Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has issued a formal warning to Miss Arisha Mobeen Jumani, the CEO of Khairpur Sugar Mills Limited, for failing to disclose a significant increase in her shareholding in the company within the required timeframe.

According to a recent order from the SECP’s Adjudication Department, Miss Jumani acquired 484,200 additional voting shares of Khairpur Sugar Mills, raising her total shareholding from 9.99% to 12.97% of the company’s total outstanding shares. These shares were received as a gift from her father, Mr. Muhammad Mubeen Jumani, on January 9, 2024. Despite the nature of the transaction, which is exempt from public offer requirements under Section 109(1)(h)(i) of the Securities Act, 2015, the SECP emphasized the necessity for disclosure.

According to information available from the Pakistan Stock Exchange (PSX), the changes in shareholding were not disclosed within the two-working-day period mandated by Section 109(2) of the Securities Act, 2015, read with regulation 4(1) of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017. The oversight led the SECP to issue a show-cause notice on February 22, 2024, prompting a hearing held on April 18, 2024, where Mr. Ali Lakhani, representing Miss Jumani, acknowledged the error, citing a misunderstanding of the law.

Miss Jumani’s legal representative argued that the oversight was not intentional and submitted the required disclosures on March 14, 2024, following the SECP’s notice. The delay in disclosure, approximately 70 days, was attributed to a legal misinterpretation, and an apology was tendered. The SECP’s order noted that while the family’s significant shareholding in the company might mitigate the impact on other stakeholders, the legal obligation to disclose remained unmet.

The SECP’s decision to issue a warning rather than impose harsher penalties reflects an acknowledgment of the subsequent compliance and the non-willful nature of the oversight. However, the Commission stressed that this order does not preclude further actions should additional compliance issues arise.

The case underscores the critical importance of adhering to disclosure requirements, even in transactions deemed exempt, to ensure transparency and maintain market integrity.