Illegal attempts by JS Bank to take control of Bank Islami
Renowned businessman Jahangir Siddiqui has increased stake of weak company JS Global by 300% through alleged illegal insider trading and offered shares of JS Global to minority shareholders of Bank Islami in exchange for their shares
Leading business firm JS Group has won the purchase of Bank Islami by resorting to alleged insider trading, while Pakistan Stock Exchange authorities have remained silent on the alleged legal actions of Jahangir Siddiqui.
The famous business tycoon of the country Jahangir Siddiqui allegedly increased the prices of his company JS Global by doing insider trading, while the Pakistan Stock Exchange did not take any action against him for the alleged illegal action.
JS Bank owner Jahangir Siddiqui, who is a 29 percent shareholder of Bank Islami, is reportedly trying to gain control of Bank Islami by buying more shares of the said bank.
The Mutual Funds Association of Pakistan has sent a letter to the Securities Exchange Commission of Pakistan stating that JS Bank is working to acquire a controlling stake in Bank Islami Pakistan Limited. We feel that the interests of the minority shareholders have been neglected in this proposed transaction.
The text of the letter to the Securities Exchange Commission states that the proposed transaction appears to take advantage of several weaknesses in existing rules and regulations, which are detrimental to the interests of minority investors and the sanctity of the capital market.
The text of the letter states that there are two major steps before JS Bank acquires majority control of Bank Islami. In the first step, JS Bank entered into share purchase agreements with existing shareholders.
42.45% of the outstanding shares of Bank Islami. This exchange has been mutually agreed between the parties.
The exchange ratio was fixed at 1.1318 shares of JS Bank for 1 share of Bank Islami. Under the second phase, JSBL will be required to make a public offer to the minority shareholders of BIPL for at least 24.88% stake at a book value of Rs 24.0 per share, subject to the total maximum exchange price with the minority holders. Will do.
6.63 billion JS Bank intends to avoid cash payment by using the relaxation introduced in the Companies (Substantial Takeover and Acquisition) Regulations, 2017 as amended by a notification dated September 30, 2022. Under the bank’s new amendments, transactions with minority shareholders can be settled using equity/debt instruments instead of cash. For this purpose, shares of JS financially weak subsidiaries like JS Global, JS Company Limited are being given.
It may be recalled that last month Sindh High Court stopped JS Group from acquiring majority shares of Bank Islami. Minority shareholders of Bank Islami had filed a petition in the Sindh High Court seeking to restrain JS Group from acquiring majority shares of Bank Islami.
The petitioners pleaded that on November 15, 2022, JS Bank expressed its intention to purchase 51 percent voting shares of Bank Islami, which was also communicated to Pakistan Stock Exchange and SECP.
It was also stated that Jahangir Siddiqui is the real buyer in this case, Jahangir Siddiqui controls JS Bank and JSCL.
