At least 36 firms listed at country’s stocks market are facing the front and apex regulators’ action for not paying the annual listing fee and inducting their ordinary shares into the Central Depositary System (CDS).
The regulatory action ranges from suspension of trading in the defaulting companies’ shares to their de-listing from the concerned Exchange.
In recent months, the front regulators from Karachi Stock Exchange (KSE) have quite frequently been moving under Listing Regulation No. 30(1)(2)(b)(c)(e) and (g) due to increasing defaults by the listed firms, specially the small and medium ones.
“Majority of the defaulting companies are of small or medium size which have lost interest in the stocks market which offers little or not incentives to them in terms of present tax and regulatory regime,” said a KSE official, wanting not to be named.
The official proposed that for such firms there should be a “small and medium division” wherein they would have facilities like low capital requirement etc. “The present reformed tax and regulatory framework though suits the big companies it offers little help to small and medium firms to carry huge costs,” the official added.
Monday saw the KSE issuing warning notices to at least 36 companies for their failure to pay listing fee, join the CDS of Central Depository Company and hold the Annual General Meetings for last two consecutive years.
Majority of the defaulting firms are from the textile sector.
The 19 firms put on notice for the nonpayment of listing fee and joining CDS include (Colony) Sarhad Textile Mills, Annoor Textile Mills, Asim Textile Mills, Bela Automotives, Central Forest Products, Dadabhoy Construction Industries, Globe Textile Mills, Hamid Textile Mills, Karim Cotton Mills, Khurshid Spinning Mills, Mehr Dastgir Textile Mills, Morafco Industries, Redco Textiles, S.S.Oil Mill, Saleem Denim Industries, Service Fabrics, Service Textile Industries, Sind Fine Textile Mills and Taj Textile Mills.
Some 16 firms facing the regulators’ ire for not paying the listing fee are: (Colony) Thal Textile Mills, Adil Textile Mills, Brothers Textile Mills, Dadabhoy Cement Industries, Dadabhoy Sack, Data Textiles, Elahi Cotton Mills, Genertech Pakistan, Hajra Textile Mills, First IBL Modaraba, Kohinoor Industries, Kohinoor Power Mills, Mukhtar Textile Mills, Nazir Cotton Mills, Pakistan PVC and Saritow Spinning Mills.
Three of the above Adil Textile, Dadabhoy Sack and Nazir Cotton are those whose CDS eligibility has been revoked by the CDC.
The KSE official said the KSE’s listing fee was nominal ranging from Rs 25,000 to Rs 1 million for big companies like the OGDC and others.
Saleem Sugar Mills is the firm which has got trading in its shares suspended for its failure to hold AGMs for last two consecutive years, pay the annual listing fee since July 1, 1997 and join the CDS.
Having had a 90-day deadline, ending on July 30, theses firms are required to rectify the defaults or face the “necessary action” under the relevant regulations. “It is hereby informed to all concerned that the following companies as a consequence of defaults… have been advised to fulfill the requirements of the said regulations,” warned Muhammad Ghufran, deputy general manager companies affairs at KSE.
