Chakwal Spinning Mills Limited (CLOUD) has refuted allegations that its management was involved in insider trading with certain investors. In a notice to the Pakistan Stock Exchange (PSX) on Wednesday, the company also denied claims that it failed to disclose all material information about its new technology setup.
The company’s response follows reports that the Securities Exchange Commission of Pakistan (SECP) flagged suspicious trading activities involving an investor in CLOUD’s shares during the review period from December 21, 2023, to August 12, 2024. The SECP announced it would investigate the unusual trading patterns, which have seen CLOUD’s share price skyrocket over the past year. From a price of Rs1.3 at the end of August 2023, the share price soared to Rs168, before dropping amid the investigation reports. However, the price rebounded on Wednesday, closing at Rs117.74.
“It is extremely disappointing to create a link without any proof and based solely on market speculation,” the company stated in its notice to the PSX.
CLOUD also clarified that it is awaiting regulatory approval from the SECP’s Lahore office to issue a new company certificate, which is necessary to launch its technology business.
The company included a letter sent to the Listed Companies Compliance Department-RAD, dated August 23, 2024, explaining that the SECP had not yet issued the Company Certificate, despite all required documents being submitted on August 7, 2024.
CLOUD is set to establish data centers and cloud operations in Pakistan and is awaiting a partnership certificate from Huawei and Dell Technologies.
The company emphasized that it has been striving for revival after suffering significant business losses that led to the shutdown of its operations. Although a previous merger opportunity did not materialize within the decided time frame, the company has since pivoted to the IT sector, recognizing its potential under new government initiatives.
Chakwal Spinning Mills has decided to rebrand as Quantum Clouds & AI Technologies Limited, aiming to become Pakistan’s first multi-cloud company in partnership with global tech leaders. The company plans to establish the first cloud data centers in Pakistan, with the belief that Quantum Cloud will be the only multi-cloud provider in the country.
