Pre-2004: ‘Lack of space’ reason behind dumping KSE records

Pakistan’s business history to see blank spaces; listed companies’ financial statements to be discarded

KARACHI:

As much as one should try to move on from past mistakes, there are valuable lessons to derive from history — it sets the trend for the time to come.

It is said that a good investment requires one to first browse through the pages of history. This practice has gone on for years as investors, traders, researchers and students have waded their way through the congested II Chundrigarh Road and reached the Karachi Stock Exchange (KSE) for the same purpose.

There, in the basement of the new administrative building, KSE employees in the record-keeping room have kept heaps of historical financial statements of all listed companies – even if they had to be tied between cardboards with shoelaces.

But all that has now changed.

Under a new policy, the KSE management has discarded financial statements for years before 2004. There wasn’t enough space to keep all the record, it says. And, in words of the record keeper, “the gold is lying in a heap somewhere”.

Reaction ensues

Aqeel Karim Dhedhi, chairman of AKD Group, said an attempt would be made to stop the process.

“I seriously fail to see the logic behind this,” said Dhedhi. “I didn’t know they were doing this. But we, the senior members, will definitely try to stop it.

“Even if there was an issue of space, the management could have scanned copies and digitise the record.”

Dhedhi recalled how he would visit the record-keeping room when important investment decisions needed to be taken.

Not just ‘statements’

It was not just a storage room where numbers would rest. It was so much more.

For instance, when Dewan Salman Fiber decided to build a polyester fiber plant in 1989, it not only sent a prospectus to the shareholders, but, alongside, it sent a complete dossier tracking the history of the group and the need for making the investment. All the documents were made a part of the KSE record.

The counter

Whatever the situation maybe, dozens of analysts at various brokerage houses and asset management firms have already compiled all relevant information and investors no longer want to dig into finances themselves, the counter argument goes.

But Arif Habib, chairman of Arif Habib Group, said successful investors tend to complete their homework.

“Knowledge is always more important than funds in these matters,” he said. “Even the assessment of analysts is subject to a particular point of view. The analysis differs from one researcher to another.”

More importantly, Pakistan has never produced any business historians who normally track growth of entrepreneurs and, in doing so, also document the growth of their businesses.

This is one reason that there is no substantial data available on former business empires like the Adamjees, Fancy and Valika. Most of the available books have been sponsored by their respective communities that do not share much about the finances and performance of their businesses.

Published in The Express Tribune, May 29^th, 2015.

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