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Jun 12 - 18, 2000

Approval by SBP must for bank, NBFI

The State Bank has instructed banks and non-bank financial institutions (NBFIs) to seek its prior clearance before appointing a person as chief executive—or as directors against a casual vacancy.

An SBP circular (BPRD no 12) issued on Monday said the move was aimed at preventing "undesirable persons from becoming chief executives and directors."

The circular was issued to all private and privatized banks, investment banks, PICIC, BEL, private sector housing finance companies, discount houses as well as venture capital companies.

"Before appointing a person as the chief executive of the company, prior clearance of the State Bank must be obtained," says the circular. "In respect of existing chief executives, such permission should be obtained before his re-appointment."

The circular says that the request for permission to appoint the chief executive should be accompanied by an affidavit on a prescribed proforma sworn by the person proposed to be appointed as the chief executive.

Similarly before appointing a person to fill a casual vacancy occurring among the directors the person should be required to submit an affidavit on a prescribed proforma.

On the basis of this affidavit and other relevant information the directors of the institution concerned should satisfy themselves that the person to be appointed as a director is not or has not been associated with any illegal activity especially relating to banking business.

They should also satisfy themselves that he has not defaulted on payment to any bank or other financial institution or on taxes—either in his individual capacity or as a proprietor, partner, director or share-holder of a company. Another thing which they should satisfy themselves about is that the person being appointed as a director is not a director of any other bank, investment finance company, venture capital company, housing finance company, leasing company or modaraba.

Universal Leather to invest Rs30m

Universal Leather & Footwear Industries Limited proposes to invest Rs30 million in shares of its associated company, the National Development Leasing Corporation Limited (NDLC).

An Extraordinary General Meeting (ExGM) of the shareholders would be held on June 22 to authorize the chief executive to invest the sum for purchase of shares in NDLC, "at a price not exceeding the price quoted at the Karachi Stock Exchange on the date of transaction". The ExGM is to meet to pass the special resolution for the purpose of compliance with section 208 of the Companies Ordinance, 1984.

With the total outstanding shares at 75.5 million in NDLC, the proposed investment by Universal Leather would amount to six million shares or about 12 per cent of its equity.

OMO

The State Bank on Thursday injected Rs3.80 billion in a liquidity-starved inter-bank money market.

Bankers said the SBP injected the amount by purchasing treasury bills of two weeks to maturity at 7.20 per cent at an open market operation.

They said the OMO had attracted offers worth Rs23.80 billion of which the SBP accepted offers worth Rs3.80 billion only and scrapped the rest. Bankers said as the OMO had coincided with an outflow of Rs3 billion on account of maturity of previously sold bills the net inflow was of only Rs800 million.

BoA sale

The Pakistani subsidiary of Bank of America Corp has agreed to sell its branches to local Union Bank Ltd as part of the US bank's global re-positioning strategy, a joint statement signed by the banks said.

Forex reserves

Gross liquid foreign exchange reserves that stood at $1.27 billion on May 31 fell to $1.22 billion on June 3, according to the latest State Bank statement of foreign exchange. The statement was released on Thursday.

The gross reserves include some $322 million worth of foreign currency deposits of banks placed with the State Bank. This means that the net foreign exchange liquid reserves have come down to $900 million.

NIT open end funds soon

The NIT intends to launch three openended funds in the near future for small investors, its chairman Istaqbal Mehdi said here on Wednesday.

He told newsmen at a luncheon meeting that the top priority of the NIT was to launch a privatization fund to involve small investors in the process of privatization of the public sector units. He said the investors might get an immediate benefit from the privatization of the public sector units but eventually it would bring windfall profits for them.

DFML shares over-subscribed

Dewan Farooque Motors Limited said its share flotation of Rsl85 million had been oversubscribed by Rs41m or 22 per cent.

The automobile manufacturing unit of the Dewan group had made the Initial Public Offering (IPO) on May 29.

Giving the break-up of figures, the company noted that the first three categories i.e., of 500 shares, 2,500 shares and 5,000 shares had been undersubscribed. However, the fourth category of 10,000 shares and multiples thereof had been oversubscribed.

HBL sacks 30 employees in UAE

Habib Bank has relieved 30 of its employees in the UAE from their service in a move to improve efficiency.

Syed Zia ul Hassan Kazmi, the bank's general manager in the UAE, told that these employees had completed more than 20 years' service with the bank.

The bank has given them some extra benefits and also a No Objection Certificate to find another job in the UAE, Kazmi said.