I request the SECP, State Bank of Pakistan and government of Pakistan to stop the flagrant cheating by multinational companies through IPOs (Initial Public Offering).
For example, Wateen, a company owned by the same UAE based group that owned Warid Telecom and Alfalah Bank, offered its company shares to the public through an IPO conducted via Alfalah Bank in 2010. Each share was sold at Rs10, but after a day the share prices started sliding down.
After a few months the company announced the compulsory buy back of all shares at a much lower rate of Rs4.5 and the subsequent delisting of the shares from the stock exchange. On deeper investigation of Wateen books, it was obvious that Wateen had utilised all its funds to pay the loans of Warid. And the company books had many discrepancies of huge loans taken from private citizens.
But even with all these discrepancies and the clear duplicity of Wateen in stealing the hard earned investment of Pakistanis to pay off the debt of their sister company Warid, the SECP and government of Pakistan allowed this delisting and subsequent buy back of the shares at lower rate because of the fear of annoying the owners of Wateen/Warid, who is a powerful Arab businessman. Now many other companies are also following this tactic and have started IPO of their company shares.
SECP should investigate the Wateen books and delisting. They should also set rules that state that no company can delist their shares in 10 years after offering an IPO. The rules should also state that each IPO company should also have insurance against the reduction of shares prices for its investors in the first five years.
ENGR SHAHRYAR KHAN BASEER
Peshawar