The Pakistan Stock Exchange (PSX) has tasked sponsors of Dewan Automotive Engineering Limited (PSX: DWAE) to buy back holdings of remaining shareholders at a share price determined by the bourse itself.
Due to continuous non-compliance, the sponsors/majority shareholders of DWAE have been directed vide PSX letter dated September 12, 2023, to provide all the concerned shareholders within a period of 90 days i.e. up to December 11, 2023, an option for selling their shares to them at a price to be fixed by PSX, the Exchange said in a notification.
The regulatory action requested that the auto parts manufacturer conduct a mandatory share buyback following its failure to comply with many rules, including those relating to the payment of penalties, other exchange dues, and listing fees for two years.
Upon completion of the buyback process of shares by sponsors/majority shareholders of DWAE, or failure to comply with the compulsory buyback directions, or failure to rectify the non-compliance(s) within the stipulated time, the Exchange will proceed to delist DWAE. The case of DWAE will be forwarded to the Securities and Exchange Commission of Pakistan for initiating further action as deemed appropriate under the Securities Act, 2015 and the Companies Act, 2017.
This comes despite the company asserting in its most recent quarterly report that it has “rectified the default” and requested that its name be removed from the defaulter’s list.
Pertinently, the company had a net loss of Rs. 44.6 million during the first nine months of 2022-23.
The company’s operations remain halted, indicating the presence of material uncertainty that puts the company’s future in serious doubt.
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