The mid-2000s in Pakistan's corporate world were marked by a cocktail of ambition, overextension, and global shocks that rattled the very foundation of industrial giants. Among them, the Dewan Group—once celebrated as the embodiment of Pakistani entrepreneurship—stood precariously at the edge of an abyss. What had once been the story of a family weaving its way from textiles into autos, banking, cement, and energy, was now morphing into a tale of crisis, whispered scandals, and intense rivalries that threatened to erase decades of progress.
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Karachi, 2007 – Dewan House, Clifton
The grand marble halls of Dewan House were unusually tense. For years, its walls had witnessed grand celebrations—launches of new plants, gatherings of diplomats, foreign investors sipping tea with executives, and family members announcing fresh ventures. But on this day, the atmosphere was grim.
Dewan Mohammad Yousuf Farooqui, the Group's most visible face, sat at the head of a long walnut table. Papers were scattered before him: debt schedules, bank notices, and press clippings about the "looming financial crisis." Around him sat senior family members, executives, and trusted advisors.
"Gentlemen," Yousuf began, adjusting his cufflinks, his voice firm but tired, "the industry is not what it was when we started. Auto sales are slowing, cement exports are stuck in red tape, and the banks… the banks are circling us like vultures."
Across the table, Suleman Farooqui, an elder cousin who often played the role of cautious skeptic, leaned forward.
"You expanded too fast, Yousuf. Everyone warned you. One day it was Hyundai cars, the next it was cement, then banking. Now we have debts to NBP, HBL, and Bank of Punjab that we cannot roll over. Do you think these bankers will show mercy?"
Yousuf's eyes narrowed. "Suleman bhai, do you think I built this empire to sit small? Pakistan needs industrialists who dream big. Yes, we took risks—but without risks, there is no progress."
From the corner, Tariq Iqbal Khan, the sharp-eyed chairman of the Securities and Exchange Commission of Pakistan (SECP), who had been invited for an "informal chat," spoke in a clipped tone.
"Mr. Dewan, your risks are now systemic. You are not just a businessman anymore; your loans and defaults impact the entire financial system. SECP cannot look away while one of the country's largest groups teeters."
The room fell silent. It was no longer about family ambition; it was about survival.
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Scene Two – The Bankers' Front
At the headquarters of National Bank of Pakistan (NBP), CEO Ali Raza met with his risk management team. The topic: Dewan's overdue obligations.
"Sir," one officer began, sliding across a confidential report, "the Dewan Group owes over Rs. 40 billion collectively to different banks. NBP's exposure alone exceeds Rs. 12 billion. If we don't take aggressive measures, this will spiral."
Ali Raza tapped his pen against the desk. "The government pressures us to keep industries afloat—especially big names like Dewan. But if the group collapses, the blowback will be catastrophic. Already, rumors are spreading of ghost loans, political favoritism, and misuse of working capital."
Another officer added, "Some internal memos suggest that key politicians—particularly allies of the then ruling PML-Q government—leaned on banks to extend Dewan's credit lines beyond rational limits."
Ali Raza's jaw tightened. "So it's true. Politics has infected lending again. Fine. Call a meeting of the consortium lenders. If Dewan sinks, we all must share the losses—or force them into restructuring."
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Scene Three – The Politicians' Game
In Islamabad, corridors of power buzzed with speculation. Shaukat Aziz, the technocrat Prime Minister, was keen on presenting Pakistan as a booming economy. Publicly, he praised industrialists like Yousuf Dewan for "bringing foreign technology and jobs." But privately, concerns were mounting.
In a discreet meeting at the Prime Minister's Secretariat, Shaukat Aziz sat with Finance Minister Salman Shah and senior aides.
Shaukat Aziz spoke first: "Gentlemen, Dewan is not just a group. It is a symbol. If it collapses, investors will question our entire privatization and deregulation drive. We must buy time."
Salman Shah responded cautiously: "But sir, the numbers are ugly. Their auto sales have fallen because imported Japanese cars—thanks to liberalization—flooded the market. Cement demand is erratic, and their banking ventures are bleeding. Even if we pressure state banks to help, it only delays the inevitable."
Another aide whispered, "And sir… Nawaz Sharif's camp is already spreading rumors that the Dewans were favored by Musharraf's regime. If this becomes a political scandal, the press will devour it."
Shaukat Aziz exhaled. "Then we need to control the narrative. Call Geo News and Dawn editors for an off-record briefing. We will highlight Dewan's contributions, not its debts."
It was classic political maneuvering: save the image, regardless of the cracks beneath.
