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CLA directed to decide

Alico shares trading

case by September 15

RIZWAN UR REHMAN RAZI

LAHORE: The Lahore High Court, disposing of a writ petition moved by four small investors of Alico, has referred a copy of the writ petition to the Corporate Law Authority to decide the matter within a month and file a report in this regard to the Deputy Registrar, judicial of the LHC.

The writ petition was moved by four LSE investors, Abdul Razzaq, Mirza Shamim Baig, Mohammad Saleem and Chaudhry Mohammad Ismaeel citing Ministry of Finance, CLA, LSE, KSE and Chief Executive Alico as respondents.

Counsel for the petitioners Chaudhry Masood Ahmed Wahla submitted that 5.395 million shares of Alico, with face value of Rs 10 each, were offered for public issue and the company was formally listed on ready quotation Board on 6.6.95, at LSE.

It was submitted that rates of Alico ranged from Rs 22 to Rs 24 when the first clearing started from 6.6.95 to 12.6.95. But these rates shot up to Rs 42 against the opening rates of Rs 25.25 in a clearing started from 4.7.95 to 11.7.95.

It was further submitted that the shares of Alico were manipulated and cornered in flagrant violation of Security and Exchange Ordinance, 1969. This malpractice was resorted to, by some members of the LSE, in connivance with the Directors and President of the LSE, to deprive a large number of investors of crores of rupees.

The counsel submitted that the rates of Alico were declared 'spot' at Rs 31.56 on 10.7.95 at 1.45 p.m. by the LSE, whereas the KSE did not declare it 'spot' and deliberately created a confusion.

Similarly, it was further submitted on 11.7.95 the rate of the said company was declared 'spot' at Rs 35.25 by LSE and at Rs 35.50 by the KSE. These rates were further stretched to Rs 42 on the same day.

The said shares were declared twice 'spot' on the same date but not a single transaction was made on the declared 'spot' rate. The sale contracts were signed with the investors at much higher rates and no physical amount was paid or delivery made.

During the third and second clearings, the counsel submitted, the shares remained 'spot' and waved between Rs 42 and Rs 58, a 600 percent abnormal rise in the value of shares clearly due to 'fornering' of shares. These transactions were entered into brokerage houses at much lower than declared rates. These irregularities had been brought to the notice of the LSE and CLA. Moreover, the National press also agitate against this matter but there was no corrective action from the relative quarters.

It was prayed that all the transactions during the period from 4.7.95 to 24.7.95 might very kindly be declared as illegal, null, void and without any lawful authority.

It was also prayed that as interim delivery any trading or setlement of deliveries of Alico shares might be suspended till the final disposal of the case.

The learned judge directed to transmit the copy of the petition to the CLA to decide this within a month starting from August 15.