ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has allowed directors and substantial shareholders of the listed companies to obtain right shares after fulfillment of certain conditions.
The SECP has issued SRO 808 (I)/2020 to amend the Companies (Further Issue of Shares) Regulations, 2020.
According to the revised regulations, a listed company may issue right shares at face value or at premium to face value provided the directors and substantial shareholders of the company undertake in writing that they will subscribe the right shares to be offered to them as per their right entitlement or arrange subscription for the same through other people.
The SECP further stated that a listed company issuing right shares must report to the Commission, the securities exchange for public dissemination and disclose in the right offer letter the minimum level of subscription and the factors based on which the minimum level is determined, such as the level of funding required by the listed company. Where the minimum level of subscription is not achieved, the right issue shall be terminated and subscription received shall be immediately returned to all the subscribers or the listed company may enter into an underwriting arrangement to achieve subscription of the remaining/balance shares.
Underwriting arrangements in relation to issuance of right shares is optional and at the discretion of the issuing company, the SECP added.
Copyright Business Recorder, 2020
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