LAHORE – The All Pakistan Textile Mills Association (APTMA) Chairman Mohsin Aziz has rejected the unilateral move of finalising proposed Corporate Rehabilitation Act by Securities & Exchange Commission of Pakistan (SECP) to juggernaut the industry on the pretext of loan recoveries.

He called the proposed law as a draconian one in its nature and said that SECP has initiated move under the pressure of banking industry while ignoring industry’s point of view altogether.

It may be noted that SECP is in the process of finalising recommendations on the proposed law under the garb of rehabilitation and restructuring of distress corporate entities, followed by its approval from the Economic Coordination Committee to the Cabinet and finally from the Parliament to provide it legal cover.

Chairman APTMA said that the textile industry was the largest borrower of bank loans in private sector therefore no fair recommendation on the proposed law is justified without its active participation. As a matter of fact, he said, the SECP was not taking into account the industry troubles owing to unprecedented energy shortage in the country, leading to bank defaults at large.

However, he clarified in the same breath that the APTMA was not in favour of willful default. But it is very much there to protect its member mills which are facing gas load shedding for 180 days during last fiscal year and six to eight hours a day electricity load shedding on independent and prime feeders.

Accordingly, he said the loan portfolio of textile industry is in a bad shape and some 33pc out of total industry loans are being bracketed into Non Performing Loans (NPLs) at present.

Mohsin feared that the proposed law under consideration of SECP would give way to the proposed action just by one term of non-payment and bring the law into action to enable the banks to appoint administrator on the respective mills to take over the unit and recover the disputed loans. He said any such law would not less than be a black law in the face of circumstances beyond the industry control at large.

He said any further progress on the SECP without taking APTMA on board would lead to devastating impact on industry, already lying on the ventilator due to short supply of energy.

He expressed concerns that the SECP was acting on the whims of a powerful lobby of bankers and it is right time for the government to intervene and stop any such adventurism on the part of SECP immediately. It will give a shoot and kill authority to the banks at the end of the day, he asserted.

Chairman APTMA has urged the government to reconsider the move aiming at closing down industry, which is mainstay of the economy, providing 150 million jobs and earning billions of dollars of foreign exchange annually while developing both backward and forward linkages in the cotton economy.

He deplored that the SECP was planning to squeeze textile industry when neighbouring India has reduced mark up by 5pc to facilitate its textile industry in order to create jobs and exports to the country.

He said textile industry in Pakistan is also having strong potential to grow and the government should extend a favourable treatment to it in a highly adverse situation instead of inviting troubles for it through illogical steps like the one hatched by the SECP.