KARACHI: Pakistan Stock Exchange (PSX) has placed Summit Bank Ltd in the defaulters segment, with effect from Friday, January 17, 2020.
In a PSX official notice No. PSX/N-66 dated Jan 16, the exchange said that Summit Bank had failed to hold its Annual General Meeting, and also failed to submit its Annual Audited Accounts for the year ending December 31, 2018.
Under the PSX regulations 5.11.1 (c ) and (d), these two actions may lead to a listed company being put on the defaulter’s segment.
The regulations are reprinted below:
“(c) It has failed to hold its one Annual General Meeting as per law; Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate actions under Regulation 5.11.2(a) and 5.11.2(b).”
“(d) It has failed to submit its annual audited accounts for the immediately preceding financial year as per law; Upon placement of such company on the Defaulters’ Segment, the Exchange shall only initiate actions under Regulation 5.11.2(a) and 5.11.2(b).”
The National Clearing Company of Pakistan Limited (NCCPL) has also said that the bank will be excluded from the list of Securities Lending and Borrowing (SLB) Eligible Securities and Margin Eligible (MF) Eligible Securities.
This is to go into effect from January 17, 2020, as well.
As per Clauses 7A.3.5 and 7B.3.1.4 of the NCCPL Regulations: “Where a Security that has been quoted on the defaulter’s segment of the Exchange and notified to the Company, such Security shall not be eligible for trading in the SLB Market from the date it has been placed on the defaulter segment.”
“Where a Security that have been quoted on the Defaulter segment of the Exchange and notified to the Company, such Security shall not be made available on MF Market from the date it has been placed on the defaulter segment.”
Summit Bank representatives could not be reached for comment regarding this news.
This most recent news is troubling for Summit Bank. The bank has been under increased scrutiny since it was mentioned in relation to the ongoing fake accounts case of 2018, involving former president Asif Ali Zardari and his sister Faryal Talpur.
The fake accounts case involves alleged money laundering worth billions of rupees through 32 bank accounts, which were opened in five banks. Of those accounts, 15 were opened in Summit Bank.
The bank was mentioned frequently in the Joint Investigation Team (JIT) report commissioned by the Supreme Court of Pakistan in 2018.
The JIT report alleged that “kickbacks, land grabbing and large scale misappropriation of public funds” were placed in the fake accounts.
The report also claimed: “In a nutshell, Summit Bank may be termed as a “Front Bank”, also known in local banking circles as “PROJECT WHITE”, raised to serve as money-laundering vehicle.”
The National Accountability Bureau had previously arrested former Summit Bank president Hussain Lowai.