Islamabad, Feb 12: The Appellate Bench of the Securities and Exchange Commission of Pakistan (SECP) has rejected three appeals filed by Security Papers Limited (SPL), National Investment Trust Limited (NITL), and Punjab Provincial Cooperative Bank Limited (PPCBL). These appeals were against an order issued on January 26, 2024, by the SECP’s Director, Adjudication Division.
The ruling classified SPL as a Public Sector Company (PSC) due to its ownership structure and government influence. Consequently, SPL was directed to comply with Section 2(54) of the Companies Act, 2017, and the Public Sector Companies (Corporate Governance) Rules, 2013. SPL contested this decision, arguing that as a publicly listed entity, it should not be subject to regulations governing public sector companies.
NITL and PPCBL also challenged the order, asserting that they are neither owned nor controlled by the federal or provincial governments. They maintained that their shareholding in SPL should not be interpreted as government ownership, thereby preventing SPL from being designated as a PSC.
However, the Bench reviewed SPL’s shareholding structure and reaffirmed that it qualifies as a PSC. A significant portion of SPL’s shares are held by organizations either owned or controlled by federal or provincial authorities. Consequently, SPL must comply not only with stock exchange regulations but also with those applicable to PSCs.
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The Bench highlighted that NITL’s Managing Director is appointed by the federal government. Moreover, Pakistan Reinsurance Company Limited (PRCL) holds a 79% stake under federal government ownership and operates under the Federal Ministry of Commerce. Similarly, 94.65% of PPCBL’s shares are owned by the Punjab government via its Finance Department. Additionally, State Life Insurance Corporation (SLIC), a state-owned entity, has its chairman appointed by the federal government.
Furthermore, Pakistan Security Printing Corporation Limited (PSPCL), a wholly owned subsidiary of the State Bank of Pakistan, has its chairman and deputy chairman positions designated to the Governor and a Deputy Governor of the State Bank, both appointed by the President of Pakistan on federal government recommendations. This confirms PSPCL’s federal government control.
Considering these facts, the Bench concluded that PSPCL, SLIC, NITL, PPCBL, and PRCL fall under the category of “government agencies or statutory bodies.” Their collective shareholding in SPL firmly establishes it as a PSC. As a result, the Bench dismissed the appeals filed by SPL, NITL, and PPCBL, upholding the original order issued by the SECP.
