April 26, 2002	Friday	Safar 12, 1423

KARACHI, April 25: Securities and Exchange Commission of Pakistan (SECP) chairman Khalid Mirza on Thursday said those companies which did not like to fall under the ambit of ‘Code of Corporate Governance (CCG)’ would be allowed to delist themselves from the stock exchanges.

He said a committee was being set up to look into the matter and suggest necessary amendments and changes in the CCG, allowing a fair way out for delisting of such companies.

This was stated by the SECP chief during his visit to Aptma where he had to face annoyed textile tycoons, who criticized the Commission for not consulting the industry before finalizing the CCG.

He said the Commission was also going to set up ‘over the counter trading (OTC)’ which would work as a second category listing counter as was being done in the UK. All those companies which opt for delisting would benefit from this counter as they will still enjoy tax benefits allowed to corporate sector.

Disagreeing with the contention of Aptma members that CCG is harsh and it is only going to add to paperwork and has little effect on the efficiency of corporate sector, Khalid Mirza said the existing CCG was highly diluted and its original draft was much harsh which was well appreciated by many from the corporate sector.

Responding to apprehensions raised by Aptma chairman Nadeem Mqabool in his address of welcome that the private companies will also come under the ambit of CCG, Khalid Mirza said, “as long as I am the chairman of SECP this would not happen.”

Feeling the fears and apprehensions of the textile leaders, the SECP chairman said the CCG was not going to over-regulate their activities, but it was just like a ‘good home keeping’, which in no way going to hamper their business and industrial activities.

However, he said since the textile industry was mostly a ‘family affair’ and over 80 to 90 per cent of shareholding was within the group or family it would not be difficult for them to opt for delisting.

While agreeing with the Aptma chairman that textile industry constitutes 40 per cent of listing on stock exchanges, but he said its market capitalization is of only 5.8 per cent and turnover 1.5 per cent.

Except Pakistan and Afghanistan, the SECP chief said, the CCG had been implemented in all the other countries of the region, including Bangladesh, India and Sri Lanka, while Nepal is working to enforce the same.

The SECP chief refuted the general perception and the argument raised by textile leaders present on the occasion that due to over-regulation and lengthy procedures no foreign as well as local investment was forthcoming.

On the contrary, Khalid Mirza said this was only because “we even do not have a reasonable code of good governance in our country for the corporate sector and this makes the investors feel insecure. Similarly, situation developed in the US when law for good governance of corporate sector was first introduced, he added. He said it was the Wall Street which most agitated against such law but other stakeholders stick to their position and ultimately the Senate was approached to bring to an end to the issue.