Court appoints Nazir to supervise Quice Food EOGM following minority shareholder backlash over 'inflated' merger swap ratio

The Karachi South Civil Court has intervened in the corporate restructuring of Quice Food Industries Limited, ordering strict judicial oversight for the company’s upcoming Extraordinary General Meeting (EOGM) scheduled for June 23, 2026.

The order, issued on June 9, 2026, by 1st Senior Civil Judge Aamir Latif Bhatti, comes in response to a civil lawsuit filed by minority shareholders—including Muhammad Munir Ahmed and Khanani Securities Ltd.—who collectively hold a 20.04% stake in the listed company. The plaintiffs are seeking a permanent injunction against a proposed merger scheme, alleging it severely compromises minority voting and proprietary rights.

The dispute stems from a corporate material disclosure made by Quice Food Industries on May 15, 2026, announcing its board's "in principle" approval of a Scheme of Arrangement to absorb Indus Fruit Products Limited. While Quice is currently a profitable, publicly traded entity, Indus Fruit Products is a financially distressed, unlisted company that was delisted from the stock exchange in 2012.

Legal counsel for the plaintiffs heavily targeted the proposed share-swap ratio, which dictates that 13.66 shares of Quice Food will be issued for every single share of Indus Fruit Products. The plaintiffs have characterised this valuation as "extraordinarily inflated" and "mathematically unfathomable," raising alarms over a massive equity dilution designed to muzzle minority voices. 

The plaintiffs also highlighted a past regulatory order from December 18, 2020, by the Benami Adjudicating Authority involving corporate bank accounts to underscore their apprehensions regarding management transparency.

Judicial Intervention and Corporate Safeguards

While the plaintiffs did not seek to halt the June 23 EOGM entirely, they requested urgent judicial safeguards to protect their statutory right to a fair, transparent voting process.

Evaluating the matter, Judge Aamir Latif Bhatti ruled that the plaintiffs successfully established a prima facie case. The court noted that putting a major restructuring scheme involving massive equity dilution to a vote without transparent valuation metrics threatens to irreparably compromise the proprietary rights of minority shareholders.

To counter potential corporate high-handedness, the court extended ad-interim protection under the following directives:

Restraining Order

The defendants, their directors, and agents are explicitly restrained from conducting the upcoming EOGM in any manner that restricts or precludes the plaintiffs from fully participating, raising objections, and voting their shares.

Appointment of a Nazir

The Nazir of the Court has been appointed to personally attend, witness, and supervise the EOGM proceedings on June 23. The Nazir is mandated to ensure unhindered minority participation and must submit an independent inspection report to the court.

The plaintiffs have been directed to deposit a tentative fee of PKR 30,000 for Nazir's remuneration within three days.

A formal request has been dispatched to the Securities and Exchange Commission of Pakistan (SECP) to depute a designated compliance officer to observe the regulatory transparency of the meeting in tandem with the court-appointed Nazir.

The court has admitted the suit and directed the defendants to file their formal written responses, objections, and counter-affidavits before the next scheduled hearing.