Karachi: In a significant move to address regulatory non-compliance, the Pakistan Stock Exchange (PSX) has issued compulsory buy-back directives to two companies, Dewan Mushtaq Textile Mills Limited (DMTM) and Huffaz Seamless Pipe Industries Limited (HSPI), following their continued failure to hold Annual General Meetings (AGMs) and provide audited financial statements for the fiscal years ending June 30, 2023, and 2024. This announcement follows the earlier PSX Notice No. PSX/N-1106, dated November 15, 2024, which initially suspended trading activities in the shares of these companies due to these persistent issues.
According to the PSX regulations, the sponsors and majority shareholders of DMTM and HSPI have been given an additional 90-day period, starting from February 17, 2025, to provide all concerned shareholders with the opportunity to sell their shares back to them. The share price will be set by the exchange, as stipulated by Clause 5.14 of the PSX Regulations, and the buy-back must be completed by May 19, 2025.
According to information available from the Pakistan Stock Exchange (PSX), the inability of these companies to meet regulatory requirements has necessitated these compulsory buy-back measures. As per Clause 5.11.3.(e) of the PSX Regulations, the exchange will proceed to delist the companies if the buy-back is successfully completed within the specified timeframe. This decision will be communicated in writing to the Securities and Exchange Commission of Pakistan (SECP).
Should the sponsors or majority shareholders fail to comply with the buy-back directives or rectify the regulatory non-compliances within the given period, the PSX has indicated that it will escalate the matter to the SECP. This could result in the initiation of winding-up proceedings against the companies as outlined under the Companies Act, 2017.
This development underscores PSX’s commitment to enforcing compliance and protecting investor interests in the designated market category. Investors and stakeholders are advised to monitor the situation closely and consider the implications of the buy-back directives on their investment strategies.