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Pakistan's central bank rejects objections to KASB Bank valuation in merger

Pakistan's central bank said it disposed of objections raised by shareholders of the now-defunct KASB Bank regarding the bank's valuation in its merger into BankIslami Pakistan Ltd., noting that it does not see any reason to reconsider a fresh valuation.

The State Bank of Pakistan's June 28 order came after a court in April ordered it to reconsider its valuation of KASB Bank in the merger. Under the deal, KASB Bank merged with BankIslami Pakistan at a nominal price of 1,000 rupees in May 2015.

To comply with the court order, the central bank published a notice inviting objections to the valuation in newspapers, placed notices on the websites of the Central Depository Co., BankIslami (Pakistan) Ltd. and Pakistan Stock Exchange, and sent notices to about 4,000 members and shareholders on their addresses. In total, it received 334 objections from the shareholders.

The central bank said it reviewed all the objections and concluded that the independent evaluator's valuation of KASB Bank was reasonable.

As of June 28, US$1 was equivalent to 121.62 Pakistani rupees.