Law:

Section:

Companies Ordinance (XLVII of 1984)------- --------Ss. 263, 264 & 265-------Investigation of affairs of the company on application of shareholders of the company-------Shareholders of the company, filed application under S.263 of the Companies Ordinance, 1984 with the Commission for an investigation into the affairs of the company-------Application was made on the basis of alleged mismanagement of the affairs of the company, and alleged illegal transfer of shares of the company-------Commission refused to proceed with the matter, on the ground that so far as the matter relating to transfer of shares and the register of members, the courts were vested with "Exclusive jurisdiction"-------Commission agreed to proceed against the company in relation to "other corporate non-compliances"-------Commission declined to pass an order for appointment of Inspectors for the investigation into the affairs of the company-------Allegations made by the shareholders of the company in their application were of a very grave nature, but response of the Commission related to only one aspect i.e. transfer of shares and charges made in the register of members-------Rest of the allegations made in the application were not addressed; such as failure of service of notice, general meetings and mismanagement on the part of the company-------Shareholders, had a genuine case, which should have been thoroughly investigated-------Issue of transfer of shares, could be one aspect for which the courts had exclusive jurisdiction; that would not bar the Commission from investigation into other grave allegations made by the shareholder-------Filing of application by the company under S.170 of the Companies Ordinance, 1984, and the matter pending before CRO, would not prevent the Commission from conducting an investigation into the affairs of the company in terms of S.263 of the Companies Ordinance, 1984------- Impugned order of the Commission, was set aside with direction to investigate the affairs of the company in terms of S.263 of the Companies Ordinance, 1984 within 30 days, in circumstances. THIS ORDER PASSED BY: ZAFAR ABDULLAH, COMMISSIONER (SMD):--------- 1. This order is in Appeal No. 07…

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