The wrongdoings of Crescent Standard Investment Bank Limited (CSIBL) would be discussed threadbare at the Company Affairs Committee (CAC) meeting of Karachi Stock Exchange (Guarantee) Limited (KSE) here on May 23.
According to sources, the CAC will seriously take up the report prepared by A F Ferguson & Co, Chartered Accountants, and presented to the Securities and Exchange Commission of Pakistan (SECP).
The KSE had issued a notice to CSIBL regarding financial mismanagement in the bank and had asked its Chief Executive to explain why it failed to communicate to the Exchange about appointment of an audit firm by the SECP for review of the assets and liabilities of the company.
The KSE in a circular sent to members of CAC said that besides the above action, simultaneously, the KSE on April 24 had invited attention of the SECP in the matter with the request to forward the review report of the auditor for its dissemination to market participants.
In response, the SECP, on May 2, directed CSIBL to share the report, under reference, with KSE. The Exchange in its letter of May 3, based on the letter of SECP, again requested CSIBL to provide the report, "that is still awaited". Accordingly, CSIBL was asked by KSE on May 15 to explain reasons for non-submission of the report and, in case "it failed to forward the same within three days", necessary action may be initiated under the Listing Regulations, which may lead to suspension of trading in the shares of CSIBL.
The KSE had received letters from various shareholders and employees highlighting various frauds of CSIBL along with newspaper cuttings and directives/show-cause notice issued to CSIBL for maintaining parallel books of accounts under the head of ''Manage Portfolio''. CSIBL had been directed to cease extending financial facilities to its holding, subsidiary or associated companies.
The KSE circular to members of CAC also points out that CSIBL is being quoted on the Defaulters'' Counter of the Exchange on account of default under Listing Regulation No 32(1)(b) ie, non-declaration of dividend/bonus for five years.
In view of the above, and more particularly to the nature of the case and failure of the company to disseminate the material information to the Exchange and keeping in view the public interest, it is proposed to suspend trading in the shares of the company in exercise of the powers vested in the Exchange under Listing Regulation No 5(2)(iii), subject to the procedure as laid down in Section 9 of the Securities & Exchange Ordinance, 1969.
CSIBL Company Secretary, in his letter of May 18, had informed the KSE that the Ferguson report was currently "in the process of finalisation, and would be fit for dissemination in any manner only after it is finalised by A F Ferguson & Co, and formally approved by the Board of Directors of CSIBL."
The contents of any currently available work-in-progress version (or draft for discussion purposes only) of the Ferguson report would neither be accurate nor complete, and therefore not fit for dissemination to any person or entity, the letter from the Secretary said.
He further said that once the Ferguson report was finalised and approved, "we intend to discuss its contents with the Securities and Exchange Commission of Pakistan and arrange for its dissemination in any manner as may be required under applicable laws, rules and regulations."
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