National Tanneries Limited summoned a shareholders’ meeting on April 28, to authorise the chief executive to sell the company’s factory at Kot Lakhpat Lahore, ‘at the best possible negotiated price’.

The decision by the management to put the factory up for sale came as a surprise to some of the investors. The company had swung back to a profit of Rs5.3 million in the financial year to end-June 1995, from a loss of Rs1.1 million the year earlier.

Dividends have continued to be paid for each year after 1994. Hilal Tanneries Limited, an associated company of Service (shoes), joined the dozen companies offering to buy-back shares held by small shareholders.

In a separate move, the company has told the Karachi Stock Exchange that it intends to de-list and buy out minority shareholders in the company, whom it is offering Rs22 (US$0.48) per share.

The reason given by the company is a decreasing rate of return preventing it from paying a reasonable dividend to shareholders and the directors’ wish to stick to the strict Islamic principal of eliminating ‘interest’.