PIA warned of suspension in shares’ trading on financial non-disclosure

KARACHI: Pakistan Stock Exchange (PSX) on Tuesday warned the PIA to comply with the financial disclosure laws till the mid of the current month to avert suspension of trading in its shares in the capital market.

The stock exchange advised the PIA to rectify the defaults till May 21, 2019 to avoid immediate suspension in the interest of investors.

“Failing which trading in its (PIA) shares shall be suspended w.e.f (with effect from) May 22, 2019,” PSX said in a statement. “Upon failure of the company to rectify its default within seven trading days i.e. by Friday, May 10, 2019, trading in the shares of the company shall be converted to SPOT (T + 0) settlement for the next seven days i.e. till Tuesday, May 21, 2019.”

PSX said Pakistan International Airlines Corporation Limited (PIAA) has failed to hold its annual general meeting for the year ended December 31, 2017.

“Further, the deadline for holding the AGM for the year ended December 31, 2018 is expiring today (Tuesday), which was required to be held within 120 days from the date of closure of financial year i.e. up to April 30, 2019,” the PSX said. “The non-holding of AGM and non-submission of annual audited accounts for two consecutive years attracts action of suspension of trading in its shares.”

The PSX has already placed the loss-making airline in the defaulters segment with effect from October 10, 2018 for its failure to hold AGM and submit annual and audited accounts for the year ended December 31, 2017.

In February, the Public Accounts Committee was told that cumulative losses of PIA swelled to Rs360 billion.

Loss-making state-owned enterprises have been draining on cash resources of the cash-strapped economy. Governments put such public sector enterprises on the privatisation list in the past, but couldn’t make much success due to political resistance in divesting its shares from the organisations that render more than Rs500 billion in annual losses to national exchequer, causing widening of fiscal deficit that exceeded 6.5 percent during the last fiscal year ended June 30, 2018.

The stock exchange places a listed company in the defaulters segment if it has failed to hold its one annual general meeting under a law.

“However, if such company fails to submit its annual accounts for two consecutive years, trading in shares of the company shall be suspended immediately by the exchange and the company shall be given 90 days to rectify the non-compliance, failing which the exchange shall initiate further actions against the company,” PSX said.