KARACHI: The Securities and Exchange Commission of Pakistan (SECP) the apex regulator of capital markets has said that it is “looking into” the recent announcement made by Lucky Cement in which the company informed its shareholders of a joint venture with South Korean carmaker Kia Motors Corporation to assemble cars in Pakistan.
“The whole matter is already in the SECP’s notice, and is being looked into from a regulatory compliance standpoint,” the SECP told The Express Tribune in an emailed statement. The announcement was made public through a notice to the Pakistan Stock Exchange (PSX) on December 8.
South Korea’s Kia to start assembling cars in Pakistan
However, the notice was sent days after Dawn, an English language daily, published a story citing a brokerage house, BIPL Securities, that said Yunus Brothers Group (YBG) – which says Lucky Cement Limited is the flagship company of YBG – was in talks with Kia to set up an assembly plant in the country.
From a regulatory point of view, every listed company is supposed to disseminate any material information, which could affect the company’s share price, immediately to the SECP and the stock exchange.
Lucky Cement was priced at Rs726 on the day the story was published, rallying around 6.9% by the time information was disseminated to the stock exchange and the SECP on December 7.
It opened at Rs776 on the day the notice was sent, increasing by the maximum limit of 5% on December 8 and moving past the Rs814-mark.
Bull run at PSX
Investors have been on a buying spree, accumulating Lucky Cement that has now surged 12.2% since the notice was sent to the PSX on December 8, meaning an overall increase in price of over Rs95 in just four trading days.
It closed at Rs871.64 on December 14, a day when the KSE-100 Index rose 0.71% to reach another record high past the 46,000-point level.
Lucky Cement’s plans
Through the notice, Lucky Cement said that its board of directors has decided to invest Rs12 billion in a car manufacturing business and will set up an associated company for the purpose.
It also announced initiation of due diligence for a possible acquisition of Dewan Cement’s north cement plant and capacity enhancement of its existing grinding unit in Iraq.
Meanwhile, when asked why Lucky Cement did not disseminate the information about Kia talks immediately after the publication of the newspaper’s story, its corporate communications department commented that it “would have been against the law for us to disseminate information before any decision by the board of directors of the company.
SECP says it is ‘looking into’ Lucky Cement’s recent announcement
“The publication of Dawn’s story, and the talks with Kia, were being led by YBG and not Lucky Cement. Lucky Cement did not decide to become part of the same till the board meeting of its members on December 8,” it added.
At the meeting of its board on December 8, it was decided that Lucky Cement would be a part of the Kia project, thus the announcement was made as soon as a decision was finalized by the Board of Directors (BOD) in this regard, the statement from Lucky Cement continued.
The company also clarified neither any of its official spoke to BIPL Securities nor it knows how the brokerage house knew about the ongoing talks between YBG and Kia.
Courtesy : Express Tribune