Chapter 18: Fallout and Fragmentation
The early 2010s brought a hollow silence to the once-bustling corridors of the Dewan Group's headquarters in Karachi's industrial hub. Gone were the days of confident strides and the hum of ambition that echoed from boardrooms filled with executive chatter and strategic planning. In its place stood an empire weathered by overextension, burdened by debt, and riddled with internal disarray.
Dewan Yousuf Farooqui, once hailed as a titan of industry and a visionary in the realms of automotive and textiles, found himself grappling not just with market forces and regulatory constraints, but with a problem far closer to home — the disintegration of unity within the Dewan family and its leadership ranks.
A Fractured Family
The first cracks appeared in 2011, when key executives began quietly exiting their positions amid growing concerns over liquidity and unpaid bank loans. Within the family, disagreements became frequent, often erupting into full-blown arguments during management meetings.
In one such meeting, held in the austere conference room of the Dewan House, tempers flared.
"We've lost control of the narrative," said Sohail Farooqui, Dewan Yousuf's nephew, slamming a financial report onto the table. "The creditors are circling, and we're pretending we still run an empire."
Yousuf, visibly exhausted but not broken, leaned forward. "And what would you suggest? That we fold everything overnight? You weren't here when we built this — when we created jobs for thousands, when we brought Hyundai to Pakistan."
"That was then," interrupted Sadiq Farooqui, another family shareholder. "Now, even the cement plants are idle. We can't even cover electricity bills without restructuring loans. Why are we still pretending everything's under control?"
The tension in the room was palpable. Once united by ambition and a shared surname, the Farooquis were now splintered — driven by competing visions, financial pressure, and mistrust .
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Creditors at the Gates
The tide truly turned when banks began freezing accounts. National Bank of Pakistan, Habib Bank Limited, and a consortium of other financial institutions jointly declared Dewan Group a non-performing borrower, initiating legal proceedings to recover overdue loans totaling over Rs. 40 billion.
It was a dark morning in January 2013 when a formal recovery notice was delivered to Dewan House. The reception staff, unaware of its magnitude, forwarded it to the executive floor. Minutes later, chaos erupted.
"This isn't a routine notice!" barked Shahid Khawaja, the group's Chief Financial Officer. "It's a final call. We've got 30 days to respond or face asset seizure."
Inside the office, Yousuf Farooqui received the news with stony silence. He read the document, then slowly placed it on his desk.
"Call an emergency board meeting. Today. No delays."
By evening, boardroom seats were filled with grim faces — auditors, legal advisors, shareholders, and members of the founding family. PowerPoint slides outlined a nightmare: defaulted loans, negative equity, frozen accounts, pending salaries, and a severe cash flow crisis.
"How did we get here?" asked legal advisor Fawad Arif.
Shahid replied bluntly: "Overleveraging. Aggressive expansions. No buffers for downturns. And now — no trust from financial institutions."
The Media Storm
As news of the financial collapse spread, media outlets pounced. Dawn published a headline:
"From Empire to Embers: Dewan Group's Fall from Grace".
Television programs aired scathing editorials. The group, once a poster child for Pakistan's industrialization, was now a cautionary tale.
On a Geo News panel, veteran journalist Shahzeb Khanzada remarked:
"This was not just mismanagement. It was unchecked ambition. Dewan Group wanted to be everything — automobiles, cement, textiles, sugar, insurance — but ended up mastering none."
Public trust plummeted. Hyundai and Kia, which had once partnered confidently with Dewan Motors, terminated their assembly agreements and began negotiations with Nishat Group and Lucky Motors.
Asset Firesales and Internal Conflict
In a desperate attempt to salvage liquidity, Dewan Group began divesting key assets. Dewan Cement's plants in Hattar and Kamilpur were put up for sale. Negotiations began with Bestway Cement, though the valuation was far lower than hoped.
In a contentious internal meeting, the sale sparked a family feud.
"Selling Dewan Cement is selling the crown jewel!" argued Hashim Farooqui.
"And keeping it means bankruptcy!" countered CFO Shahid Khawaja. "We need cash to meet payroll, or we'll be sued by our own employees!"
Even the once-thriving Dewan Salman Fibres was shut down temporarily in 2014, citing operational constraints. Hundreds of workers protested outside the factory gates in Hub, chanting:
"Humein rozgar chahiye, na ke karz ki kahani!"
(We need employment, not the story of debt!)
The company's brand equity, built over decades, was in tatters.