KARACHI: The Pakistan Stock Exchange (PSX) put to an end a months-long tussle with the apex regulator – the Securities and Exchange Commission of Pakistan (SECP) – by electing unopposed seven directors on its board on Wednesday.
The directors were elected on behalf of the PSX shareholders for a period of three years. The election was scheduled to be held at an extraordinary general meeting (EOGM) on April 19.
“Since the number of persons who have offered themselves for election is not more than the number of directors fixed by the board…candidates shall be deemed to have been elected at the said EOGM,” PSX Company Secretary Muhammad Rafique Umer said in a notice.
The seven elected directors were Zhiping Rong, QUE Bo, Yu Huali, Shahnawaz Mahmood, Ahmed Chinoy, Abid Ali Habib and Mohammad Ashraf Bawany.
Earlier, 11 candidates had submitted documents to contest the election on seven seats. The number of candidates fell to seven after two of them withdrew their nomination papers and another two were found ineligible, Umer told The Express Tribune.
Earlier, the PSX dumped the SECP’s ruling to hold fresh elections for the board of directors on February 28, 2018, taking the view the outgoing board was constituted for three years under the Companies Act 2017 and next elections should be held in February 2019.
The apex regulator, however, was of the view that fresh elections were due since the PSX completed its demutualisation process in June 2017 by issuing 20% of its shares to the general public and the outgoing board lacked general public representation on the board.
The election issue became serious to the extent that Adviser to Prime Minister on Finance Miftah Ismail had to intervene last month, who persuaded the PSX (independent directors and stockbrokers) to hold elections as per SECP’s ruling.
PSX company secretary added that the company would soon nominate another 14 candidates, of which the SECP would select seven as its nominated independent directors on the board.
The board would have a total 15 directors including PSX Managing Director Richard Morin.
The formation of the new board will be completed in the first week of May. “The new board will take charge within 15 days after the extraordinary general meeting on April 19,” he said.
A source explained that out of the seven elected directors, four represented the Chinese consortium that had a 40% stake in the PSX. The remaining three represented the stockbrokers and general public that have 40% and 20% stake respectively.
The Chinese consortium won the 40% stake through competitive bidding for Rs8.96 billion (Rs28 per share) under the demutualisation process in January 2017.
With this, the PSX became an international market as the Chinese consortium comprised strategic investors including China’s Shanghai stock exchange and a futures market.
The Chinese consortium has the right to nominate officials on three key positions — the managing director, chief financial officer and chief regulation officer – at the PSX.
The consortium would deploy latest technology and play its role in cross-listing and attracting Chinese investors to the PSX.
Published in The Express Tribune, April 12th, 2018.