Karachi: The Sindh High Court has given a stay order against Jahangir Siddiqui and Co Ltd’s (JSCL) attempts to ratify a decision of the company to grant an advisory ‘bonus’ to a family member and Executive Director to the tune of Rs 424 million in 2012. JSCL’s Annual General Meeting which took place earlier today at DHA Creek Club Karachi, included an agenda item to ratify the decision of the company to pay a bonus to Ali Jahangir Siddiqui, a non-executive director of the company and son of the largest beneficial shareholder of the company during the period ended 2012. The decision of the Sindh High Court headed by a single member bench comprising of Justice Shafi Siddiqui, is an example of relief given to minority shareholders of a company which was being hoodwinked by the management of JSCL.
It is pertinent to note that the decision of court to provide a stay order is only against the ratification of an illegal decision of a company, whose shareholders have suffered at the hands of the management.
During the period ended 2012, Ali Jahangir Siddiqui received a total emolument of nearly Rs 433 million which was 300% more than the total expenses of the company.
The shareholders of the company were only paid a dividend of Rs 0.75 per share totaling Rs 572.8 million, majority of which was received by the controlling shareholders of JSCL, including Jahangir Siddiqui and Ali Jahangir Siddiqui.
The minority shareholder, Asif Mannan, reiterated that the decision of the company to seek ratification of their illegal action was a way to recover lost face after an initiation of inquiry by the SECP in relation to the bonus paid to Ali Jahangir Siddiqui.
He commented that “this decision will go a long way in protecting shareholders interest in the corporate sector in the country as such kind of ratification would have created precedence for other companies to pay related parties and controlling shareholders huge bonuses at the cost of dividends and returns to shareholders who invest their savings in companies that have great potential.”
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