A short history of PVF | Pakistan Venture Fund (Private Ltd)

TL;DR Since most folks in our country really don’t understand the history of politics, military or religion (in the context of the state machinery) and its long term effects on their own lively hood and future, it maybe easier for them to understand the state of play of our fair land as a corporate entity instead of a Country to better understand what the hell is going on in Pakistan. This is a History lesson on steroids on bad corporate governance and uncontrolled growth, unchecked corporate power & its long term effects.

PVF was spun off from India Inc (II) and Incorporated on 14th Aug 1947, a Thursday. The incorporation documents show the LP to be a Mahomedali Jinnahbhai aka Muhammad Ali Jinnah who was over 70 Years old when he took office. As part of the spin off it was marred with a resource crunch from the onset, where by 1/6th of the corporate assets that were to be transferred were not done so by II resulting in a negative equity situation right at the time of launch of this new fund.

PVF was supposed to receive one-sixth of the pre-spin off assets, carefully divided by agreement, even specifying how many sheets of paper each side would receive. II due to its corporate bureaucracy and general malfeasance , however, was slow to deliver, hoping for the collapse of the nascent fund. Few officers of the old company had chosen PVF, resulting in staff shortages, as with any new venture, recruitment would take time.

The division also meant that for some of the farming entities where PVF had a stake, the markets to sell their crops were controlled by their former co manager. From the onset, there were shortages of machinery, sadly not all of which was made by companies where PVF was invested. (Still don’t btw)

In addition to the massive Human Resources problem/(read:refugees), the new PVF sought to save abandoned crops, establish security in a chaotic situation, and provide basic services to its shareholder.

According to economist Yasmeen Niaz Mohiuddin in her study of Pakistan, “although PVF was born in (Corporate) bloodshed and turmoil, it survived in the initial and difficult months after the spin-off only because of the tremendous sacrifices made by its people and the selfless efforts of its great leader.”

Clearly the founding LP was principled, articulate and an exceedingly logical person. After the hostile take over of Jungadh Co an independent firm, by II, part of the management team including but not limited to Sir Shah Nawaz Bhutto came and joined the company, to later launch other joint stock companies under the Bhutto Banner.

In June 1948, the LPs health was not doing well, he went to Quetta, in the mountains of Balochistan, where the weather was cooler than in Karachi. He could not completely rest there, addressing the officers at the Command and Staff College saying, “you, along with the other Forces of Pakistan , are the custodians of the life, property and honour of the people of Pakistan .” He returned to Karachi for 1 July opening ceremony for the State Bank of Pakistan, at which he spoke. A reception by the Canadian trade commissioner that evening in honour of Dominion Day was the last public event he attended. What ensued post his death was nothing less than remarkable.

Likely This was the meeting being referenced.

From the time of the creation of PVF, he was lucky to have an able and accomplished COO. Liaquat Ali Khan had always been a key proponent of portfolio diversification. So from 1947 till his term as COO he did some remarkable things to diversify PVF holdings and provide it with a solid base to get in to manufacturing, education, natural sciences and most of all eduction reforms at the grass roots level so that the future investment prospects of PVF would be better than its historical past. A quick re cap of the key investments undertaken from an earlier fund prospects are as below.

Liaquat Ali Khan called upon chemist Salimuzzaman Siddiqui, awarding him citizenship, and appointing him as his first PVF science adviser in 1950. During this same time, Khan also called physicist and mathematician Raziuddin Siddiqui, asking him to plan and establish educational research institutes and develop an anti II programs. Khan asked Ziauddin Ahmed to draft the national educational policy, which was submitted to his office in November 1947, and a road map to establishing education in the country was quickly adopted during Khans tenure. Khan authorized the establishment of the Sindh University.Under his auspices, science infrastructure was slowly built but he continued inviting Muslim scientists and engineers from India Inc to PVF, believing it essential for future progress.

