KARACHI: Dewan Mushtaq Group has been fined Rs1 million by the Securities and Exchange Commission of Pakistan (SECP) for violating its rules, besides imposing a ban of three years on the group for selling the freshly acquired 116.176 million shares in Saadi Cement Limited.
Dewan Mushtaq Group has been penalised by the SECP for not making a public announcement before acquisition of majority shares (9 per cent voting shares in Saadi Cement) as it previously did in the case of Pakland Cement Limited.
According to a notification issued by the Karachi Stock Exchange (KSE) on Wednesday, the SECP says: “The acquirers appear to have knowledge that they were required to make a public announcement of the offer under the ordinance as in the case of acquisition of voting shares of Pakland Cement Limited they published an announcement in the press.”
The decision by the SECP says, “the acquirers are directed not to dispose of any of the 116.176 million voting shares of the company acquired by them, directly or indirectly for a period of three years from the date of acquisition without the prior approval of the commission.”
“A collective penalty of Rs1 million is imposed on the acquirers in proportion to the voting shares held/ acquired by them in violation of various provisions of the SECP ordinance,” says the decision.
According to the SECP, Pakland Cement had acquired 80 million shares and was fined Rs688,610; Delta Innovations Limited for 13.876 million shares for Rs119,439; Dewan Mushtaq Motors Private Limited with 8.5 million shares at Rs73,165; Dewan M Yousef Farooqui for 1.17 million shares for Rs10,071; Heena Yousef Farooqui for 0.13 million shares at Rs1,119.
The SECP says that it could have asked Dewan Mushtaq Group to sell all the voting shares in the market, but took a lenient view since the acquirers helped the company in restructuring its debts and inducted fresh funds for its revival. Besides, the share prices have shown an upward trend after the takeover.