Chakwal Spinning Mills Denies Reports of Insider Trading As it Prepares to Launch Cloud Operations

Chakwal Spinning Mills Limited (PSX: CLOUD) has strongly denied the news that its management was involved in inside trading with certain investors and did not disclose all material information regarding the new Technology setup.

The company issued a statement today to clarify its position and refuted claims of any illicit activities during its ongoing transition into the technology sector.

CLOUD said that all significant developments, including the shift in its business focus and rebranding efforts, were transparently communicated to shareholders and relevant regulatory bodies. The company highlighted several key points in this regard:

1. A letter was sent to the Pakistan Stock Exchange (PSX) on August 23, 2024, clarifying the material information announced on January 9, 2024.
2. The board of directors approved the change in the business line to technology and the new name, “Quantum Cloud & AI Technologies Ltd,” during a meeting held on July 12, 2024.
3. The new cloud business plan was shared with all shareholders before the Extraordinary General Meeting (EOGM), and the resolutions adopted during the EOGM on August 2, 2024, which included the approval of the new name and business focus, were posted on the company’s website.
4. The company appointed a new CEO, an expert in cloud and data center technologies, on August 5, 2024, and is actively recruiting additional staff to support its new business direction.
5. An application for the new name and business change was submitted to the Securities and Exchange Commission of Pakistan (SECP) at its Lahore office on August 7, 2024, with all required documentation.

CLOUD also clarified that it had signed a term sheet with an SECP-regulated and registered fund. The company expressed disappointment over what it termed “baseless accusations” linking its management to insider trading, arguing that such claims were made without any substantive evidence and based purely on market speculation.

It bears mentioning that the company will soon be renamed Quantum Cloud & AI Technologies Limited. The company is set to make history by establishing cloud data centers in Pakistan for the first time. Currently, the cloud business in Pakistan is valued at approximately $800 million, but only $50 million of this is managed domestically, leaving a significant gap of $750 million. No multinational companies currently operate in this space within Pakistan. Quantum Cloud aims to fill this void and become the country’s first multi-cloud provider.

Following approval by the Board on July 12, 2024, the company’s shareholders, during an Extraordinary General Meeting (EOGM) on August 2, 2024, approved the change of the company’s name and its primary business focus. The company provided its members with a comprehensive statement of material facts, which included a detailed market analysis, investment overview, revenue projections, and a feasibility summary for the project.