The appellant mentioned above has filed this appeal under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997 (Act') against the order dated November Z6, 2002 (Impugned order') passed by Commissioner (Securities Market) SEC: Brief facts leading to this appeal are that the appellant through its letters dated 15 July, 2002 and 29 July, 2002 applied under section 9(6) of the Securities and Exchange Ordinance, 1969 for de- listing from Lahore Stock Exchange (G) Ltd. ("LSE"). Previously, on 31 January, 2000 the appellant had written to LSE and informed it of the decision to discontinue its membership as a listed Modaraba.
LSE however, refused to accept this decision of the appellant saying that it was not bound to do so and directed the appellant to pay the listing fee. The appellant refused to pay the listing fee and applied to the Commission for de-listing. The matter was heard by Commissioner (SMD) SEC who in the impugned order directed LSE to de-list the appellant from its exchange within fifteen days from the date of approval by the appellant's shareholders. The Commissioner further ordered the appellant to pay the penalties imposed by LSE for violating the provisions of Regulation 21(2) of the Listing Regulations for not providing the required information to LSE. As for the issue of payment of listing fee by the appellant, the Commissioner held that this was a matter to be resolved between the parties.
2. Not being satisfied by the impugned order, the appellant has preferred this appeal before this Bench. The hearing was held 16 April, 2003 when the parties appeared before us and argued the case. Mr. Naveed Altaf Hussain appearing on behalf of the appellant stated that the appellant's appeal against the impugned order of the Commissioner was limited to waiver of the penalties, listing fee and surcharges imposed on it. The Bench inquired from the parties as to whether an appeal under section 33 of the Act could be heard by the Appellate Bench against penalties imposed by a stock exchange for violation of its Listing Regulations. Mr. Amir Masood, Director
(SMD) appearing on behalf of the Commissioner contended that although the penalties were imposed by LSE under the provisions of the Listing Regulations, however it was the Commissioner who ordered the appellant vide the impugned order to pay the penalties. Mr. Naveed Altaf contended that LSE has still not complied with the direction of the Commissioner for de-listing the appellant from its exchange. Mr. Ahmed Hassan Khan appearing on behalf of LSE stated that the reason for not de-listing the appellant was that it had not obtained the approval of its shareholders as directed by the Commissioner in the impugned order. Mr. Amir Masood stated that a clarification was made by the Commissioner in which he directed the appellant to get . a board approval instead of the approval of the shareholders. Mr. Ahmed Hassan Khan stated that LSE was not aware of this clarification and has not received the Board approval of the appellant either. Mr. Amir Masood further stated that the appellant was ordered to pay the penalties as it had unilaterally stopped complying with the requirements of providing information to LSE.
3. We have heard all the parties and we agree with the findings of the Commissioner in the impugned order that there is no justification for forcing the appellant to remain listed on LSE. The representative of LSE has stated before us that LSE has acceded to the direction given by the Commissioner to de-list the appellant and the only reason for not de-listing it was that LSE had not received the Board approval of the management company of the appellant. We direct the appellant to provide requisite approval to LSE upon which LSE should be-list the appellant from its exchange without delay. As for the payment of the listing fee, the appellant is directed to pay the LSE listing fee for the year 2000 amounting to Rs.65,000 only. We do not however agree with the contention of LSE that listing fee for the year 2001 and beyond is also payable to it by the appellant.
On the issue of payment of penalty for violation of B the provisions of Listing Regulations of LSE for not providing information (register of certificate holders) we are of the considered opinion that as the appellant had made its intention of de-listing clear to LSE in year 2000, there remains no justification for imposing any penalties beyond that year. The direction given by the Commissioner to the appellant for payment of penalties imposed by LSE for violation of Regulation 21(2) of the Listing Regulations beyond the year 2000 are hereby set aside.
In the end we would like to show our discontent for the delaying tactics followed by the LSE instead of facilitating the exit by a listed security.
This appeal is disposed of accordingly.