KARACHI, Feb 22: Share certificates to successful applicants in the secondary offer of the OGDCL have been delivered to 12 bankers to the issue, a senior official in the Privatisation Commission (PC) said on Thursday in reply to a query.

“A notice to this effect will be released in a day or two,” the PC official said.

He observed that stocks in scrip-less form had been deposited directly to subscribers account in the Central Depository Company Limited (CDC).

Small investors who had subscribed Rs55,075 for an application of 500 shares in the Oil and Gas Development Company Limited (OGDCL) were understandably perturbed over the delay in the information leading to the fate of their money.

On Dec 30, 2006, the Privatisation Commission had offered 21.5 million shares for domestic investors from the government holdings in the company, through publication of the offer for sale document (OFSC).

The public offer was made at Rs110 per share (at a premium of Rs100 per share). The retail offer price represented an effective discount of almost three per cent over the price paid by international investors in an earlier sale of 409 million shares in the form of GDRs.

The bid to international investors was made at Rs115 per share. Subscription dates for the domestic retail offering were from Jan 11 to 13.

The PC announced on Jan 22 that the offer had been oversubscribed by 38 per cent and the applications received amounted to Rs3.268 billion against the required sum of Rs2.365 billion.

In total, the number of applications received was 34,758, comprising 33,715 applications for 500 shares and 1,043 applications for over 500 shares.

The government also announced that all applications for 500 shares were to be accommodated and applications of over 500 shares would be allotted on pro rata basis (mostly to institutional investors) according to the method described in the OFSD.

So far so good. But here is where the fault lies: Rule 9 (6) of the Listing Regulations of the Karachi Stock Exchange provides: “The company (issuing shares) shall despatch all share certificates, in marketable lots, within 30 days of the closing of subscription list to all successful applicants under intimation to the exchange”. Listing Regulation (7) of the Exchange stipulates: “Any company which makes default in complying with these regulations shall pay to the exchange a penalty of Rs500 for every day during which the default continues.”

Ostensibly, there has been a delay of 10 days in the despatch of certificates by the PC or the OGDC. The certificates should have been delivered by Feb 12.

The question, therefore, is: who between the two would pay the bourse the hefty fine of Rs5,000.