In 1947–48 period, Ali Khan-Jinnah relations was contentious, and the senior Security folks at PVF and Jinnah the LP, himself became critical of Khan’s as the COO. This was the first time, the internal conflict arose due to the chief security officer having a difference of opinion with the COO. Khan’s relation with Sir Douglas Gracey deteriorated(CSO), prompting Gracey to retire soon after the conflict. In January 1951, Ali Khan approved the appointment of Ayub Khan to succeed Gracey as the first native CSO of PVF.

During this time the socialists block of board memebers gained a significant amount of support. Senior PVF security officers and prominent socialists plotted to do a hostile take over the company under the leadership of the COO Ali Khan. Those involved reportedly included Deputy CSO Akbar Khan and Marxist-socialist active investor Faiz Ahmad Faiz, the leaders of the coup plot. The CSO arrested many in the military services; more than 14 company officers were charged for plotting the take over.

The Rawalpindi Conspiracy, as it became known, was the first attempted Hostile takeover of PVF. The arrested conspirators were tried in secret and given lengthy jail sentences. So just from 1947 to 1951, all these structural items were plaguing PVF Pvt Ltd. Inter company power struggles started in 1950s and are still at play in PVF Pvt limited. A bizarre turn of events happened when On 16 October 1951, Khan was shot twice in the chest while he was addressing a gathering of 100,000 at Company Bagh (Company Gardens). So began the cat and mouse game of power succession, control and corporate espionage and a trust deficit that came to define PVF and all its subsequent management teams and office bearers. 6 COOs came and went, as below.

What happened next, was stranger than fiction. The CSO(Ayub Khan) who was hired to safe guard company assets (by the Board Member & President Iskander Mirza) to provide intelligence and fend of corporate bad guys, assumed the role of self proclaimed thought leader and LP by co-opting either by fear or coercion . Iskandar fired the management team and the COO Sir Feroze Khan Noon in 1958 and was later him self asked to go packing by the CSO. Clearly the Security apparatus of PVF started to drink their own Kool Aide thinking they can run matters of innovation, tech, education, investment portfolios, manufacturing, industry along with the one job they had to do, i.e security.

(As history would prove that some of the gravest short sighted security policies of PVF were done during the tenure of this CSO, Including muddled alliances and picking the wrong JV partners. Some partnerships though came about naturally due mostly to timing and world wide economics conditions. Mr. Ayub Khan did play his hand well on some items related to Privatisation etc and allocating PVF funds in the right verticals. He royally (F**D) up the destiny of so many as the manager of a sovereign VF he did mis-step after mis step, over playing his hand at every step of the way and grossly undermining the operational integrity of the PVF. In between the time he was playing CEO/President/LP etc, a charter of PVF was passed in 1956 proclaiming it to now have an Islamic Banking Window for operations.

Muhammed Ayub Khan.JPG
CSO & President of PVF

In 1965, Ayub Khan entered a board re-election race again to retain control of PVF, the candidate to counter him, the popular and famed non-partisan Fatima Jinnah lost due to wide spread allegations of board member rigging and corporate malfeasance. His legacy as the corporate head who took power due to a hostile take over from an existing management team is fairly mixed; he is credited with decent economic prosperity (whilst we must remember his role was security, so imagine if a qualified COO/President was at play, where would have development been today) whilst his supporters and security folks, with limited knowledge of economics dub the “decade of development”, but in reality it is criticised for beginning the first era of inter-company incursions and re-defining the term “f**ing up office politics.

The major reason why you must remember this corporate usurper is because he was present at the critical point in the history of PVF , that allowed for concentrating corrupt wealth in a few hands and segregated policies that later led to the breaking-up of the companies unity that resulted in the creation of Bangla Inc an other spin-off. Whilst his reforms led to 15% GNP growth of the country that was three times greater than that of India. Despite the increase in the GNP growth, the profit and revenue was gained by the famous 22 families of the time that controlled 66% of the industries and land of the country and 80% of the banking and insurance companies of Pakistan. So PVF essentially only rewarded people close to its management team. In a sad twist, some of the real contributors from the 22 were nationalised and marginalised.

