Securities and Exchange Commission of Pakistan (SECP) has allowed one time relaxation to listed companies from paying dividend directly to shareholders’ bank accounts.
In a circular issued on Tuesday, the SECP said that the provisions of Section 242 of the Companies Act, 2017 provides that any dividend declared by a company must be paid to its registered shareholders or to their order within such period and in such manner as may be specified.
Further, the second proviso of the section states that in case of a listed company, any dividend payable in cash shall only be paid through electronic mode directly into the bank account designated by the entitled shareholders.
The SECP said that the listed companies are facing difficulty to immediately comply with the provision 242 of the Act and have approached the commission for grant of some time to make arrangements for compliance with the provisions of the section.
“Accordingly, the commission has decided to grant one time relaxation to all listed companies from the requirement of payment of cash dividend through electronic mode directly into the bank accounts of the shareholders till October 31, 2017,” the circular said. The listed companies shall continue to pay cash dividend to its shareholders as per previous arrangements till October 31, 2017.
The SECP also directed the listed companies to approach their shareholders for obtaining electronic dividend mandate, update their bank account records and put a system in place, as all dividend payments with effect from November 01, 2017 shall be paid through electronic mode only.