Karachi, February 2025
The heavy teak doors of Dewan House's 10th‑floor boardroom were shut, the blinds drawn against the bright winter morning. On the table sat a single folder stamped in red: "Strictly Confidential – Syndicated Loan Proposal – Electric Vehicle Expansion".
Inside the room, Yousuf Dewan sat at the head of the table, hands clasped. Beside him were Batool Qureshi (Group CFO), Ahsan Mehmood (Head of Strategy), and Danish Farooqui (Legal & Compliance). Across the polished surface lay a thick draft term sheet prepared by a consortium led by National Bank of Pakistan (NBP).
But the air was heavy. They all knew the ghosts in that document. This wasn't just a loan application. This was an attempt to walk back into a room they'd been thrown out of fifteen years ago.
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Flashback: 2005–2008 – The Golden Years of Credit
Between 2005 and 2008, Pakistan's corporate debt market was awash with liquidity. Banks were flush from record remittances, and SBP Governor Dr. Shamshad Akhtar had relaxed certain sectoral caps to encourage industrial growth.
For the Dewan Group, it was a perfect storm of opportunity.
Rs 12.2 billion syndicated for Dewan Cement Ltd — led by NBP's Ali Raza, co-financed by HBL's Zakir Mahmood and UBL's Atif Bokhari.
Rs 6.8 billion for Dewan Farooque Motors Ltd — underwritten with the expectation of Hyundai and Kia market dominance.
Rs 4.5 billion in textile and polyester facilities from MCB's Mian Mansha and Meezan Bank's Irfan Siddiqui.
The expansions were real: a 6,700 tonnes-per-day cement line at Hattar, modern looms in Dewan Textile, a sprawling Hyundai assembly plant at Sujawal. But in October 2008, Lehman Brothers collapsed, the rupee nosedived from Rs 62 to Rs 79 per dollar, and Pakistan's political scene descended into post‑Musharraf uncertainty.
Within six months, Dewan Cement's debt servicing was in arrears, Dewan Farooque Motors' plant was idle, and textiles were hit by the global demand slump.
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Leaked Memo – NBP Internal, Dated 14 March 2009
(On cream NBP letterhead, "Confidential" in red)
> To: President & CEO – Mr. Ali Raza
From: Head of Corporate Risk – Southern Region
Subject: Dewan Group – Consolidated Exposure & Recommendation
As of 28 February 2009, total exposure to Dewan Group entities stands at PKR 12.9 billion, of which PKR 8.7 billion is classified as Non-Performing.
Despite multiple requests, no credible repayment schedule has been provided. Group management has indicated reliance on "expected foreign investment" which has not materialised.
Recommendation: Cease further disbursement under any sanctioned but undrawn limits. Initiate joint recovery proceedings with HBL, UBL, and MCB under the syndicated loan agreements.
Signed
M. Khalid Jamil
SVP – Corporate Risk, NBP
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By mid‑2010, the group had negotiated a series of standstill agreements, restructuring principal over 8–10 years. But the stigma stuck. "Dewan" became shorthand in Karachi's credit committees for strategic default.
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Present Day – February 2025: The New Ask
The new project was bold: a $150 million (Rs 42 billion) syndicated facility to expand Dewan Motors into Electric Vehicle (EV) assembly and battery localisation, leveraging their existing Kia network. The plan:
A 20,000-unit annual EV plant at Sujawal.
Lithium battery pack assembly in Port Qasim Industrial Zone.
Supplier park with local SMEs.
The lead arranger was again NBP, now under President Rehmat Ali Hasnie. But the syndicate table looked eerily familiar: HBL, UBL, MCB, Meezan. Many of the same institutions burnt in 2008.
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Boardroom Dialogue – Dewan House, 3 Feb 2025
> Batool: "Term sheet is here. Pricing's KIBOR + 3.75%, seven-year tenor, two-year grace. Collateral: first charge on plant, machinery, and Kia franchise receivables."
Ahsan: "HBL's still not firm. Their credit head told me—off the record—they can't forget 2008."
Yousuf: "We paid our restructured dues, every last rupee."
Danish: "Yes, but in banker memory, reputational write‑downs last longer than the actual write‑downs."
