Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Securities and Exchange Commission of Pakistan Act (XLII of 1997)---S. 33---Companies Ordinance (XLVII of 1984), Ss. 214, 216 & 476---Failure of the Directors of the company to disclose the nature of their concern and interest in the contract or arrangement in the meeting of Board of Directors---Directors had participated in the meeting to form quorum at the time of discussion and voted for equity investment in associated company in contravention of provisions of Ss. 214 & 216 of the Companies Ordinance, 1984---Director (Enforcement) of the Commission vide impugned order imposed penalty of Rs.2,000 each on the Chief Executive and Directors of the company---Validity---By virtue of S.214 of the Companies Ordinance, 1984, Director of a company having concern or interest in a contract or arrangement made by the company was required to disclose the direct interest and was not allowed to take part in the discussion or vote on the contract or arrangement in which he was interested---Presence of interested Director was not counted for the purpose of forming quorum of a Board of Director's meeting at which such contract or arrangement was discussed in terms of S.216 of the Companies Ordinance, 1984---Directors of the company had failed to comply with the provisions of S.214 of the Companies Ordinance, 1984---Company had altered the statement of material facts by adding para concerning the Director's interest---Penalty was rightly imposed on the Directors on their failure to comply with the provisions of S.214 of the Companies Ordinance, 1984---In absence of any reason to interfere with impugned order, appeal was dismissed, in circumstances. ORDER This order shall dispose of Appeal No.53 of 2010 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 (the "SECP Act") against the order dated 22-10-2010 (the "Impugned Order") passed by the Respondent. 2. Examination of the annual audited accounts for year ended 30-6-2008 (the "Accounts") of DYL Motorcycles Limited (the "Company") revealed that the Company has made equity investment of Rs.175.090 million by acquiring 442,148 (2007: nil) ordinary shares at Rs.396 each…

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