,421,609

No of shareholders 4,822 2,844 2,321 907 682

Average share per shareholder 35,394 34,423 8,976 10,634 2,084


No. Categories GSK Abbott Ferozesons SanofiAventis

Wyeth

1. Directors' Ownership 7,843 37,243 3,004,552 1,120,002 100

2. General Public Ownership 4,653,292 11,788,479 7,551,186 425,620 48,701


134,453,588 77,189,064 5,719,917 6,312,805 0

4. Foreign Ownership 0 0 0 0 0


6. Others 30,363 0 122,202 44,936 4,647

Total 170,671,844 97,900,302 20,832,879 9,644,760 1,421,609


No. Categories GSK Abbott Ferozesons SanofiAventis

Wyeth




79% 79% 27% 65% 0%



6. Others 0% 0% 1% 0% 0%

Total 100% 100% 100% 100% 100%

48 ICMAP Research

CEMENT SECTORLafarge Attock Lucky D.G Khan Fauji

Total Shares 1,312,644,488 86,595,439 323,375,000 365,099,265 741,988,686




No. Categories Lafarge Attock Lucky D.G Khan Fauji

1. Directors' Ownership 12,325 11 95,928,999 13,071,517 7



961,116,888 0 31,455,575 0 367,188,207

4. Foreign Ownership 33,150,575 77,469 0 40,263,866 5,289,700


6. Others 1,350,051 0 55,065,829 16,631,367 2,798,548

Total 1,312,644,488 86,595,439 323,375,000 365,099,265 741,988,686


No. Categories Lafarge Attock Lucky D.G Khan Fauji




73% 0% 10% 0% 49%



6. Others 0% 0% 17% 5% 0%

Total 100% 100% 100% 100% 100%


AUTOMOBILE SECTORHino Pak Dewan Pak

SuzukiGandhara

NissanIndusMotor

Total Shares 12,400,560 88,973,255 82,299,851 45,002,500 78,600,000




No. Categories Hino Pak Dewan Pak Suzuki GandharaNissan

IndusMotor

1. Directors' Ownership 1,080 28,964,985 119 204,833 488,644

2. General Public Ownership 191,350 36,793,242 4,936,973 7,843,651 3,844,902


11,036,498 13,650,000 60,154,091 31,698,507 4,931,600

4. Foreign Ownership 1,000 0 0 418,750 63,880,779


6. Others 0 0 6,779,148 1,054,757 1,012,104

Total 12,400,560 88,973,255 82,299,851 45,002,500 78,600,000


No. Categories Hino Pak Dewan PakSuzuki

GandharaNissan

IndusMotor




89% 15% 73% 70% 6%



6. Others 0% 0% 8% 2% 1%

Total 100% 100% 100% 100% 100%

50 ICMAP Research

BANKING SECTORSoneri Bank

Al-HabibM.C.B Askari Allied

BankTotal Shares 602,322,115 732,164,306 760,214,979 642,743,940 782,100,834




No. Categories Soneri BankAl-Habib

M.C.B Askari AlliedBank

1. Directors' Ownership 8,317,552 81,958,594 57,412,411 14,823 341,398,799



317,249,981 13,681,210 379,123,038 325,014,793 303,364,427

4. Foreign Ownership 27,539,575 17,253,727 122,373,480 8,858,630 3,329,507


6. Others 446,910 40,954,030 29,408,417 78 19,501,042

Total 602,322,115 732,164,306 760,214,979 642,743,940 782,100,834


No. Categories Soneri BankAl-Habib

M.C.B Askari AlliedBank




53% 2% 50% 51% 39%



6. Others 0% 6% 4% 0% 2%

Total 100% 100% 100% 100% 100%


INSURANCE SECTORAdamjee United NJI EFU Premier

Total Shares 123,704,543 40,020,000 79,097,707 125,000,000 60,564,269

No of shareholders 6179 879 1413 2630 2634



No. Categories Adamjee United NJI EFU Premier

1. Directors' Ownership 154,967 713,100 2,921,989 22,076,695 2,397,295



44,109,392 509,562 51,199,123 36,208,371 7,449,708

4. Foreign Ownership 5,003,812 0 0 8,065,178 0

5. Institutional Ownership 37,903,805 26,557 364,332 20,999,208 12,063,916

6. Others 0 280,695 1,041,971 5779493 331,887

Total 123,704,543 40,020,000 79,097,707 125,000,000 60,564,269


No. Categories Adamjee United NJI EFU Premier




36% 1% 65% 29% 12%



6. Others 0% 1% 1% 5% 1%

Total 100% 100% 100% 100% 100%

52 ICMAP Research

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