In an extra-ordinary meeting called on by Karachi Stock Exchange (KSE) on Thursday, the stock brokers have unanimously agreed to reject the proposal of raising the term in office of the directors on the board of the bourse to two
years. The KSE directors are currently having a one-year term at the office and a meeting was called to extend the existing time limit but the resolution was turned by a large majority of brokers.
According to unofficial reviews, only four votes were casted in favour of the resolution, while 57 were casted against it to turn it down eventually. Only 61 brokers out of a total of 200 attended the meeting.
One of the senior broker revealed that KSE Board of Directors has posed this resolution on the request of the Securities and Exchange Commission of Pakistan (SECP) but it was not acceptable to the majority of brokers by the end
of the meeting. An earlier meeting was also held in which three-year term was proposed for the directors’ office and it also went to the same fate as this one did.
The Company Law does provide for a three-year term for the board of directors but a senior stock broker argued that the legislation also allows directors to choose a chairman instead of being nominated. The similar practice is
done in case of bourses by the SECP.
The senior broker further cited that to alter the rules lies exclusively with the members and even then it had to pass through a long drawn out process. One such condition was that the change in articles of association could be
made at a meeting at which half of the registered members were present and three-fourth of them supported the amendment.
It is hard to speculate at present that what will be KSE’s next steps to convince the stock brokers over the issue of extending the directors’ office tenure but it is clearly visible that the brokers are certainly not willing to
accept any such proposal at majority.