KSE expels 18 companies on AGM default
KARACHI: The Karachi Stock Exchange (KSE) has decided to delist 18 listed companies for not holding annual general meetings (AGMs) for more than two years and non-payment of dues despite repeated reminders.
According to KSE announcement here Tuesday, the cases of these companies have also been forwarded to the Securities & Exchange Commission of Pakistan for initiating necessary action against the management/companies under the provisions of the Companies Ordinance, 1984.
At the same time, KSE has decided that in future, no company associated to these defaulted companies, will be allowed listing at the stock exchange.
They are Accord Textiles, Amin Spinning Mills, AMZ Ventures, Dadabhoy Insurance, Fawad Textiles, First Islamic Modaraba, Harum Textiles, Indus Fruit Products, Ittefaq Textile Mills, Kashmir Polytex, MacDonald Layton, Mian Muhammad Sugar Mills, Mubarik Dairies, Sahrish, Textile Mills, Shahpur Textile Mills, The Ittefaq General Insurance, The Union Insurance and Zahur Textile Mills.
It may be noted that the Exchange had initiated action against the non-compliant companies, which have been in default of various provisions of the Listing Regulations particularly non-holding of Annual General Meeting for more than two years and non-payment of the dues of the Exchange.
The Exchange had advised these companies vide Notices issued on February 10,2012 and February 15, 2012 to rectify these defaults within 90 days in accordance with the Listing Regulations and/or opt for the option of voluntary delisting through buy-back of shares of the minority shareholders by the sponsors/majority shareholders in accordance with the Regulation.
The Exchange also forwarded the copies of the notices to the companies concerned on their addressed available with the Exchange.
On failure of the companies to rectify the defaults within the stipulated time, the Exchange again issued Notice on May 15, 2012 to such companies, allowing further 30 days to rectify the defaults. The companies/management were also notified the action of delisting of companies from the Exchange under the Regulations.
The Notice was also served through the Newspapers on May 17, 2012 providing the companies/management, the opportunity of being heard and /or submitting the objection, if any, to the delisting in writing to the Exchange by June 14, 2012.
It is regretted that the companies failed to respond/rectify the defaults and/or opt for voluntary delisting through buy-back of shares from the minority shareholders.
It may be recalled that these companies being in continuous defaults of the Listing Regulations not only pose a serious threat to the development of capital market but also inhibit the investor confidence through lack of transparency. Such companies have also deprived the minority investors of any return on investment.