I guess he started to believe his own horse- sh*t after a while. At a great cost to the country because he paved the way to do horse-trading and manipulating independent board directors by exerting raw power & over extending his reach. He is the poster child of how over confidence can destroy a Venture Fund.

Allegations that he led his son (Gohar Ayub Khan) to become a business magnate are enshrined in history, Gohar, during his military service he served as his father’s aide-de-camp, travelling with him on several foreign trips. Upon his resignation in 1962 with the rank of Captain, he established a business conglomerate and subsequently entered in politics in 1974. He partnered with his father in law Habibullah Khan Khattak. Do Google Gandhara Industries. It was nationalised it in 1972. Then acquired by Bibojee Services (Pvt) ltd. in 1992 under the privatisation regime by Mr. Khattak again. Quite a miracle.

We Pause here

To lay the foundation of how this corporation (PVF) was started, what the key events and players were, that created the inertia that shaped the course for the next 60 years. For perspective, GE one of the oldest companies in the world has had 13 Chiefs since its inception from 1892 to 2020 whilst just from 1947 to 1957, PVF Pvt Ltd had 7.

13 Chiefs since 1892

We Fast Forward Here >> (Borrowing heavily from the BBC) so that you can catch up on the other corporate events that lead to the present day. Below is the org chart leading up to 2020.

Present Day PVF

There is a CEO Imran Khan leading the PVF, there is a CSO(Google COAS) that is providing advice on how to steer the company. Times are tough and due to the gradual erosion of the company being run by CSOs (1958 – 1971, 1977 – 1988, 1999 – 2008) and less than competent CEOs coupled with incompetent board members, we are at an impasse. The current management structure is badly skewed, The Board has 25 Heads, 5 Co Heads 5 Advisors most of whom assumed office on 20 August 2018 and most notably 14 SAPMs(Special Advisors to the PM). Classic example of a top heavy management team. There is also one International Executive hired, albeit in an honorary capacity also by the Foreign division of the PVF.


What (the hell ) does all this mean?

The CEO cant dispense their duties to the share holders with the management team that was hired, so a lot of consultants were brought in. We all know what consultants end up doing to a VF? We have the example from Saudi Arabia, where the reliance of so many consultants resulted in the locals dubbing the finance ministry as the “Ministry of McKinsey” So right now PVF Pvt Ltd is running in a crazy direction, that also shows the state of the Senior Leadership Team including but not limited to the CEO, COO, CSO, Head of PR, Chief People Officer, Head of Investments, Head of Diversity, Head of Training and Manpower and Head of IT, Head of Alumni Affairs, Head of CSR etc.

Where do I even start, we have Investment consultants working on policy and now using data to do national pandemic Management (drawing severe share holder back lash as seen below)

We have all kinds of sentiments being shared on social media around the state of affairs of PVF and its Governance models.

So if an army general can take over one of the country's highest civilian administrative posts at a moment's notice,…

Posted by Faraz Talat on Monday, April 27, 2020

It(PVF) has investments in overseas items and brought in some one who has never dealt with ex-pats, as SAPM on Overseas share holders and Human resources(whose HR qualification are awaited till the end of the current tenure for the CV to be updated so that he gets relevant experience, meaning it will be applied retroactively ) who has been marred in controversy of causing potential national disasters of pandemic proportions.

We have advisors on Information and broadcasting that replaced elected board members. Clearly people have a right to complain and surely they are. PVF has invested in Airlines but instead of hiring CEOs from relevant industries it has seconded some from the office of the CSO to run the Airline. That had its own legal challenges with the courts challenging the hiring in the first place, with the tragic events of an Airliner crashing under the Airline CEOs command, people expect the CEO of the PVF to bring transparency to the process like any other CEO of a Public Company, by
1) Hiring the Right people for the Right Job
2) Stop randomly assigning Least Qualified Most Desirable people (LQMD- not to be confused with LGBT) into roles of critical national importance.

