Law: Companies Ordinance, 1984

Section: 224,224(2)

Law: Companies (General Provisions and Forms) Rules, 1985

Section: 16

Companies Ordinance (XLVII of 1984)--- ----S. 224---Companies (General Provisions and Forms) Rules, 1985, R.16---Insurance company--- Trading by Directors--- Failure of beneficial owner to tender or recover amount of gain---Effect---Company made purchase and sale transaction more than ten percent shareholder of "issuer company", within period of less than six months---Company, on account of said transaction, made gain of Rs.64,894,928 as computed in the manner prescribed in R.16 of the Companies (General Provisions and Forms) Rules, 1985---Company tendered Rs.54,013,826 in favour of the 'issuer company'; whilst, accrual of balance amount of gain Rs.10,881,102 was neither reported by the company, nor its tendering or recovery was intimated to the Commission as provided by S.224(2) of the Companies Ordinance, 1984---Company was intimated that the amount of said balance had vested in favour of the Commission---Validity---Gain would remain under all circumstances property of the company; and would not in any manner vest with the Commission---Demand raised through show-cause notice, had become infructuous---Amount of tenderable gain, was calculated pursuant to the manner provided in R.16(2) of Companies (General Provisions and Forms) Rules, 1985, which had been declared inconsistent with the statute by the Appellate Bench of the Commission in its earlier order---Impugned order was set aside. Khan Gul Khan and other's case 2010 SCMR 539 and 2011 CLD 907 ref. THIS ORDER PASSED BY: TAHIR MEHMOOD, COMMISSIONER (CLD) 1. This order is in Appeal No. 53 of 2011 filed under section 33 of the Securities and Exchange Commission of Pakistan Act (the "Commission"), 1997 against the order dated March 18, 2011 (the "Impugned Order") passed by the Respondent. 2. The brief facts of the case are that EFU General Insurance Limited ("Appellant") made purchase and sale transactions as a more than ten percent shareholder of EFU Life Assurance Limited (the "Issuer Company") within the period of less than six months. On account of the transactions, the Appellant made gain of Rs. 64,894.928/-, computed in the manner prescribed in Rule 16 of the Companies (General Provisions and Forms)…

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