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" A STEP IN THE RIGHT DIRECTION A STEP IN THE RIGHT DIRECTION   A critical commentary on the latest amendments to the Companies Ordinance, 1984   By   Khurram Rashid, Bar‑at‑Law, Karachi   Epilogue:   Until recently, there was a prohibition on 'companies to buyback their own shares or provide loan/assistance to someone else to buy such shares, section 95 of the Companies Ordinance, 1984 (the "Ordinance") expressly prohibited re‑purchases of this nature and stipulated penalties not only for the company in breach of the provision, but also all its officers who knowingly and wilfully allowed the company to effect the 'buyback', or provided financial assistance to enable some other person to buy such shares.   The Finance Act, 1999 (the "Finance Act") has now amended the above‑referred provisions by allowing the listed companies to purchase their own shares under specified procedure. Given that the power to buyback has come to be understood in all the leading corporate law jurisdictions in the world as essential for the companies' growth and better maintenance in general, and cardinal for capital markets' future, the latest amendments to the Ordinance certainly have a lot to be applauded for.   The background to the amendments:   The traditional reason behind the prohibition on companies to buy their own shares has been two‑fold: firstly, a buyback of this nature inevitably amounts to capital reduction, for which there are express provisions in the Ordinance, requiring the approval of the Court. Accordingly, it is arguable that allowing an 'indirect' reduction by way of share repurchasing would facilitate, at the cost of the investors, the circumventing of the mandatory Court's…