Al-Abbas Cement and Maple Leaf Cement have said that the Companies Ordinance 1984 and creditors bar them from paying entitlements to shareholders unless debts are paid off and companies turn into profit.
“No dividend shall be paid by a Company otherwise than out of profit of the Company,” said Al-Abbas Cement quoting Section 249 of the Companies Ordinance, 1984, in a reply Karachi Stock Exchange (KSE) show cause notice. The Company paid last dividend on June 30, 2004.
“We assure you that once Company earns profit; the Board of Director will recommend the dividend or Bonus as the case may be,” said the notification signed by Zuhair Abbas, Chief Financial Officer, Al-Abbas Cement. Maple Leaf Cement replied to KSE, “...the creditors have made a condition for restructuring that no dividend or payouts can be made without prior approval of Sukkuk lenders till the long term debts are repaid.”