Dewan auto required to hold buyback

The Pakistan Stock Exchange (PSX) has directed the sponsors of Dewan Automotive Engineering Ltd (DAEL) to provide the rest of the shareholders with an option to sell their stakes to them within 90 days (up to Dec 11) at a PSX-determined price. The regulatory action demanding that the auto-part maker hold a compulsory share buyback follows its non-compliance of many regulations, particularly those relating to the payment of penalties and other dues to the exchange, including the listing fees for two years. Upon completion of the buyback process by the company’s sponsors, the exchange will delist DAEL, which has already been placed on the defaulter’s segment of the PSX. The regulatory backlash is in spite of the company claiming in its latest quarterly report that it has “rectified the default” and has requested the removal of its name from the defaulter’s counter. “No action by the exchange… is warranted under the said circumstances,” it said. According to the financial accounts for the first nine months of 2022-23, the company recorded a net loss of Rs44.6 million and carried accumulated losses of Rs1.8 billion on its balance sheet. Its current liabilities exceed current assets by Rs1.3bn.