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. 245 & 492---Filing false half-yearly accounts statement by the company---Half-yearly accounts of the company for relevant period filed with the Commission pursuant to the provisions of S.245 of the Companies Ordinance, 1984, were purportedly reviewed by the Auditors who had apparently given clean conclusion of said accounts---Opinion of the Auditors was inconsistent with the opinion expressed by previous Auditors---Auditors had never issued a review report on the accounts of the company, which had raised serious concerns about the authenticity of the Accounts filed with the Commission---Commissioner (CLD) passed impugned order and imposed penalty of Rs.500,000 on the Chief Executive Officer and Rs.50,000 each on the Directors of the company---Default committed by the company was admitted, but it was contended that penalty imposed was too harsh, which could be set aside---Validity---Under provisions of S.492 of the Companies Ordinance, 1984, a company was strictly prohibited from making false statement or omitting any material fact knowing same to be material---Directors in the case had attempted to circumvent the legal provisions requiring submission of reviewed half yearly accounts---Directors had tried to mislead the Regulator, the shareholders and the creditors by filing un-reviewed half yearly accounts---Negligence of the Directors, could not be accepted as an excuse for such deliberate effort to deceive a vital regulatory compliance requirement---Directors had in fact demonstrated an unprofessional and irresponsible attitude by submitting false information purporting same to be authentic---Default under S.492 of the Companies Ordinance, 1984 was established to have been committed by the appellants/Directors---Penalty had been imposed on the Chief Executive Officer and the Directors in their personal capacity---Lenient view on the penalty could not be taken on ground that the company had poor financial health---Impugned order was not interfered with. ORDER This order shall dispose of Appeals Nos.13, 14, 17, 19, 21, 22 and 25 of 2011 filed…

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