The Securities and Exchange Commission of Pakistan (SECP) has notified amendments to the Companies (Further Issue of Shares) Regulations, 2020, regarding the issuance of shares with varying rights and privileges by listed companies.
These amendments, aimed at enhancing corporate governance, ensure that minority shareholders are protected while promoting transparency and effective price discovery. The key changes include:
- Ordinary shares with voting rights must receive the same percentage or ratio of dividend per share.
- The voting power of all ordinary shares, under the principle of ‘one share, one vote,’ shall account for no less than 75% of the total voting power of all shares issued.
- Shares with differing voting rights will be capped at five votes per share.
- Ordinary shares with varying rights must be issued as listed securities.
The changes are designed to align economic benefits, preserve the importance of ordinary shares, and prevent undue concentration of control within companies. The goal is to minimize conflicts of interest and promote equitable governance practices.
The amendments were made after extensive consultations with key stakeholders, including the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), listed companies, and legal professionals. The SECP carefully reviewed the feedback received during the consultation process before finalizing and notifying the changes.