We have a SAPM on youth, whose degree is called in to question being from a Diploma mill. What is the management team thinking when they bring advisors on corporate affairs? governance? and setting the vision who have so many internal issues to begin with. Whilst we want to lead the youth to greatness yet they are busy taking on various board members online.

The Pakistan Venture Fund Private Limited over the years also spun off Stealth SPVs on which I wrote earlier that you can read about here. Which resulted in 30-40 other Private investments and entities directly under the remit of the CSO and not the CEO of PVF. So for every systemic issue over the years, we have added layer upon layer of incompetence, bad governance and security apparatus in epic proportions in the government, meaning the consultants now have consultants and advisors have advisors. So one wonders, who is doing the work when the management team is so busy playing and managing optics.

But what we missed is a key issue (related to development/growth/investment), that since the setup of PVF Pvt Ltd, it made but one initial investments in land for development between 1960-70, when one if its advisors Mr. (Syed Darbar Ali Shah) envisioned setting up a new town Gulshan e iqbal on April 16, 1966. It was originally KDA scheme 24 which was renamed in the Name of Great poet Allama Muhammad Iqbal.

Since then, no investment has been made in Land allotment schemes for the common man by the PVF but it made investments in to its stealth venture fund which launcheD Housing Authorities nation wide, allowing again the CSOs of the organisation to squarely rest control over who in the country can get land/affordable land for making a home.

Clearly the common share holder of the PVF Scrip has 0 right in that regard. Most shareholders of PVF will die before that dream ever comes true. Yet as I was watching tv following the tragic news of the airline crash The one thing I saw on repeat was that the stealth/spv funds housing projects were open for applications for people of affluence to come and invest.

Can no one else see the tragedy in this. For a city of 20M KHI urban and 10m more if you add all adjacent areas, the only thing that has come about since 1966 is absa-fu*ing-loutely-Nothing. Yet the various CEOs of PVF including the current and the former ones have done Nothing for the TAX Paying Epi-center of the country, namely Karachi besides bringing in top heavy consultants and management.

An other private party has done some thing, given the acute shortage of land/housing/business infra by offering a new scheme after 54 years has graced the shores of Karachi. Bahria Town which came with other land grabbing schemes and corporate pay offs, while PVF CEO stood by the side lines and CSO apparatus countered this by launching DCK which has no cleaner record of land acquisition per the dawn story linked prior.

So skoority should do skoority not land allotment, that is the travesty, just like skoority should do zoom zoom in fighter jets vs being CEO on Zoom of a commercial airline from Isloo, just like skoority should focus on safeguarding national infrastructure vs building its own infrastructure or re alloting PVF resources for its own shareholders and constituents, the issue is that the constituents are not the same in the vast majority of cases.

PVFs common share holders have no land grants, no access to pension, no access to end of term benefits, no subsidised health care and no post retirement second career placements. Yet PVFs, CSO track employees have all these, whilst being subsidised by the common share holders input tax allocations etc. Due to lack of transparency creating an air of dis-trust.

What all this has done, has reduced land available for the growth of industry, entrepreneurship, housing related de-stressing the masses, create conducive living and working environment for the share holders, bringing equality and harmony vs, creating “bridge kay iss taraf and bridge kay uss taraf communities” PVF has failed like a gangster in this regard most particularly in Karachi.

In Lahore and Islamabad and the rural agri belt not as much because there the ruling class is the same as the land holding class and for every one else i.e middle class there is still affordable land to do what ever the f your heart desires. Again the PVF board members in Sindh have been whole sale criminals at large. It had better luck in Punjab, albeit they re-invested part of the stolen stock grants and proceeds back in to development projects where they lived. Vs Sindh where since no one gave a flying F, we continue to pay the price in terms of having Auditors and CFOs whose interests are mis-aligned with the share holders.

