Dividend, entitlements: listed companies must keep KSE advised of BoD decisions: SECP

The Securities and Exchange Commission of Pakistan (SECP) has observed that it is binding on every listed company to keep advised Karachi Stock Exchange (KSE) of all decisions of its Board of Directors (BoD) relating to cash dividend, bonus issue, right issue or any other entitlement or corporate action and any other price sensitive information in the manner notified by KSE from time to time.
While dismissing an appeal filed by a company against the SECP order on Monday, Appellate Bench No III of the Commission comprising SECP Chairman Tahir Mahmood and Commissioner Securities Market Division (SMD) Zafar Abdullah specified that the procedure for filing of financial results has been clearly prescribed by KSE in the Listing Regulations.
The order has disposed of appeal No 34 of 2013 filed under section 33 of Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 06/05/13 (the "Impugned Order") passed by the department.
Under the Listing Regulation of KSE, it is binding for every listed company to advise and keep advised KSE of all decisions of its BoD relating to cash dividend, bonus issue, right issue or any other entitlement or corporate action and any other price sensitive information in the manner notified by KSE from time to time. Every company is required to follow the laid down procedure and the argument of the Appellant's representative that the Company is a small company running in losses with minimal trading in its shares does not relieve the Company of its responsibility. Further, making profit of the information is not an ingredient to prove whether the information was price sensitive or not, the SECP said.
The SECP further said that the company being listed on the KSE is expected to be conversant with the regulatory requirements. Further, listed companies are required to ensure that any disclosure of price sensitive information should be equitable and not in a manner that compromises the investors' confidence or the fairness and transparency of the market.
The tax department has already taken a lenient view in the Impugned Order by imposing a penalty of Rs 25000 on the company only instead of the maximum penalty. In view of the above, we do not find any grounds to interfere with the Impugned Order. The appeal is dismissed with no order as to cost, the Appellate Bench No III order added.