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Scene Four – Media Backlash
But the media was not so easily tamed.
In August 2007, Business Recorder ran a front-page story:
"DEWAN GROUP'S DEBT CRISIS – BANKS UNDER PRESSURE, ECONOMY AT RISK"
The article quoted unnamed bankers alleging that political favoritism had allowed Dewan to borrow beyond prudent limits. It hinted at lobbying by Dewan executives in Rawalpindi and Karachi, and suggested that the group's collapse could rival the infamous Ittefaq Group crisis of the 1990s.
On a live talk show, journalist Talat Hussain grilled a government spokesman:
"Why is the government protecting Dewan Group when thousands of small businesses cannot get a fraction of such loans? Is this not crony capitalism?"
The spokesman stuttered. "Sir, Dewan is… a strategic industry. It provides jobs, exports cement, and assembles cars. If they fall, many sectors will be hit."
But the public mood was shifting. To many Pakistanis, it was another story of the rich being bailed out while the poor suffered rising inflation and unemployment.
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Scene Five – Family Rift
Back in Clifton, tensions within the Dewan family itself boiled over.
One evening, in a heated family meeting, younger brother Dewan Mushtaq slammed the table.
"Yousuf bhai, this empire is collapsing because of your ego. You wanted to compete with Indus Motors, with Lucky Cement, with Habib Bank, all at once. Now, the debts are drowning us."
Yousuf shot back, his face red. "Do you think playing small would have saved us? The world belongs to those who dare. If the banks and politicians had kept their promises, we would not be here!"
Mushtaq retorted, "No, bhai. You tied us too closely to politicians. Today Musharraf is in power, tomorrow he may not be. Then what? Will we survive the storm of political revenge?"
The room went quiet. The truth hung in the air: the Dewan Group's fate was no longer in its own hands.
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Scene Six – Regulators Tighten
By late 2007, the State Bank of Pakistan (SBP) had issued notices to several banks regarding "overexposure" to Dewan entities. Acting Governor Dr. Shamshad Akhtar, a no-nonsense economist, convened a stern meeting.
She looked across the table at senior bankers. "Ladies and gentlemen, this cannot continue. We have seen this story before—the Crescent Group in the '80s, Ittefaq in the '90s. If Dewan defaults massively, it will destabilize our entire credit system. Why were such loans approved?"
A banker mumbled, "Madam, there was… political pressure. The group was considered 'too big to fail.'"
Dr. Shamshad's tone turned icy. "No one is too big to fail. Prepare recovery plans. And if needed, we will involve NAB (National Accountability Bureau)."
The message was clear: regulators were no longer willing to play along.
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Scene Seven – The Global Shock
As if domestic troubles weren't enough, the global financial crisis of 2008 struck. Demand for cement exports collapsed. Auto financing dried up as banks tightened credit. International investors withdrew from emerging markets like Pakistan.
In a grim meeting at Dewan House, Yousuf Dewan read aloud an email from their Dubai office:
"Hyundai has suspended future shipments until outstanding payments are cleared. Dealers in the Gulf are refusing further orders. Cement buyers from India have canceled contracts due to rising border tensions."
Suleman sighed. "This is the endgame, Yousuf. The storm we feared has arrived."
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Scene Eight – Conspiracy Theories
In Karachi's business circles, conspiracy theories swirled. Some claimed rival groups—especially Lucky Cement's Tabba family—had lobbied regulators to tighten the noose on Dewan. Others whispered that Nawaz Sharif's allies wanted to see the group collapse to punish its closeness to Musharraf.
One evening at the Sind Club, two seasoned businessmen debated over tea.
"Mark my words," one said, "the Lucky Group is behind this. They want to dominate cement exports. What better way than to sink Dewan?"
The other shook his head. "No, it's politics. The Sharifs never forgave the Dewans for aligning with Musharraf. This is revenge disguised as regulation."
Perhaps both theories contained grains of truth.
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Epilogue of the Chapter
By the end of 2008, the Dewan Group was battered. Its once-proud empire was drowning in debt, its cars losing market share, its cement factories idle. Banks were dragging them into courts, regulators were circling, and the media painted them as the poster child of crony capitalism.
Yet, in private, Yousuf Dewan still clung to a defiant optimism.
"This is not the end," he told a small group of loyal executives. "Titans stumble, but they rise again. Pakistan still needs us. And as long as I breathe, the Dewan name will not vanish."
The words were bold, but the ground beneath him was shifting fast. For the industry—and the Dewan empire—it was truly a time of turmoil.
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