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Leaked Email – HBL Corporate Credit, 28 Jan 2025
(Subject: Dewan Motors – Syndicated Facility)
> From: Farooq Sheikh – Head of Corporate Credit
To: Muhammad Aurangzeb – CEO, HBL
Sir,
We have been approached by NBP to join the arranger group for Dewan Motors EV project. While commercially viable on paper, the sponsor track record remains a concern.
Internal risk review notes:
Historic 2008–10 defaults totalling PKR 3.2B exposure for HBL alone.
Long restructuring period (9 years) with intermittent covenant breaches.
Potential political pressure to participate given GoP's EV policy targets.
Request guidance: join with reduced tranche & tight covenants, or decline outright?
Regards,
Farooq
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The Political Angle
The EV project had backers in Islamabad. Federal Minister for Industries Makhdoom Syed Murtaza Mahmood had touted it as "critical to EV adoption and industrial localisation." Privately, he urged bank CEOs to "look beyond old grudges."
In a side meeting at Serena Hotel, Islamabad:
> Murtaza: "Rehmat sahib, the PM wants this plant operational before elections. It's a jobs story."
Rehmat Hasnie (NBP): "Minister sahib, jobs are important, but so is depositors' money. Our regulator remembers the last time."
Murtaza: "And the last time, the banks recovered. Don't let politics of the past kill industry of the future."
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Media Leak – Dawn Business, 12 Feb 2025
Headline: "Dewan Seeks Rs 42 Billion Loan Amid Bankers' Skepticism"
Excerpt:
> Sources say several banks remain wary due to the group's 2008–10 loan defaults, despite full settlements under restructured terms. Critics call the facility "a loan too far" given sectoral risks in EV adoption.
The leak shook the syndicate talks. UBL pulled back its commitment from Rs 7 billion to Rs 3 billion. MCB demanded a sovereign guarantee.
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Leaked Memo – SBP Banking Policy Dept, 15 Feb 2025
(Marked "For Governor's Review Only")
> Subject: Dewan Motors – Syndicated Loan Assessment
While the project aligns with Pakistan's EV Policy 2020–25, concentration risk is significant. Four of the participating banks were part of the 2008–10 Dewan loan restructurings.
Regulation R‑6 (Single Obligor) limits may require exemptions. Precedent of repeated exemptions to the same corporate group may draw criticism from FATF and IMF review missions.
Recommendation: Advise syndicate to seek additional equity injection from sponsors before disbursement.
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Boardroom Scene – Dewan House, 17 Feb 2025
> Batool: "MCB's now asking for Rs 10 billion equity upfront. That's half our total net cash reserves."
Yousuf: "It's a shakedown. They want us to bleed before they commit."
Ahsan: "Or they genuinely fear default risk. Either way, the politics are ugly. Someone's feeding the press."
Danish: "I traced the Dawn leak. It came from a Gmail account linked to a PR consultant retained by a rival automotive group."
Yousuf (slamming fist): "So it's a hit job. Fine. We'll fight in public."
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The Standoff
By late February, only NBP, Meezan, and a reduced HBL tranche remained. Without UBL and MCB, the facility size fell to Rs 26 billion — too small to fully fund the EV plant.
Emergency Meeting – NBP HQ, Karachi
> Rehmat Hasnie: "We can still proceed if GoP gives partial credit guarantees."
Farooq Sheikh (HBL): "Without that, my board won't clear it."
Irfan Siddiqui (Meezan): "Islamically structured or not, risk is risk. We need political cover."
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Final Twist – Leaked Recovery Plan from 2009
A journalist at Profit Pakistan Today published scanned pages from a 2009 NBP recovery plan that had never been public. One paragraph jumped out:
> "It is unlikely Dewan Group will fully recover operational capacity in the next five years. Any new lending should be treated as high risk with full provisioning from inception." — NBP Risk Committee Minutes, 27 April 2009
The damage was immediate. Social media dubbed the EV loan "Bailout 2.0". Politicians backed away. Even NBP grew cold.
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Collapse of the Deal
On 3 March 2025, NBP formally withdrew as lead arranger, citing "market conditions." Without them, the syndicate dissolved.
Batool's closing words in the boardroom:
> "It wasn't the numbers that killed this deal. It was the memory."
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Question for Readers:
If a company has once defaulted but later fully repaid, should its past still dictate its future? Or do certain financial scars never heal — no matter the repayments, no matter the time passed?