This is with reference to the letter of Ayub Khalid Bhatti of Gujranwala addressed to you, which appeared in the Business Recorder, Lahore, on December 23, 2003.
Lahore Stock Exchange (LSE) is a company limited by guarantee. The word "Guarantee" has been misunderstood by Bhatti in relation to the trading and settlement of shares through the members of the exchange.
A "guarantee limited company" is a form of company defined in law. The Companies Ordinance, 1984, defines a "Company limited by guarantee" as "a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its winding up." All three stock exchanges in Pakistan are guarantee limited companies.
There is no connotation that the stock exchange guarantees the investment of any broker's clients. We do, however, have a dispute resolution mechanism in place for dealing with the investor claims and as and when we receive any complaint or claim from the investor, we try to deal with it promptly.
Bhatti's case, according to our record, was heard on June 16, 2003. The reason for the delay in payment is due to ongoing litigation involving the concerned defaulter member and their clients.
(Secretary, Lahore Stock Exchange)
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