The apex regulator of capital markets asked the Pakistan Stock Exchange (PSX) on Thursday to “immediately rescind” the public notice issued on Feb 7 regarding the interest shown by Bahria Town in acquiring a majority stake in Escorts Investment Bank (EIB), a non-banking finance company.
AKD Securities had stated on behalf of Bahria Town that the real estate company was interested in buying up to 71.16 per cent shares in the relatively small investment bank along with management control.
“No requisite approval has been obtained by EIB or its sponsors with regard to the potential acquirer/investor,” the Securities and Exchange Commission of Pakistan (SECP) said in its communication to the PSX.
Any potential acquirer of a non-banking finance company has to obtain prior approval of the SECP under the NBFC Regulatory Framework, including compliance with the fit and proper criteria.
“Therefore, any public announcement made by AKD Securities in respect of the (possible) acquisition of 71.1pc shares and control of EIB is neither effective nor tenable,” the regulator said.
The SECP also directed AKD Securities not to publish Bahria Town’s intention to purchase the stake in the investment bank in newspapers. In addition, the SECP told EIB and its sponsors “not to proceed with any arrangement or negotiations in respect of the sale of its majority stake” to Bahria Town without obtaining prior approval of the regulator.
Unlike commercial banks that are regulated by the State Bank of Pakistan (SBP), investment banks are regulated by the SECP.
Last year, Bahria Town showed interest in acquiring a majority stake in Burj Bank, but the SBP turned down its request for unexplained reasons.