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• The family migrated to Karachi soon after partition.
• every successful Pakistani business has had ties with
some pre-partition trading community. Memons,
Bhoras, Khoja Ismailis and Isnasheris, Chiniotis and
Punjabi Sheikhs.
• Dewans belonged to none. They came from India’s east
Punjab region of Patiala.
FROM PATIALA TO HARIPUR
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• Its believed a curse followed dewans as every success was
followed by tragedy.
• Dewan Khalid, the eldest son, died after a brief illness in 1958.
• Dewan Mushtaq himself did not live to see the family’s first
factory and passed away in 1968.
• Dewan Mushtaq’s wife, their second youngest son Noman, 30
and a daughter were on their way with some other family
members when the car crashed on the highway. The three of
them were killed.
CURSE THAT RUN IN FAMILY
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6. Dewan Umar Farooque
• he was 36 year old by the time he
took control of family interest and
business.
• He didn’t complete his studies he
had done only matriculation but
showed a great interest in business.
• major importer of second-hand
clothes and tea within a few years
Dewan Salman
• Was younger brother of dewan umar
and helped dewan umar in
eastablishing textile spinning units
in Kotri and Hyderabad.
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7. DEWAN BUSINESS RISE OF AN
EMPIRE
F i r s t s h o p
• in 1948 Dewan Mushtaq Sons, housed in a small shop at the North
Napier Road.
• August 7, 1970 Dewan Textile Mills, their first cotton spinning unit, was
held in Kotri.
• 1970-1978 textile spinning units in Kotri and Hyderabad.
• Dewan group also owned Pakistan’s largest sugar mills with a
production capacity of 5,000 tons in Thatta.
• DMG to embark on the most ambitious project — the largest polyester
stable fiber (PSF) plant.
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8. DEWAN POLYESTER
STABLE FIBER (PSF)
PLANT.
S a l s a b i l ( l a k e o f
p a r a d i s e )
• located in an isolated place called Hattar.
• spread over 140 acres.
• staff and executive housing colony including a
guest house and bachelors’ hotel.
• labour colony that included a sports centre.
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9. DEWAN POLYESTER
STABLE FIBER (PSF)
PLANT.
D e w a n ’ s d e c a d e o f w a r
• Little over three months after production
commenced, PSF producers called a meeting to
discuss the issue.
• Dewan Umar Farooque was already suffering
from heart complications.
• On April 8, 1992, he flew to Islamabad where
executives of another Lahore-based polyester
company met him at the airport and assured
him that they wouldn’t protest against the tax
exemptions.
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10. DEWAN POLYESTER
STABLE FIBER (PSF)
PLANT.
D e w a n ’ s d e c a d e o f w a r
• But later that day, the entire industry ganged up
against him. He suffered a cardiac arrest during
the meeting, succumbing a few hours later, not
living to see even the first financial statement of
his most cherished achievement.
• sales tax exemption till 1997.
• income tax holiday for nine years from the start
of production
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11. F i r s t b l o w t o
d e w a n s
• DSF’s competitors had won the first battle since they
could offset the tax on polyester fibre against what they
paid on raw material under the tax refund regime.
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12. C o m e b a c k o f
d e w a n s
• Despite the setback Dewan Umar’s eldest son Dewan Ziaur
Rehman decided that another unit would be added with a
capacity of 56,000 tons.
• For this to be done Unit II needed an investment of over
Rs2.5 billion.
• DSF went to international capital markets with Pakistan’s
first and only Euro Convertible Bond issue by a private
company to date.
• Citicorp International and Hong Kong’s Crosby Securities
came forward as underwriter and managers. Barclays, Bears
Stearns, Baring Brothers, Nomura International, Societe
General and others were part that deal.
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13. C o m e b a c k o f
d e w a n s
• Roadshows and meetings were held in Hong Kong, New
York, Boston, Geneva, Zurich and London.
• Bonds were floated on May 5, 1994 with an
overwhelming response from international investors.
The company easily raised $45 million.
• This feat propelled Dewans to the world stage.
• DSF had the second highest capitalisation at the Karachi
Stock Exchange, literally deciding the fate of the daily
index.
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14. S e c o n d u n i t i n
i t s w o r k i n g
• Production at the new unit began on June 15, 1995
following completion of work in a record 12 months.
This took DSF’s overall capacity to 108,500 tons, making
it the largest PSF producer in Asia — even ahead of
India’s Reliance. The unit also enjoyed tax exemption
including the income tax holiday till 2004.
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15. Tu r n o f t h e t i d e
• The noose around DMG’s fibre project was getting
tighter.
• One after another such policies were introduced by
successive governments of Pakistan Peoples Party and
Pakistan Muslim League-Nawaz that sales tax concession
was diluted.
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18. SALES TAX AND EXCISE DUTY
• The sales tax on the PSF was reduced to 10% and excise duty of 5%
was levied instead.
• move was specifically aimed at DSF as it eroded company’s profit.
• Hardest fiscal hit came in the 1996-97 budget as sales tax was imposed
on the textile industry. DSF customers were now asking for a tax
invoice. The company grudgingly relinquished its right to sales tax
exemption.
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“Your company has been methodically persecuted and placed into a
tremendous disadvantage compared to other PSF players,”
the company told shareholders in financial statements of 1995-96.
“All this is being done at the behest of competitors under
the lead of a so-called multinational origin company
which is famous in portraying itself as the most fair,
ethical and professional player,”
Second statement