ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) directed 77 listed companies on the defaulter segments of the three stock exchanges to take immediate steps to rectify defaults relating to the listing regulations of bourses within 14 days.

The directions were issued under Section 100 (b) of the Securities Act 2015.

Various defaults committed by the aforesaid companies include failure to hold two consecutive annual general meetings, failure to pay outstanding annual listing fee, failure to pay penalties imposed or any other dues payable to stock exchanges and failure to join the Central Depository System (CDS).

The move is aimed at enhancing the rights of minority shareholders and promoting a culture of regulatory compliance.

In case of non-compliance with the directions of the SECP, the company or its chief executive and directors of the company shall be liable for action under Section 159 (5) (a) and (c) of the Act which includes penalties of up to Rs100 million in case of an individual and up to Rs200m in case of a company.

The failure to rectify the default can even lead to winding up/liquidation of a company.

The SECP has sought public comments on the Draft Reporting and Disclosure (of Shareholding by Directors, Executive Officers and Substantial Shareholders in Listed Companies) Regulations, 2015.

The draft regulations include the method of calculating tenderable gains, forms of reporting beneficial ownership and gains, if any, made on trading and the timelines in which these reports are to be submitted to the SECP.

Under the Securities Act 2015, the directors, executive officers and substantial shareholders of a listed company are required to submit details of their shareholding in a listed company and the gains made by them within six months on trading of shares of the listed company.

The gain is required to be surrendered to the Federal Consolidated Fund through the SECP.

The draft regulations have been published in the Official Gazette and placed on SECP’s website to seek public comments which can be submitted to the commission by Sept 19, 2015.

Published in Dawn, September 4th, 2015

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