KARACHI, April 16: The Securities and Exchange Commission of Pakistan (Enforcement & Monitoring Division) has directed Pakland Cement Limited and Saadi Cement Limited to transfer and deliver shares lodged with the companies within 30 days.

Separate directives issued to both the companies and their directors by the EMD wing of the SECP under section 472 of the Companies Ordinance, 1984 noted that it was the requirement of law that every company should within 45 days after the application for registration of transfer of any such shares, complete and have ready for delivery the certificate of shares, transferred.

SECP said that provision to Sub-section (1) of Section 74 of the Ordinance provided that the company should within five days after an application was made for the registration of the transfer of any shares, debentures or debenture stock to a central depository, register such transfer in the name of the central depository.

KSE had represented to the Commission that both companies were not transferring shares purchased by several investors through KSE. The Commission also observed that the Sindh High Court, Karachi, in its judgment dated December 14, 1998 had clearly indicated: “It is apparent that they (the Companies) are bound to transfer the shares, valid transfer deeds for which are lodged with them”. It said that the appeal filed by companies against the aforesaid judgment had been dismissed by the Division Bench of the Sindh high Court on November 28, 2001.

The contention of the companies, which the Commission said it had been informed about, was that they had constituted a Commission of Enquiry, comprising an Advocate and a Chartered Accountant, to determine bona fide purchasers of the share lodged for transfer. The SECP said: “The judgment of the Sindh High Court did not require the company to constitute any Enquiry Commission to determine bona fide purchasers of shares”. It also said that in spite of several reminders the companies had not sent report of the enquiry commission after a lapse of considerable time. “It appears to the Commission that the companies are deliberately and intentionally delaying the transfer of shares in spite of clear directions of the Sindh High Court”, SECP said, and directed the companies under provisions of Section 472 of the Ordinance to transfer and deliver shares lodged with the company within 30 days of the date of SECP (E&MD) notice.

The KSE quotations sheet shows that Pakland Cement has a total of 82.5 million outstanding shares, each of the face value of Rs10 now quoting at a discount of around 50 per cent. Saadi Cement has even a larger paid-up capital of Rs1,850 million with 185 million outstanding shares of Rs10 each currently priced at Rs3.70.

The Annexures provided with the SECP notice shows total of 2.626 million shares of Pakland Cement and 2.330 million shares in Saadi Cement, that the companies are alleged to have refused to transfer. These account for 3.3 per cent of the Pakland equity and just about 1.3 per cent of the total outstanding shares in Saadi Cement. Noticeably, bulk of those shares are shown to be held by members (stock brokers) on their own account or on account of clients.