The consistent delays in the announcement of financial results by Bank of Punjab and its reluctance in holding Annual General Meeting of its shareholders has raised eyebrows and doubts among industry stakeholders.
On 28th March 2018, an application was filed by the management of Bank of Punjab regarding the extension for holding Annual General Meeting in 2018 to the SECP. It’s been almost 2 months since the result season and not a single word has been released regarding the Bank’s result for the year that ended on December 31st 2017.
In a recent stock filing, it was notified that SECP has granted a 30-day extension to the bank i.e. up to 30th May to hold an Annual General Meeting in which the bank will reveal their Annual Audited Accounts for 2017.
Board meetings generally should occur on time and are an important way for the stakeholders to come together to discuss a company’s performance and consider ways to maximize shareholder returns.
Scam Worth of Billions?
Last year when the bank issued the right shares to meet its capital requirements, it was termed as a well-orchestrated move aimed at benefiting a few individuals.
A rights offering is an issue of rights to a company’s existing shareholders that entitles them to buy additional shares directly from the company in proportion to their existing holdings, within a fixed time period.
The BoP decided to issue 70% Right Shares at a price of Rs 12 per share after the SBP asked it to meet capital requirements, which was falling below the statutory limit.
It was claimed that the rights issue was aimed to benefit the underwriters whose number was suddenly increased from two parties to six parties due to the influence of Bank’s top management.
Many of the economic pundits termed it as a pre-planned Rights Issue with an intention to benefit some individuals.
It is reported that Ali Nadeem, who is the minority shareholder of the bank, alleged that the BoP’s President was involved in insider trading, as he made big money by offloading shares before the Bank advertised in the press for seeking consultancy services for the Rights Issue
However, the general public and institutional investors subscribed to only 0.26% of the right shares, which allowed the underwriters to pick all the remaining shares,
The bank’s condition was not hidden from anybody. By the close of year 2016, Rs 16.5 billion worth of non-performing loans remained unprovided for, said an analyst.
By the end of 2018, the bank will have to create provisioning for all non-performing loans
In the past four years, the BoP has issued three right shares to meet the capital requirement after the bank’s equity eroded due to Rs 82 billion non-performing loans in 2008.
The concerned authorities, especially National Accountability Bureau (NAB), State Bank of Pakistan and Security and Exchange Commission of Pakistan, should take notice of the bank’s mysterious move before it’s too late.