IX. DE­LISTING, SUSPENSION AND DEFAULTERS' COUNTER

1. A listed company may be de-listed, suspended or placed on the Defaulters’ Counter for any of the following reasons:-
   1. if its securities are quoted below 50% of face value for a continuous period of three years.

      Provided that if the shares of the company quoted at 50% or above of their face value then such a rate is maintained for a continuous period of thirty working days;

   2. if it has failed to declare dividend or bonus:-

1. for five years from the date of declaration of last dividend or bonus; or
2. in the case of manufacturing companies, for 5 years from the date of commencement of production; and
3. for five years from the date of commencement of business in all other cases.
   3. if it has failed to hold its Annual General Meeting for a continuous period of 3 years;
   4. if it has gone into liquidation either voluntarily or under court order;
   5. if it has failed to pay the annual listing fees as prescribed in these regulations payable to the Exchange for a period of 2 years or penalty imposed under these regulations or any other dues payable to the Exchange;
   6. if it has failed to comply with the requirements of any of these regulations;
      if the company for any reason whatsoever refuses to join CDS after its securities have been declared eligible securities by the CDC;
   7. no company which has been de‑listed or suspended shall be restored and its shares re-quoted until it removes the causes of de‑listing/suspension and receives the assent of the Board for the restoration

2. No company will be de-listed or placed on Defaulters’ Counter, under these Listing Regulations, unless such company has been given an opportunity of being heard.

   Provided, however, placement of a company on the Defaulters’ Counter for reasons mentioned above in sub-regulation (1) above, shall not impair the power of the Exchange to de-list such company subsequently, if causes mentioned in paras (a) & (b) of sub-regulation (1) are not removed within a reasonable time, or if in the opinion of the Board, such causes will not be removed by the company within a reasonable time, and/or de-listing of such company becomes necessary in the public interest.

31. -A Voluntary de-listing: –
1. Any company intending to seek voluntary de-listing from the Exchange shall intimate to the Exchange, immediately, of the intention of the majority security holders/sponsors to purchase all securities, without exception, from all the security holders with the purpose to de-list the security along with the reasons thereof. Such intimation shall also include minimum price at which the securities are proposed to be purchased.

   Provided that the minimum purchase price are proposed by the sponsors will be the highest of the benchmark price based on any of the following:

1. Current Market Price
2. Average Market Price (Annualized)
3. Break-up Value based on revaluation of assets.
4. Earnings Multiplier approach (for profitable companies)
5. The maximum price at which the Sponsors had purchased these shares from the open market in the preceding one year.

Explanation:

1. Current Market Price:

Current Market Price shall be the closing price on the date the application for de-listing of the company is received by the Exchange.

2. Average Market Price (Annualized):

Average Market Price shall be the daily closing price of shares of the company for the period of three years immediately preceding the date of application for de-listing is received by the Exchange.

3. Break-up Value based on revaluation of assets:

The adjusted Break-up Value which shall be determined by the auditors of the company in accordance with the International Accounting Standards on the basis of the latest audited accounts of the company which must be made to a date not less than 6 months from the date the application is received by the Exchange, on the basis of revalued assets, and such revaluation of the assets must have been undertaken not more than one year prior to the date of the application by category ‘A’ Professional Valuer approved by the Pakistan Banks Association.

4. Earning Multiplier approach (for profitable companies)

Profitable Companies:

Profitable companies shall be the companies that have earned after tax profit in their last audited accounts or their weighted average EPS of last three years is positive.

Fair value = Estimated Earnings * P/E ratio.

This approach is based on the identity that a stock’s current price is the product of its actual earning per share and the P/E ratio. The P/E ratio is calculated by dividing the current price by the actual earning per share. To determine the value of stock, both the earnings and the P/E ratio will have to be estimated.

Price may be determined as a multiple of the P/E ratio of the related sector as on the date of application for the voluntary buy-back of shares is received by the Exchange. Earning per share may be based on the higher of the latest audited accounts of the companies in that sector or a weighted average earning per share of last 3 years of 50%, 33% and 17% for the latest, second latest and third accounting period respectively of those companies.

1. The final minimum purchase price of the securities to be de-listed shall be fixed with the approval of the Exchange.

At the same time the Exchange shall determine the minimum percentage of securities to be purchased by sponsors to qualify for de-listing and the same will be communicated to the company.

2. In case of disagreement of sponsors on minimum percentage to be purchased as determined by the Exchange, the sponsors will file an appeal with the commission within 10 days of receipt of communication of such determination under intimation to the Exchange. The decision taken by the Commission will be final and binding.
3. The sponsors/majority shareholders shall submit an undertaking that they will abide by these Regulations which pertain to buy-back of shares/voluntary de-listing of securities.

iv) Until the decision on the sponsors’ offer for buy-back of shares is taken by the Exchange or the commission, as the case may be, the sponsors will not be allowed to withdraw their such offer.

31. -B Voluntary de-listing of a security shall be subject to the following: –

1. Approval of the proposal in general meeting of the company by not less than ¾ of the security holders present in person or by the proxy at such general meeting.
2. Compliance by the company with the prescribed procedure, guidelines/criteria and other terms and conditions may be laid down by the Exchange.

The Exchange may for any reason whatsoever refuse to accept the proposal of the company, the purchase price and/or the request to de-list the securities.