Law: Companies Ordinance, 1984

Section: 260

Law: Securities and Exchange Ordinance, 1969

Section: 6,22

Companies Ordinance (XLVII of 1984)--- ----S. 260---Securities and Exchange Ordinance (XVII of 1969), Ss.6 & 22---Securities and Exchange Rules, 1971, Third Sched.---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Major irregularities in calculation of "Net Capital Balance" (NCB)---Inspection report had highlighted major irregularities in calculation of "Net Capital Balance" (NCB) of the corporation---Such calculation was duly verified and certified by the Chartered Accountant---Net Capital Balance was not in accordance with Third Schedule of Securities and Exchange Rules, 1971---Commission dissatisfied with response of show-cause notice, found that Chartered Accountant, had failed to perform its professional duty with due care; and had shown negligence in verifing the 'NCB', and imposed penalty of Rs.50,000 on Chartered Accountant with direction to ensure full compliance with Ordinance, Rules and regulations and directives of the Commission---Contention of Chartered Accountant, was that penalty should not have been imposed on them as it had not been imposed on other Chartered Accountant firms with similar violations---Validity---Facts and circumstances of each case were different; and that could not be used as a defence in respect of alleged violations---Chartered Accountant had committed violations of the rules and regulations---Taking a lenient view Commission, set aside impugned order to the extent of penalty; and strictly warned the Chartered Accountant to ensure compliance of the Rules and Regulations in the future. ORDER 1. This order is in Appeal No. 22 of 2013 filed under section 33 of the Securities and Exchange Commission of Pakistan Act (the "Commission"), 1997 against the order (the "Impugned Order") dated 11/04/13 passed by the Respondent. 2. The facts leading to this case are that the Commission in exercise of its powers under section 6(1) of the Securities and Exchange Ordinance, 1969 ("the Ordinance") read Rule 3 and Rule 4 of the Stock Exchange Members (Inspection of Books and Record) Rules, 2001 (the "Inspection Rules") ordered an inspection of the books and records required to be maintained by M/s.…

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