To provide relief to the minority shareholders, the Securities and Exchange Commission of Pakistan (SECP) has directed the defaulter companies to comply with the required regulations.
Earlier on September 1, 2015, SECP issued Directions under Section 100 of the Securities Act, 2015 to 77 companies on defaulter segments of Karachi Stock Exchange (KSE), Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE), to take immediate steps to undo the default of aforesaid listing regulations.
As a result of the Directions, 9 companies reported their compliance with the said directions of the Commission, and 6 of these have been restored on the normal counter(s). The restoration of trading of shares of companies on the stock market will give the investors an opportunity to buy or sell their investments and it will also result in the improved image of the company, apart from giving it access to funds from the capital market.
Meanwhile, in case of unsatisfactory responses from defaulter companies, SECP has issued Show Cause Notices to 38 companies under Section 160 of the Securities Act, 2015 requiring them to explain their non-compliance within 14 days failing which penalties under Section 159(5) (c) (i) and sub-section (8) of the Securities Act, 2015 will be imposed, while SECP taking lenient view in 14 cases has extended compliance timeline while considering Company requests. 19 companies have contested their defaults reported on the LSE, and the matter has been taken up with the Exchange, for its amicable resolution.
The defaults committed by the aforesaid companies included their failure to hold two consecutive annual general meetings (the "AGM"), failure to pay outstanding annual listing fee as well as penalty imposed, or any other dues, payable to stock exchanges or their failure to join Central Depository System (CDS).-PR
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