KARACHI: The ‘divestment committee’ formed by the Securities and Exchange Commission of Pakistan (SECP) has been given six months to sell the strategic 40pc shares that have been lying in the blocked account.
Originally, the stock exchanges had to find a ‘strategic buyer’ that met stringent criteria within 119 days. That period expired in August 2014. The regulator then extended the date to August 2015, but things seemed to have stayed put on the matter.
The SECP has thus put its best foot forward. The divestment committee, which ostensibly replaced the demutualisation committee, would comprise 10 members: four newly elected directors of the exchange, namely Abid Ali Habib, Muhammad Yasin Lakhani, Abdul Majeed Adam and Ahmed Chinoy; and the remaining six from among the capital market experts, including Arif Habib, Najam Ali, Ferozuddin Cassim, Amin Issa Tai, Muhammad Sohail and Shehzad Chamdia.
Although majority of the team ‘divestment’ seems to comprise active members of the exchange, there are several on the list which market believes have been avid supporters of the capital market reforms. There is, therefore, little reason to suspect that the task would not be completed within time.
For genuine reason, the amended rules in the Stock Exchanges (Corporatisation, Demutualisation and Integration) Regulations 2012 provide an extension of three months. But sources familiar with the matter said that the committee has already assured the regulator of completing the work of divestment within the set time limit.
The new regulations introduces the concept of ‘anchor investor’, which could be a financial institution (FI) or strategic investor, who acquires at least 25pc shares of the exchange. In case of a consortium, it could be the leading FI that holds at all times at least 60pc of shares acquired or held by the consortium.
The SECP said in a statement issued earlier: “It is expected that post-integration, the PSX will be able to attract global strategic investors and financial institutions and form technological partnerships, to fulfil the objectives of integration, become a major regional investment hub and play its due role in the development of national economy.”
Published in Dawn, March 3rd, 2016