Though the market participants are pinning hope in the SECP-backed tax reforms recently approved by the Ministry of Finance, the years-old negatives continue to take a heavy toll on the market participants at the volumes-starved Karachi bourse. The fact that the current month, February, alone saw the front regulators at KSE; notifying the shareholders about the proposed or final delisting of at least 50 listed companies is indicative of this.
It was just 13 days back when KSE management had conveyed to the stakeholders at KSE that some 29 companies, mostly from textile sector, were faced with delisting for their default on various listing regulations ranging from non-holding of the Annual General Meetings (AGMs) to non-payment of the listing fee. Almal Securities and Services Limited, Dominion Stock Fund, Harum Textile Mills, Investec Securities, Kashmir Polytex, Nina Industries, Pakistan Industrial and Commercial Leasing, Sahrish Textile Mills, Usman Textile Mills, Union Insurance Company of Pakistan, Dadabhoy Insurance Company, First Islamic Modaraba, Ittefaq General Insurance Company, Ittefaq Textile Mills, Macdonald Layton and Co, Mian Muhammad Sugar Mills and Zahur Textile Mills, were the 17 companies that received final KSE notices on delisting.
In addition, 12 other firms were given a 30-day deadline, which would end on the 12th of next month, to get their defaults rectified or brace for punitive action by the front and apex regulators. These include Accord Textile Limited, Al-Azhar Textile Mills, Al-Qaim Textile Mills, Amin Spinning Mills, Fawad Textile Mills, Hashmi Can Company, Indus Fruit Products, Libaas Textile, Mubarak Dairies Limited, Shahpur Textile Mills, Zahur Cotton Mills and Amz Ventures Limited. The market participants, including members, brokers, investors, listed companies, etc, can often be found complaining that the stocks market, plagued by ill-thought-out tax and regulatory regimes, was no more an attractive place for doing business in the absence of trading volumes that perhaps partly enable the listed firms to pay the Exchange related fees, including that of the listing. Thursday again witnessed KSE declaring that some 21 companies either liquidating or liquidators had been appointed to get them liquidated. The trade in their shares had already been suspended. These firms, include Adil Polypropylene Products, Awan Textile Mills, Bahawalpur Textile Mills, Bela Engineers, Colony Woolen Mills, Crescent Spinning Mills, First Tawakkal Modaraba, Harnai Woolen Mills, Junaid Cotton Mills, Karim Silk Mills, Kausar Paints, Modern Textile Mills, Muslim Ghee Mills, Pak Fiber Industries, Pakistan Dairies Limited, Qayyum Spinning Limited, Saltex Spinning Mills, Sind Alkalls Limited, Tariq Cotton Mills, Tawakkal Limited and Tri-Star Shipping Lines. “The Exchange in the interest of investors’ protection and in pursuance of the Listing Regulations Number 30(1) (d) and Number 30(4) intend to now de-list these companies,” said a notice issued by KSE Thursday. The regulator has, through notice number KSE/N-762, asked the liquidators and the concerned firms to come with their objection, if any, in line with the proposed liquidation of these firms.
Now while the federal government has consented to rationalise the controversial Capital Gains Tax and the market observers have started foreseeing encouraging increase in trading volumes, the market participants, on each and every level, would have to bear the burnt of the past mistakes made by the managements, as well as regulators of the local stocks.
