The government has managed to settle a row between Pakistani investor Sheharyar Chishti and Saudi shareholders in K-Electric (KE), as the latter steps down by giving majority stakes to a Saudi investor.

In a major boost to Saudi-Pakistan investment relations, Prince Mansour Bin Mohammed Al Saud has signed a Memorandum of Understanding (MoU) with Chishti for the acquisition of a majority shareholding in KES Power Ltd, the parent company that owns 66.4% of K-Electric.

Sources told The Express Tribune that Chishti had earlier acquired shares in K-Electric and attempted to take over the company, leading to a legal battle in the Sindh High Court between him and the Saudi shareholders.

According to the sources, the Saudi shareholders had raised the matter several times with the Pakistani government, including during Prime Minister Shehbaz Sharif’s recent visit to the Kingdom. They had also demanded that Chishti disclose the source of funding used to purchase KE shares. Saudi investors reportedly viewed his acquisition as a “coup” and sought his removal from the company.

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“The recent deal between the Saudi investor and Chishti is part of a settlement to remove Chishti from KE,” said a source, adding that Chishti would transfer all his shares to the Saudi investor.

A high-level Saudi delegation is currently in Pakistan, and sources said that the Special Investment Facilitation Council (SIFC) played a key role in brokering the agreement between Chishti and the Saudi investor.

KE, incorporated in 1913 as Karachi Electric Supply Company (KESC), is Pakistan’s only vertically integrated power utility, supplying electricity to Karachi and its adjoining areas.

The majority of its shares, 66.4%, are owned by KES Power, a consortium including Al-Jomaih Power Limited of Saudi Arabia, National Industries Group (Holding) of Kuwait, and KE Holdings (formerly Infrastructure and Growth Capital Fund). The Government of Pakistan holds 24.36%, while the rest are free-float shares.

Earlier, Shanghai Electric Power had abandoned its $1.77 billion plan to acquire KE, citing Pakistan’s regulatory bottlenecks and shifting business environment as major hurdles.

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This latest deal represents the largest Saudi investment in Pakistan’s power sector to date and aims to pave the way for Saudi participation in KE’s management and strategic direction. The agreement also signals Riyadh’s growing confidence in Pakistan’s regulatory and investment climate.

Saudi investors already holding shares in KE had long expressed frustration over tariff-related regulatory challenges. They had been urging the government to address these issues to protect foreign investments.

The leadership of both countries has congratulated the parties on the transaction, describing it as a milestone in advancing bilateral business-to-business (B2B) cooperation and reinforcing Saudi Arabia’s commitment to Pakistan’s energy and infrastructure sectors.

A spokesperson for K-Electric said the company has not received any official communication from its shareholders regarding any impending change.

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The signing ceremony took place in Karachi, hosted by Sindh Chief Minister Syed Murad Ali Shah at the Chief Minister’s House. It was attended by members of the Saudi delegation, senior Pakistani officials, and representatives from the Pakistan Business Council, the Overseas Investors Chamber of Commerce and Industry, and the Saudi Embassy.

The Saudi delegation, led by Prince Mansour bin Mohammed bin Saad Al Saud, Chairman of the Saudi-Pakistan Joint Business Council, said that the Kingdom was prioritising investments in food security, energy, mining, and tourism as part of Riyadh’s broader strategy to integrate with Pakistan’s economy and expand cooperation across key sectors.

“Our leadership in Saudi Arabia has instructed us to be part of Pakistan’s economy,” said the leader of the delegation.

Separately, during the visit, another MoU was signed between K-Electric and Trident Energy, a Saudi-linked entity, to explore collaboration in power generation, renewable energy, and infrastructure development. The agreement is seen as a step towards expanding Saudi participation in Pakistan’s energy sector and fostering long-term investment partnerships in areas of mutual interest.