Law:

Section:

(a) Companies Ordinance (XLVII of 1984)------- --------Ss. 412, 413, 305, 309, 59(6-A) & Preamble-------Securities and Exchange Commission Act (XLII of 1997), S. 20(4)(f)-------Winding up of company-------Power of court to assess damages against delinquent directors etc.-------Liability for fraudulent conduct of business-------'Promotion'/'Promoter'-------Meaning and scope-------Powers and functions of the Securities and Exchange Commission-------Depositor/affectees and official liquidators, on winding up of the company, a Bank on ground of bankruptcy, filed applications for determination of the loss and for recovery of the same from the responsible persons, including Securities and Exchange Commission of Pakistan and State Bank of Pakistan-------Securities and Exchange Commission of Pakistan and State Bank of Pakistan took plea that they had not taken part in promotion and formation of the company, nor were they regulators of the insolvent company; therefore, they could not be proceeded against under Ss. 412 & 413 of Companies Ordinance, 1984-------Company Judge, of High Court overruling said plea, held the applications maintainable-------Validity-------Word 'Promotion' being used in S. 412 of Companies Ordinance, 1984 was of significant nature and was also placed in the Preamble of Companies Ordinance, 1984-------Companies Ordinance, 1984, however, did not provide specific definition of the word 'promotion' in terms of S. 412 of the Ordinance; therefore, simple and ordinary meaning of the word 'promotion' would be seen for ascertaining the fact as to whether Securities and Exchange Commission of Pakistan fell within the terms of promoter or otherwise-------Securities and Exchange Commission of Pakistan had pivotal role in promotion of the companies and arranged/provided information to promote investor education-------Under S. 20(4)(f) of Securities and Exchange Commission Act 1997, the Commission would be responsible for performance and function with regard to the promotion and regulation of the organizations, including security industries and related organization such as stock exchange and association of mutual fund, leasing company and other…

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