THIS refers to Circular No.02/2018 dated Feb 9, 2018, of the Securities and Exchange Commission of Pakistan (SECP) regarding the prohibition of gifts to shareholders from companies, or shareholders’ expectation of gifts from companies.

Such circulars and orders have been issued in the past. They constitute an attempt to malign minority and small shareholders and investors who have 500, 1000, 2000 or 5000 shares.

Small shareholders never demand any gifts. It is the companies themselves that offer gifts to shareholders, the simple reason being that these companies do not fulfil their responsibilities towards shareholders and are not following the SECP, Pakistan Stock Exchange, Central Depository Company and National Clearing Company of Pakistan Ltd’s rules and regulations.

If shareholders point out their weaknesses in the annual general meetings (AGMs) and extraordinary general meetings (EOGMs), and the companies cannot satisfy shareholders/ investors, in lieu of this they offer gifts in different forms.

The SECP has also banned the provision of entertainment boxes. This is wrong, since shareholders spend precious time and a lot of money on reaching meeting venues. Companies invite shareholders to attend the AGMs and EOGMs to obtain the approval of their annual financial statements and fulfil other statutory requirements.

We are companies’ guests and according to our Muslim culture, guests are to be entertained. It is my request to the SECP to immediately issue an amendment and allow companies to entertain their shareholders through entertainment boxes or tea, whichever may suit them.

What is the SECP doing about defaulting companies that run away and remain suspended for years, since millions of rupees belonging to small shareholders remain stuck in them? This is the primary duty of the SECP.

Syed Muhammad Ashfaq

Karachi

Published in Dawn, August 18th, 2018