Law: Companies Act, 2017

Section: 89

Companies Act (XIX of 2017)--- ----S. 89---Reduction of Share Capital---Principle---Petitioner company sought reduction of share capital---Principle---Validity---Confirmation of resolution of reduced share capital questions for consideration were, should the Court refuse its sanction to the reduction out of regard to the interest of those members of public who could be induced to take shares in the company; was reduction fair and equitable between different classes of shareholders; whether reduction was shared by all; and was it designed to work justly and equitably and whether it did not involve diminution of liability in respect of unpaid capital or payment of any shareholder of any paid up capital; and there was evidence regarding loss of capital and non-representation of available assets---None of such impediments existed---Proposed reduction in share capital, as resolved by petitioner company itself, was just, fair and reasonable---Such reduction was not likely to adversely affect interests of shareholders who had themselves resolved to approval of scheme of reduction---High Court confirmed proposal for reduction of share capital in terms of the requirements---Petition was allowed accordingly. Aman Aftab for Petitioner. Nemo for Respondent. hearing date: 15th February, 2022. JUDGMENT MUHAMMAD SHAFI SIDDIQUI, J.---This petition has been filed by the petitioner company under section 89 of Companies Act, 2017 for confirmation of the reduction of share capital. Securities and Exchange Commission of Pakistan has responded in terms of its parawise comments. 2. I have heard learned counsel for petitioner and perused material available on record whereas no one has appeared on behalf of the respondent/SECP though parawise comments have been filed. 3. The company was incorporated somewhere in November 2019 as limited by shares under the then provisions of Companies Act, 2017, by SECP, having its object to operate as Insurance Company to carry out general insurance business, as disclosed in the Companies Memorandum of Association. The authorized capital was 1,000,000,000 divided into 100,000,000 ordinary shares of Rs.10 each with initial paid up capital of the…

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