ISLAMABAD, Sept 4: The Securities and Exchange Commission of Pakistan (SECP) has notified the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2008 after incorporating the comments and suggestions of the public and stakeholders.

The Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 (Takeovers Ordinance) seeks to provide a fair, transparent and efficient system for acquisition of substantial voting shares and takeovers of listed companies in the interest of investors.

Recently, the Takeovers Ordinance was amended through the Finance Act, 2008 and in terms of the newly-inserted section 29A, SECP has been given the power to prescribe regulations for carrying out the purposes of the ordinance.

The regulations have been placed on SECP website.

According to the regulations, a person who is a shareholder of the target company as on the date of closure of public offer shall be eligible to participate in the public offer.

All Global Depository Receipts holders, American Depositary Receipts holders entitled to participate in the public offer as on the date of closure of public offer and convertible security holders shall be eligible to participate in the public offer.

The target company shall immediately, in writing, inform the stock exchange and the SECP:

When a firm intention to acquire control or voting shares of the target company, beyond the thresholds prescribed; when the target company is the subject of rumour and speculation or there is undue movement in its share price and there are reasonable grounds for concluding that it is the potential acquirer’s actions which has led to the situation; or when negotiations or discussions are about to commence to induct people for acquiring control of the target company.

Where a public announcement of intention has been made by the acquirer, the board of directors of the target company shall not till the acquirer withdraws the public announcement of intention:

(a) sell, transfer, or otherwise dispose of or enter into an agreement for sale, transfer, or for disposal of the undertaking or a sizeable part thereof, not being sale or disposal of assets in the ordinary course of business of the target company or its subsidiaries;

(b) encumber any asset of the company or its subsidiary unless otherwise in the ordinary course of business;

(c) issue any right or bonus voting shares;

(d) enter into any material contract; and

(e) appoint an additional director or fill in any casual vacancy on its board of directors occurring during the period.

The public announcement of offer shall be submitted to the Commission along with the document prescribed in schedule VII and a non-refundable processing fee of Rs500,000.