The early 2000s were a time of both great promise and looming challenges for the Dewan Group. Having successfully established itself across various industries, from cement to automobiles and textiles, the group was perceived as a formidable business empire. However, beneath the surface of rapid expansion and aggressive business strategies, financial troubles began brewing. The burden of debt, coupled with macroeconomic challenges, started weighing heavily on the once-flourishing conglomerate.
### **A Web of Financial Obligations**
Dewan Group had secured substantial loans from various banks to fund its expansion projects. With industries as diverse as automobiles, cement, and textiles under its control, the need for capital was ever-increasing. However, the group's reliance on bank financing came with a steep price.
In a board meeting at the Dewan Group headquarters in Karachi, Dewan Muhammad Yousuf Farooqui sat with his financial advisors and senior executives, including the CFO, Riaz Ahmed, and the Director of Operations, Javed Malik.
**Dewan Yousuf:** *"Gentlemen, our business empire is thriving, but the liquidity constraints are becoming a major issue. We need to restructure our debt before the situation spirals out of control."*
**Riaz Ahmed:** *"Sir, our current liabilities have surpassed Rs. 50 billion. The cement and textile sectors are under pressure due to increased operational costs and declining exports."*
**Javed Malik:** *"The automobile sector is also facing issues. With the downturn in demand and competition from Japanese imports, our production lines at Dewan Farooque Motors are underutilized."*
The room was tense. They knew that without a solid financial strategy, the company would be at risk of defaulting on its obligations.
### **Banks Lose Confidence**
As debt levels rose, banks and financial institutions grew increasingly skeptical about Dewan Group's ability to meet its obligations. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), and several other financial institutions had extended substantial credit to the group. By 2009, several banks had classified Dewan Group's loans as non-performing assets.
A meeting with NBP's senior officials, including the bank's president, took place at their head office in Karachi.
**NBP President:** *"Mr. Dewan, we have supported your group's expansion for years. However, your current financial position is not sustainable. We need concrete plans for repayment."*
**Dewan Yousuf:** *"I understand your concerns, and we are working on restructuring. We have potential investors lined up, and our cement division is still profitable."*
**NBP President:** *"Potential investors won't pay off your loans today. We need assurance that our money is secure."*
With increasing pressure from banks, Dewan Group found itself cornered. The fear of a forced takeover or asset liquidation loomed large.
### **The Fall of Dewan Farooque Motors**
One of the biggest blows to the group came with the decline of Dewan Farooque Motors. Initially, the company had revolutionized Pakistan's automobile industry with its partnerships with Hyundai and Kia. However, due to economic instability and policy changes, the agreements fell apart, leaving the company without production licenses.
In 2010, Dewan Farooque Motors ceased production. Hundreds of employees lost their jobs, and suppliers faced massive unpaid dues. Workers protested outside the factory in Sujawal, demanding unpaid wages.
**Factory Worker:** *"We have families to feed. We worked hard to build this company, and now we are left without salaries for months!"*
**Plant Manager:** *"We are doing everything we can, but without funds, we cannot sustain operations."*
The sight of an empty assembly line, once bustling with activity, symbolized the sharp downfall of one of Pakistan's most promising auto manufacturers.
### **Desperate Measures and Asset Sell-Offs**
With liquidity constraints tightening, the Dewan Group was forced to sell some of its prime assets. Dewan Cement, which had once competed with Lucky Cement and DG Khan Cement, was partially divested.
A high-stakes negotiation took place between Dewan Group executives and potential buyers, including representatives from Bestway Cement.
**Bestway Executive:** *"We are interested in acquiring a controlling stake, but the valuation you're offering is too high given the company's financial distress."*
**Dewan Yousuf:** *"Dewan Cement remains a strong brand. If we restructure our operations, we can still turn it around."*
**Bestway Executive:** *"Time is not on your side. The market is consolidating, and you must act now."*
Reluctantly, Dewan Group began offloading parts of its cement division. Other assets, including land holdings and financial investments, were also liquidated to manage debt obligations.
### **Legal Battles and Family Disputes**
As the crisis deepened, internal disputes within the Dewan family surfaced. Differences over business strategies and asset management led to conflicts.
In 2015, the Securities and Exchange Commission of Pakistan (SECP) and various creditors initiated legal proceedings against the group for non-payment of dues.
The tension within the family was evident during a private meeting at the Dewan residence in Karachi.
**Dewan Family Member:** *"Yousuf Bhai, we need to save what's left. We should focus on stabilizing our core businesses instead of spreading ourselves too thin."*
**Dewan Yousuf:** *"I built this empire from the ground up. I will not let it crumble!"*
**Another Member:** *"But we cannot fight reality. We have to make sacrifices to protect the future."*
These conflicts weakened the group's decision-making process, making it even harder to navigate through the crisis.
### **The Final Blow**
By 2018, Dewan Group had lost its standing as one of Pakistan's leading conglomerates. Multiple divisions were either shut down or sold off. Dewan Cement, Dewan Motors, and Dewan Textile had all been reduced to shadows of their former selves.
The group had once controlled industries that were the backbone of Pakistan's economy. But aggressive expansion, reliance on excessive debt, and political uncertainties led to its downfall.
### **Reflection on a Lost Empire**
In 2020, Dewan Yousuf sat in his office, looking at the framed photos of Dewan Group's golden years. Factories, car dealerships, and thriving businesses that once defined his legacy were now mere memories.
**Dewan Yousuf (to himself):** *"We built something extraordinary. But perhaps, we reached too far, too fast."*
The collapse of Dewan Group serves as a cautionary tale of the risks of unchecked expansion and financial mismanagement. From being a dominant force in multiple industries to struggling for survival, the rise and fall of Dewan Group remains one of Pakistan's most significant business stories.