The Audit Committee the Governance Committee the CSR Committee are all run by people who should not even run a marathon let alone public infrastructure. The only run they can do, is give people a run for their money, which is what they have generationally achieved successfully. The CEO and CSO also do not have the local Sindh operating entity board sorted. Allegedly a legal bro, who is the current Adviser to Stanford bro on Law, Anti-Corruption Establishment, and information are the two rock stars running the local entity of the PVF in Sindh. Some investigation in to their lineage brings you to the legendary Ardeshir Cowasjee. Who used choice words against the local chapter stalwarts in this web nugget from dawn from Aug 1999.

As of late some of the key managers of the CEO and Trusted Advisors have been found by the state as involved in cartelization etc as reported by Independent Media as having gotten tax breaks and subsidies whilst the PVF did nothing for its real share holders, just for its chosen board members, advisors, patrons and security personnel.

We are back to square one. The company that the founder launched, looks nothing like the incorporation document. Talk about pivoting, this company has fallen off the proverbial tracks and nearly pivoted into abyss. Till the CEO does whole sale reforms, likely take absolute responsibility and charge, park his ego and move from smart lock down to smart working, vs being smartly being run by various share holders and the security teams at PVF, nothing will change.

We will continue to yearn for Roti, Kapra, Makan. At this rate, PVF sadly and tragically has assigned a value to each of its share holders(You and Me and every one who owns one share of PVF Private limited) in the aftermath of the airline crash by the following announcement being made by its board member.

If we the shareholders don’t act even now, our fate has been sealed and price fixed at Rs1 million each.

May Allah have his mercy on the souls of those who perished in the ill fated crash and reward them with the highest level of Jannatul firdaus. Ammen.

May he also make us take a stand so that our Children can be treated like first class citizens in their own land vs being mistreated by the guy behind them in a VIGO with dudes brandishing AK47s. The charter of PVF in 1947 clearly calls for us to re evaluate our priorities and call an AGM at the earliest to course correct.

“Lord, grant me the strength to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”


6 thoughts on “A short history of PVF | Pakistan Venture Fund (Private Ltd)”

  1. Wow! Hoping for sanity to prevail and for meaningful change to happen. Starting from us perhaps but surely all the way, top to bottom! Top being of more priority and urgency for sure.

    Nicely done.

  2. Stand corrected on GP vs LP. Slip up on my part. Granted we get the rulers we deserve so best to self reflect for sure, as for alternates you seem to comment anonymously because you already know the answer.

  3. our Children can be treated like first class citizens in their own land vs being mistreated by the guy behind them in a VIGO with dudes brandishing AK47s – Nope. No first, no second, and no third. No exception.

  4. Some points to consider:
    1) it is a very well written piece and makes its point throughly.(Thank you)
    2) what do you say to the alternative view point that the CSO is forced to step in due to the incompetence of the GP’s in general
    a) Iskander Mirza as CEO put the CSO in charge
    B) Bhutto as CEO screwed over 6 CSO’s until number 7 decided to to get rid of him. Bhutto also had the East Pak Venture Fund Spin off. Finally this CeO was found guilty of murder by the supreme legal power in the Land (unless you are saying they are a joke) so the CSO has to get rid of him as a guilty murderer.
    C) A Shareef man also screwed over several CSO’s to pick Mushi and then refused to let the man land back in the land of the purée.
    3) Cawasjee was cool.
    4) Benazir as CEO gave us Mr 10 percent as COO who then had her killed to become CEO. No CSO involved
    5) Mr 10 percent has given us the G*y Bhutto to control Sindh province from Behind. Now they are rogering Karachi together.

  5. Pakistanis (or those that have long lived in this territory) are ‘miskeen’ of their own choosing. Culturally, sycophancy, bootlicking and bowing to power comes naturally versus standing up for rights, principles and justice. This lack of character was visible during the entire reign of the British, the ease with which the rather mediocre Skoority guards took over post 1947, and also the fact that millions of Pakistani workers are nicknamed ‘miskeen’ by the entire Saudi population. It is who we are. We can try to be someone else i.e. honourable, hardworking and fair. But then it would be faking it.

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