SBP Introduces New Mechanism For Disinvestment For Foreigner Investors
Fida Hussnain (@fidahassanain) Published October 27, 2020 | 02:39 PM
The State Bank of Pakistan says that the purpose of this new mechanism is to facilitate the foreign direct investment as they [foreign investors] may invest in Pakistan with their confidence and ease of doing business.
KARACHI: (UrduPoint/UrduPoint / Pakistan Point News-Oct 27th, 2020) The State Bank of Pakistan (SBP) on Tuesday introduced a new mechanism to enable companies in Pakistan to conveniently remit out disinvestment proceeds to their foreign shareholders.
According to a release by State Bank of Pakistan, the goal of this initiative is to make Pakistan a more attractive place for investment by increasing investors’ confidence and support ease of doing business. The new mechanism also incorporates feedback received from investors and other stakeholders. A
Previously, there was a mechanism under which a designated bank was required prior approval of the State Bank for remittance of disinvestment proceeds above market value, for listed securities and, above breakup value, for unlisted securities. This requirement presented numerous constraints for investors.
Under the new mechanism, the bank designated by the company has been delegated the authority to remit the entire disinvestment proceeds to non-resident shareholders, upon submission of required documents, by following a convenient mechanism without referring the case to SBP. The number of required documents would be in accordance with the size of the transaction.
For disinvestment proceeds not exceeding the market value / break-up value, the required documents would include copy of Share Purchase Agreement, broker’s memo in case of quoted shares/break-up value certificate of a QCR rated practicing Chartered Accountant in case of unlisted shares, latest audited financials of the company, signed M-Form, and an undertaking from the buyer that in case the transaction is between related parties, the same has been concluded at an arms-length basis.
For disinvestment proceeds exceeding the market value / break-up value, the additional required documents would include a detailed valuation/ transaction due diligence by the buyer showing basis, methodology and key valuation metrics used for valuation. In case the total remittance of disinvestment proceeds exceeds US Dollar 50 million (or equivalent in other currencies) during a span of six months, the applicant shall also submit an independent review of the buyer’s valuation, from QCR rated practicing chartered accountant, that shall be assessed by the designated bank without needing to send to the SBP.
This initiative of State Bank will increase the investors’ confidence and would facilitate the local companies in particular the start-ups to attract more foreign investment for their businesses.
Related Topics
Recent Stories
Mired in crisis, Boeing reports another loss
Session Awarding Ceremony 2024 held at Cadet College Muzaffarabad
Austrian ski great Hirscher to make comeback under Dutch flag
Pakistan, Japan agrees to convene 'Economic Policy Dialogue'
FM Dar conveys deepest sympathy on torrential rains devastation in UAE
Spain PM Sanchez says weighing resignation after wife's graft probe
Tennis: ATP/WTA Madrid Open results - 1st update
Long-lost Klimt portrait auctioned off for 30 mn euros
Osaka seals first win on clay since 2022 in Madrid
Earthquake jolts Karachi
Sindh minister orders operation after attack on police in Ghotki
TikTok to fight US ban law in courts
More Stories From Business
-
Mired in crisis, Boeing reports another loss
7 hours ago -
Pakistan, Japan agrees to convene 'Economic Policy Dialogue'
7 hours ago -
British-Pakistani firm unveils $35 million luxury apartments for overseas Pakistanis in Islamabad
8 hours ago -
European stocks lose momentum after global rally
8 hours ago -
New pulses varieties imperative to cater domestic food requirements: Dr Khalid Hasan
9 hours ago -
CEO KP-EZDMC meets CRBC officials
9 hours ago
-
Pakistan among nine poor countries that produces 90 percent cigarettes for world
9 hours ago -
Chief Minister Gilgit Baltistan Haji Gulbar Khan calls on Minister for Privatisation
10 hours ago -
Germany nudges up growth forecast, ailing economy at 'turning point'
10 hours ago -
Revised UAF budget recommended
10 hours ago -
IDEA, TEVTA organizes Job Fair for youth
10 hours ago -
Massive financial, administrative scam unearthed at SCCI
10 hours ago