ISLAMABAD: The investors/shareholders of the Modaraba Al-Mali (MODAM) shall be offered a choice to nominate and choose one independent director on the Board of the Modaraba Management Company.
Aftab Ahmad Chaudhary, member of the management team told Business Recorder that for the first time modaraba shareholders have been engaged in the management of their modarabas, reflecting increased trust of the company’s management on the shareholders. This proposal shall be included in the agenda of the upcoming annual review meeting of the MODAM, likely to be held during Sep/Oct of this year. Aftab recently concluded the acquisition of BankIslami Modaraba Investments Limited (BIMIL) from BankIslami, along with Atique Ahmad Khan, the leading sponsor of Ghani Global group, which owns already two listed industrial enterprises in the country.
The BIMIL or the modaraba management company shall soon adopt the name of AssetPlex Modaraba Management Limited (AMML).
Aftab stated the vision of the new sponsors was to work for the empowerment, protection and value creation of the shareholders, and the proposal was a step in the same direction. He said that as of now, the fund management industry in Pakistan did not give any voting rights to its investors including the Islamic asset management industry known as the Modarabas. Pakistan is the only country, which has enacted a framework for the Islamic finance eco-system through a special legislation relating to Modarabas.
According to him, one of the reasons for the under-performance of the Modaraba sector in the country is also the exclusion of Modaraba shareholders in the affairs of the Modarabas.
By offering a choice to nominate and elect one independent director, the MODAM shall become the first ever fund in the country to indirectly grant the right of voting to Modaraba share (certificate) holders. Aftab said the move shall go a long way to improve the governance and accountability standards of the Modaraba sector.
He hoped that the proposal shall also improve the level of trust of Modaraba Al-Mali shareholders in the management capability of the modaraba management company. As of now, the BIMIL has only one floating or listed Modaraba, i.e. MODAM; while it has the permission to launch three more modarabas.
These modarabas are named as Modaraba Al-Makatib, Modaraba Al-Souk, and Modaraba Al-Tameer.
As the name suggests, the approved prospectuses of all three new Modarabas, pre-dominantly, focus on the business of real-estate construction, trading and management.
However, according to Aftab, the modaraba management company shall review the scope of the respective prospectuses and shall seek the permission of the SECP to change their scope after evaluating the emerging business landscape.
Copyright Business Recorder, 2021