Sponsors of KASB Bank Limited (KASB) have unconditionally withdrawn writ petition filed against the proposed sale of the Bank in Islamabad High Court. However, the bank said that they are unaware of any change in the company's management. From the last few days several rumours were speculating in the market that sponsors of the bank and SBP have been agreed to resolve the issues outside the court and accordingly sponsors of KASB have withdrawn petition filed against sale of KASB. Another rumour was airing that Chinese investors are intending to invest in KABS to meet the SBP's condition of minimum capital.
After these rumours, the bank's share price and trading volume surged significantly in the equity market during the last two days, forcing the bank's management to clarify the situation. Accordingly KASB Secretary Muhammad Hamidullah on Friday sent a notice to Karachi Stock Exchange (KSE) confirming withdrawal of the petition. However, he claimed that they have not received any directives about future course of action for the bank or management changes.
According to notice, it has been observed that the trading volume and share price of the shares of KASB Bank Limited (the Bank) have increased to a very high level during last two days which is quite unusual considering the past trends of trading volumes and share price, reasons probably being various rumours and speculations under circulation in KSE about the future of the Bank," said the notice.
"In relation to the requirements of section 15D of Securities and Exchange Ordinance, 1969 this is to clarify for the benefit and in the best interest of the investors and all others concerned that the Management of the Bank has not received any directive from any concerned quarters about the future course of action for the Bank or about the management changes that are being speculated and rumoured", it added.
The bank is presently operating under the conditions of the Moratorium imposed on it by the federal government. However, the writ petition filed by the sponsors of the bank at Islamabad High Court has been withdrawn by them unconditionally, the notice revealed. On November 14, 2014, in order to protect the interest of depositors and other stakeholders and due to financial health and other circumstances of the KASB Bank Limited, the federal government, on the application of the State Bank of Pakistan and in exercise of the powers conferred upon it under the Section 47 of the Banking Companies Ordinance, 1962, has placed KASB Bank Ltd. under moratorium for a period of six months for closure of business with effect from November 14, 2014.
The federal government has also directed the SBP to consider reconstruction or amalgamation of the bank as per the provisions of the Banking Companies Ordinance, 1962 within six months. Later, in February, this year, Barrister Aitzaz Ahsan filed the petition in the Islamabad High Court (IHC) on behalf of the sponsors of KASB Bank, praying the court to direct the SBP to involve the owners of the bank in sell-off negotiations. The side petition has been withdrawn by the sponsors. On the petition, IHC granted a stay against the proposed sale of KASB Bank. Sources said that SBP's announcement of the six months moratorium is being completed next month and before that regulator is required to complete its restructuring.