Law:

Section:

--------Ss. 180 & 186------- Election, term of office and duties of the Directors-------Under provisions of S.180 of the Companies Ordinance, 1984 term of office of Directors of the company, was three years-------In the present case, election of Directors was held prior to the expiry of the term of existing Directors, in violation of provisions of S.180 of the Companies Ordinance, 1984-------Company had accepted the default-------Directors of the company, in addition to the day-to-day running of the company and management of its business, also had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute-------Breach of those statutory duties, would usually be a criminal offence, punishable with fine or imprisonment-------Directors, were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care-------Directors, in the present case, had overlooked and failed to perform their duties with due care and prudence-------Directors were supposed to be well aware of their legal obligations in connection with statutory requirement of S.180 of the Companies Ordinance, 1984-------Directors of the company were required to follow the laws in letter and spirit at any cost-------Default of S.180 of the Companies Ordinance, 1984, having been established, penalty as provided under S.186 of the Companies Ordinance, 1984 could be imposed on the company-------Commission, in exercise of the power conferred under S.186 of the Insurance Ordinance, 1984, instead of imposing the penalty, taking a lenient view condoned the company due to the fact that act of conducting the elections of the Directors was just before its expiry of three days of their terms-------Company was issued a stern warning by the Commission that in case of similar non-compliance in future, a stronger action against the company and its Directors would be taken. Syed Wajahatullah Quadri, Chief Financial Officer and Aziz Kapadia, Company Secretary attended. Date of hearing: 28th May, 2014. THIS ORDER PASSED BY: TARIQ HUSSAIN, DIRECTOR (INSURANCE).------- (Under section 180 read with Circular No. 3 of 2006 and section…

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