The Islamabad Stock Exchange (ISE) has not yet invited fresh bids for selling the membership seat of the defaulted Mega Securities (Pvt) Limited following an order of National Accountability Bureau (NAB).
Sources told Business Recorder on Saturday that the NAB had issued a restraining order to the ISE that the membership seat, and stuck-up shares of the defaulter unit, would not be sold till final disposal of the case by NAB.
One of the complainants has already approached the Supreme Court of Pakistan to take appropriate action in the case of this stock exchange defaulter. The next hearing of the case will take place in due course of time. The apex court is also monitoring the case and it is being updated regularly by NAB and by the Securities and Exchange Commission of Pakistan (SECP). Keeping in view the NAB's order, the ISE will not invite new bids to sell the seat, sources said.
They said that Mega Securities (Pvt) Limited was declared as defaulter on December 6, 2005 on account of its failure to settle the liabilities of creditors. The dispute among the directors of the company resulted in problems in managing its affairs. The ISE had conducted a system audit of the company in the light of complaints against its directors. The auditors had detected many anomalies in the affairs of the company. The ISE had suspended its membership on completion of all legal formalities and found that the company failed to discharge its obligations towards investors. An opportunity was also granted to company's directors to submit their viewpoint. However, the company failed to respond to the show-cause notice of the exchange. The suspension of membership of this company was done under the Articles of Association of Exchange.
Later, the case was referred to default management committee of the exchange. The committee received 425 claims against the defaulter for Rs 75.64 million. The exchange seized the company's Rawalpindi branch office along with all available record of the defaulter.
The SECP was requested to ask First National Equities to transfer all available shares of the defaulter to ISE, and the directors of the defaulter company were advised to provide required documents to the ISE. Meanwhile, the ISE also requested the SECP to place the names of the directors on the Exit Control List (ECL).
Sources said that the Rawalpindi office of the company was sold at Rs 702,000 and CDC was requested to release the shares of the defaulter company to the ISE.
Out of total claims received, the auditors had verified 440 claims worth Rs 71.72 million. The claimants were paid 15.50 percent pro-rata payment on October 9, 2006 out of available amount and contribution of Rs 2.50 million. Sources added that NAB is co-ordinating with the ISE management for early finalisation of the case.