The Securities and Exchange Commission of Pakistan (SECP) has directed K-Electric (KE) not to change the composition of the current board of directors, till further orders of the Commission.
In this regard, the SECP has recently issued a directive to the Chief Executive Officer of the K-Electric.
According to the SECP’s directive, whereas, K-Electric Limited (the target company) is a public limited company and its shares are quoted on the Pakistan Stock Exchange (PSX).
KES Power Limited (KES) is a majority shareholder of the target company holding 18,335,542,678 shares constituting 66.40 percent of the total outstanding voting shares of the target company. It was reported that a large part of the controlling stake in the target company has been acquired by Sage Venture Group Limited (Sage), a British Virgin Islands-registered special purpose company.
The target company made an announcement on PSX dated October 20, 2022, under section 96 and section 131 of the Securities Act, 2015 (the Act) that changes have been consummated involving IGCF General Partner Limited (IGCF GP), being the fund manager, and the Infrastructure and Growth Capital Fund LP (Fund), being the owner of the Fund assets. In particular, controlling interests in IGCF GP and certain limited partnership interests in the Fund have been acquired by Sage, wholly owned by Asia PaK Investments Limited.
The target company made announcements on PSX dated October 20, 2022, and October 24, 2022, respectively that Boudewijn Clemens Wentink, Khaqan Saadullah Khan, and Sadia Khurram have resigned as non-executive directors nominated by KES on the board of the target company.
Subsequent to the aforesaid announcements made by the target company dated October 20, 2022, the SECP (the Commission) sought detailed information from the target company regarding the changes in ownership structure vide letter dated October 26, 2022, to assess the compliance with Part IX of the Act (takeovers), that is awaited as the target company has sought further time to provide the requisite information.
The SECP said that irrespective of the above fact with regard to information sought from the target company, the Commission is responsible for monitoring the compliance of applicable legal provisions with respect to the takeover regime as envisaged under the Act and other laws administered by the Commission to safeguard the interest of investors and the general public.
The resignation of three non-executive directors nominated by KES on the board of the target company subsequent to the announcement made by the target company regarding the acquisition of controlling interests in IGCF GP and limited partnership interests in the Fund by Sage raises suspicions that indirect shareholding of the target company through KES has been changed.
The SECP, in the exercise of powers conferred under section 125 (d) of the Act, hereby, directed the target company that the composition of the current board of directors of the target company shall not be changed, whatsoever, till further orders of the Commission.
This direction is issued with immediate effect and without prejudice to any other action that the Commission may initiate in accordance with applicable laws, the SECP added.
