Dear @investinpak, our fund, @47_ventures, has invested millions of dollars in local #startups. Yet, the capital for our latest investment is being held hostage by @MeezanBankLtd for 12 days. Can you help? Details follow... @StateBank_Pak @DRezaBaqir @taidrus @DigitalPak_GoP 1/n
The ordeal started nearly 2 months ago when we decided to re-up our investment in a promising, fast growing health tech startup. While we worked on deal docs, we arranged for a bridge loan (interest-free) for the startup to ensure it kept the operations growing. 2/n
The capital was received by Meezan Bank, Khayanban-e-Jinnah branch Lhr in start of April. Various documents about the loan were requested which were provided swiftly to the branch. After a month, the bank said that the money came from a source that is not an "eligible lender" 3/n
Worst yet, it has been nearly 2 months & the money hasn't even been returned to the sender. The bank is sitting on it. Branch keeps passing the buck to corporate which despite assurances has not sent the money back. Meanwhile, company had to raise local debt to pay its bills. 4/n
Meanwhile, as deal docs for the convertible debt txn were completed, our investment fund disbursed the capital (a large sum of foreign investment coming into a Pakistani entity) on May 17. It was received by Meezan Bank on 19th. It is May 31 today! 5/n
The money has still not been credited to the company's account. The documentation for the deal was requested by the bank which was furnished swiftly. Does the bank not understand the transaction? Is it waiting for exchange rate to move favoribly? Does it not care? 6/n
After constant follow-ups w the bank branch, I wrote via WhatsApp to the bank president. He didn't respond. I have then written to SBP on Sat & await their response. Meanwhile, the startup struggles! Morale of the team is affected. Customers & partners start growing doubts. 7/n
If this was a Singapore company, the money would have been credited the same day as it was received. I know. Been there, done that. If you are serious about attracting investment in the country, please streamline these processes. 8/n
Right now, we are bringing investment capital IN the country and the institutions & processes have brought us to our knees. When we are taking the investment gains back out, what are you gonna do? Jaan lo gai tab? n/n
Quick update. We started getting follow-up calls within hours of the tweet. SBP, Meezan, MoComm, & BOI all got involved. Some friends fwded the msgs to the highest level in SBP & Meezan. Yesterday and today, Meezan bank requested some additional info which was readily provided.
After a quick review of all documents the entire capital amount was credited into Healthwire's account. The return of the loan which was rejected is still pending but the bank has assured it will be done soon also. Thankful to all the friends who intervened & supported us.
But we need to fix the systemic issues here. We shouldn't have to air dirty laundry in public to get institutions to act. No one should have to use influence, or references to get legit things done. Follow processes, regs, KYC/AML etc. They are all important, but do so swiftly.
Startups founders should burn their energy building their companies & chasing their dreams, not dealing w undue stress caused by a taxing "ease of doing business" environment. I am glad SBP, SECP & BOI are proactively working to resolve these challenges.
