Pakistan Stock Exchange Limited (PSX) has asked the Securities and Exchange Commission of Pakistan (SECP) to defer the requirement for listed companies to the mandatory provision of electronic-voting options to its members under postal ballot regulations.
The SECP has received the comments of the PSX on the amended Companies (Postal Ballot) Regulations, 2018.
Under the revised regulations, the right to vote through electronic voting facility shall be provided to members of every listed company for all businesses classified as a special business under the Act and in case of election of directors, if the number of persons who offer themselves to be elected is more than the number of directors fixed under subsection (1) of section 159 of the Act.
The PSX stated that considering the fact that a large proportion of shares of listed companies are still held in physical form (for which the requisite particulars such as contact details are not always available), the said requirement may be deferred until such time that the mainstream of shares is converted into the book-entry form, in terms of Section 72 of the Companies Act.
Hence, the listed companies should be facilitated to continue with existing practice to adopt either voting by post or through electronic mode till such time, it added.
Responding to the revised regulations, the Institute of Chartered Accountants of Pakistan (ICAP) opined that the proposed amendment for the listed companies to mandatory provide an e-voting option to its members may be made effective after a transition period of 1-2 years to enable the listed companies to develop the required infrastructure or deploy e-voting solutions for the company’s meetings. The development of an e-voting system by listed companies would require resources and sufficient time.
The Overseas Investors Chamber of Commerce & Industry (OICCI) stated that e-voting and balloting may be allowed to those members who hold an appropriate/significant shareholding.
Merely allowing it, knowing it would have no impact on the results, would not add value to the voting process. The percentage of shareholding may be mentioned in the law clearly.
The SECP responded that e-voting under the postal ballot regulations is already required to be provided to the members of every company subject to the requirements of Sections 143 and 144 of the Act (i.e. where a poll is demanded) and in case of election of directors. Moreover, in the proposed amendment the option of e-voting is further being required where a listed company transacts the particular business.
Therefore, it is considered that the transition period is not required. Moreover, with the proposed amendment, the companies will expedite converting the shares into book entry forms as required.
However, companies shall be required to engage a scrutinizer and the companies are required to appoint a scrutinizer for the meeting that will be held three months after the date of publication of the amending notification. Moreover, the companies in the current legal framework are still required to provide both options for voting to the shareholders, SECP added.
