20000313

KSE board moved

to de-list Crown

Textiles, BEL

RECORDER REPORT

KARACHI: The 'company affairs committee at the Karachi Stock Exchange (KSE) has proposed to its board of directors to de-list Crown Textile Mills Ltd, and suspend trading in Bela Engineers Ltd. as these companies have not paid any dividend/bonus for the past five years.

According to information gathered from the KSE, a meeting of the company affairs committee was held last week which considered the cases of both these companies.

The committee reviewed the accounts of Crown Textile Mills for the period ended September 30, 1998 and made some observations. KSE sources said that Habib Bank had filed two suits against the company for recovery of its over dues of Rs 182.016 million and Rs 45.34 million in the Lahore High Court. The Court granted a decree in the first suit on June 3, 1998 in favour of the Bank. The Court had also passed the orders for the satisfaction of decree and disposal of second suit on December 7, 1998.

The company was not in a position to pay the decreed amount. The bank, therefore, executed the decrees and sold the assets of the company for an amount of Rs 142 million, after fulfilling the legal requirements by inviting sealed tenders.

The company handed over the possession of the mortgaged property (i.e land, building, plant and machinery, furniture, fixtures, stores, spares, vehicles etc), through Habib Bank, to the highest bidder, namely Chenab Fabrics and Processing Mills Limited, at Rs 142 million.

The Court through a certificate of sale of property has also confirmed the date of sale of immoveable properties of the company on March 19, 1999.

In addition to the above, the committee of the KSE noted that "the company is in default under Listing Regulations No. 32 (1) (b) and 34 (3) i.e. non-declaration of dividend/bonus for the last five years and non-payment of annual listing fee of Rs 50,000 for the year 1999-2000. The company, vide its letter dated November 15, 1999 regarding payment of outstanding payment of annual listing fee, informed the Exchange that all the bank accounts of the company have been closed and no assets are left over, therefore no funds are available for payment of fee."

The committee reviewed the accounts of Bela Engineers for the year ended June 30, 1999 and made observations that the High Court of Sindh has granted decree amounting to Rs 68.6 million and Rs 14.2 million in favour of Habib Bank, United Bank and Allied Bank. The directors in their report on the above-referred accounts informed the shareholders that the operation or existence of the company would further deteriorate the financial position. The company is no longer able to continue as a going concern in view of its huge accumulated losses and negative net worth of Rs 159.389 million against the paid-up capital of Rs 34 million and its inability to discharge its liabilities.

The shareholders of the company in the meeting held on January 28, 2000 had unanimously approved filing of petition for windingup of the company in the High Court of Sindh under Section 305 of the Companies Ordinance, 1984. The chief executive of the company has been authorised to make a petition in the High Court under the Companies Ordinance, 1984.

In addition to the above, the committee noted that the company is quoted in the defaulting companies list on account of default under Listing Regulations 32 (1)(b) i.e non declaration of dividend/bonus for over five years.