Securities and Exchange Commission of Pakistan (SECP) has issued a circular on Tuesday in which it highlighted Section 242 of the Companies Act, 2017. According to this Section, companies must pay dividend to the shareholders within the specified time and manner.
However, due to some difficulties faced by the companies regarding their compliance with the Section 242, the SECP has allowed a one-time relaxation to the listed companies.
The decision was made following the fact that a number of requests were made by the companies for granting them more time to comply with the provisions of the Act.
The Second provision of Section 242 states that the dividend must only be paid through electronic transfer into the designated bank accounts specified by the shareholders.
The companies are allowed to pay cash dividends to the shareholders using the means which were previously used til October 31, 2017.
The circular said:
“Accordingly, the commission has decided to grant one-time relaxation to all listed companies from the requirement of payment of cash dividend through electronic mode directly into the bank accounts of the shareholders till October 31, 2017”.
SECP has issued orders to the companies regarding the electronic dividend mandate. The companies must approach their shareholders to specify the bank account or other electronic transfer mode details.
The dividend payments shall only be made via electronic mode with effect from November 01, 2017.