Sultana Siddiqui asks SECP to inquire alleged attempt to takeover Hum Network

HUMNL has called for an investigation into the buying and selling of the company's shares considering how PSX, SECP and HUMNL were kept uninformed regarding the transactions

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KARACHI: President Hum Network Limited (HUMNL) Sultana Siddiqui on Thursday asked the Securities and Exchange Commission of Pakistan (SECP) to inquire about an alleged attempt by a concert of parties to take over HUMNL.

HUMNL following Profit Magazine’s article titled, “Is Sultana Siddiqui about to lose control over Hum TV?”, conducted an audit of its shareholding to assess the likelihood of a takeover.

As a result of the findings, HUMNL wrote a letter of complaint to the SECP regarding the illegal transfer of shares by shareholders of HUMNL. The letter has been undersigned by Sultana Siddiqui, in addition to the public notice to the Pakistan Stock Exchange (PSX) outlining the findings.

Moreover, the company also claims that the transfer of shares are in contrast with Section 29 of the SECP Act and Section 139 of the Securities Act, 2015.

The letter summarizes the details in the public notice issued on the PSX and also mentions that HUMNL had been observing unusual activity in the trade of company’s shares in the stock market, especially in the months of March and April.

The letter states: “…with huge volumes being transacted and/or traded on a daily basis and that such transactions and/or trade of shares have not been reported to the company, the PSX and the SECP.”

Considering the upcoming election of directors, the company expressed its concerns over the buying and selling of HUMNL shares and feels that the voting rights of parties involved should be revoked.

“The share trading and transfer of shares between Aitkenstuart, JS Group, Munaf Ibrahim and the Kingsway Group is also in violation of Section 111 of the Securities Act, 2015. As is obvious from the facts stated above, it is abundantly clear the aforementioned parties are acting in concert with each other with a common objective and purpose of acquisition of voting shares and control of the company,” the letter further reads.

In addition, HUMNL has called for an investigation into the buying and selling of shares by the concerned parties considering how they did not inform the PSX, SECP and HUMNL as per the SECP’s regulations.

Who is trying to takeover HUMNL?

As per HUMNL, Aitikenstuart is solely owned by OBS Healthcare Pvt Ltd and is the holding company of AGP Limited, a listed company. The company comes under the umbrella of OBS Group, headed by Tariq M Khan.

As per the letter, OBS and JS Group have a history of business connection. The letter cites excerpts of JS Bank’s annual report for the year 2015 and a testimonial by Khan.

Moreover, HUMNL points out that AGP’s initial public offering was undertaken by JS Global Capital Limited as a consultant to the Issue. In addition, Kamran Mirza, who accumulated HUMNL’s shares for Aitkenstuart has served as the executive vice president and the head of investment banking group with JS Bank.

Kingsway Fund Frontier Consumer Franchises EXTOBA is registered with the US Security and Exchange Commission and was incorporated in the state of Luxembourg. Kingsway Capital operates in London, however, details of its owners and functioning are not disclosed on its website.

The letter implies that Munaf Ibrahim and Cedar Capital are connected. However, as per Cedar Capital’s website, Munaf Ibrahim does not run it. While Ibrahim is currently in the USA, all transactions conducted by him in HUMNL’s case, however, have been through Cedar Capital serving as his broker.

“Ibrahim has been a longtime employee of JS Group and has served in various capacities,” writes Siddiqui.

Voting rights and elections of directors

HUMNL feels that due to this information being made public, Aitkenstuart Pakistan (Private) Limited, JS Bank Limited, Munaf Ibrahim and Kingsway Extoba should be restricted from exercising their voting rights in view of the voting shares acquired between the period January, 2020, to June, 2020, under Section 272(1), read with, Section 272(2) (c), Companies Act, 2017.

Moreover, out of the 15 notices of intention to contest elections as a director of the company that is to be held on the August 22, 2020; HUMNL finds eight of them to be ineligible to contest citing Regulation 11(1) and (3), PEMRA Regulations 2012, and the recent directions issued by the Pakistan Electronic Media Regulatory Authority to the company.

As per HUMNL, the seven directors that are eligible to contest are the current Chief Executive Officer Duraid Qureshi, Sultana Siddiqui, Mazhar ul Haq Siddiqui, Ayaz Dawood, Khush Bakht Shujaat, Mehtab Akbar Rashidi, and Muhammad Ayub. Muhammad Ayub and Ayaz Dawood have offered themselves as independent directors.

“I have met JS, Kingsway, and Duraid himself, and that does not render me ineligible to contest as a director at HUMNL. I am currently serving as a director in several other companies that have little or nothing to do with the JS group. Therefore I find it preposterous that HUMNL made me ineligible to contest for this office.” says one of the ineligible directors choosing to remain anonymous.

“They are depriving minority shareholders of their rights protected under the law. Nowhere does it state that you need substantial holding to stand for election.”

4 COMMENTS

  1. There is always a remedy available to every issue in corporate law. Current companies laws are comprehensive to protect legal rights. Always seek second opinion before a decision.

  2. As a small investor I would be in favour of change of management as I bought hum’s 24500 shares and kept them for more than three years, being a retired person, in a hope to get dividends but to my entire disappointment I didn’t get a single peny and ultimately I sold them out. The present Sultana Apa’s management is interested in earning money and enjoying for their own benefit.

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