ISLAMABAD, Dec 26: The SECP has directed listed companies to provide adequate information to their shareholders in case of disposal of complete undertakings or their sizable parts.
Under section 196(3)(a) of the Companies Ordinance, 1984, the directors of companies are required to take consent of the shareholders in the general meeting before making a deal to sell, lease, or dispose of undertakings, or their sizable part, and to provide a statement of all material facts concerning the proposed sale or lease or disposal of assets, an official statement issued here on Monday said. “It has been observed that listed companies, while proposing to sell the entire undertaking or parts thereof, do not make adequate and material disclosures to the shareholders,” the statement said.
In addition, some companies have been seeking authorization for sale of entire undertakings without identifying their future course of action.
The SECP is of the view that the disclosure information in the manner prescribed in the said notification would ensure that the shareholders were informed about the decisions and that the transactions were undertaken in a transparent manner to ensure compliance of the relevant provision of the Ordinance in its true spirit. The notification No. S.R.O. 1227(I)/2005, dated December 12, 2005 is available on the SECP website.
