KARACHI - The SECP has clarified a news item titled United Bank takeover: Small investors denied chance to get profit that appeared in The Nation of Jan 14, saying that transactions involving sale and purchase of shares of listed companies do not require the SECPs approval, says a Press release. Accordingly, it is the responsibility of the acquirers, in case of acquisitions of shares of listed companies, wherein provisions of the Listed Companies (Substantial Acquisition and Takeovers) Ordinance, 2002 (Takeover Ordinance) are attracted, to ensure compliance of its mandatory provisions. In this particular case, the acquirers had approached the SECP with the facts of the proposed transaction. While examining the information provided to it, the SECP had concurred with the view of Bestway Holding Ltd. that the mandatory provisions of Section 6 of the Takeover Ordinance are not attracted. The facts stated before the SECP included that the consortium comprising of Bestway and Abu Dhabi Group intend to undertake an internal restructuring of the UBL shares, held within the consortium, without effecting any change in control of UBL and that all the other terms of the consortium arrangement will remain intact. There shall be no change in the existing cumulative shareholding of the consortium. Acting in concert, the Bestway and Abu Dhabi Group, acquired shares in UBL and its control through the Privatization Commission in 2002. Since that time the consortium has the control and management of the UBL while holding 61.37pc of its paid-up capital. Other than the consortium the Govt of Pakistan, through State Bank of Pakistan, with 19.76% has the largest stake in the UBLs equity. Meanwhile, the staff reporter stands by the story. The stance taken in SECPs clarification is a manifestation that SECP is now backing out from its earlier stance, thus putting all responsibility on the acquirers. The UBL purchase agreement has the signatures of both Abu Dhabi Group Consortium and Bestway Group Consortium separately. Experts questioned that how can SECP term this deal as a transaction in between the same consortium while they clearly signed the agreement with two distinct entities/consortiums? The coordinal principal of law & justice is that every order must be a speaking order which means if any order is requiring you for any commission or omission it must clearly state the relevant provisions of law with detail of prevalent facts. However, SECPs letter saying Section 6 shall not attract (Section 6 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002) is not a speaking order as the letter does not give any reason or detail regarding circumstances why the provision of the said law is not attracted as per the SECPs view. Experts said that SECPs haste in issuing the letter approving the transaction within 4 days including two days of weekend at SECP raises further questions. (SECP Letter No. EMD/233/662/05 dated 1st December 2010 giving approval in response of the letter requesting approval dated 26th November 2010 from London) SECPs clarification proves that it was not on solid footing while issuing the said letter as it is admitting that it remains the responsibility of the acquirers to ensure compliance of mandatory provisions. SECP further shirking its responsibility by saying that transactions involving shares of listed companies do not require its approval. Experts questioned that if SECP as a regulator is not looking after the interest of shareholders then who else in the country is? Further, SRO 590/(I)/2009 dated 23rd June 2009 amends the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations 2008 and clearly states at least fifty percent of the remaining voting shares of the target company hence the stance for 38% remaining voting shares is correct for Tender/Public Offer.