Law: Companies Ordinance, 1984

Section: 245

Companies Ordinance (XLVII of 1984)--Ss. 245 & 196---Securities and Exchange Commission of Pakistan (Appellate Bench Procedure) Rules, 2003, R.3---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to prepare and transmit half yearly accounts---Imposition of fine---Company under provisions of S.245(1)(b) of the Companies Ordinance, 1984, was required to prepare and transmit half yearly accounts to its members within specified period had failed to do so; respondent/Executive Director (E & M) of the Commission after issuing show-cause notice to the Directors of the company and the company, imposed fine of Rs.50,000 each on the Chief Executive and the Directors of the company---Show-cause notice was issued to the Directors and the company and not to the Chief Executive of the company, but penalty was imposed on Chief Executive---Chief Executive, could not have been proceeded against, in circumstances---Sections 245 and 196 of Companies Ordinance, 1984, did not differentiate between Executive Directors and Non-Executive Directors and held all the Directors responsible for violation of S.245 of the Companies Ordinance, 1984---Argument of the counsel for the company that since the Director of the company who had not attended Board of Directors' meeting, he would not be held responsible for violation of S.245 of the Companies Ordinance, 1984 was repelled---Fine was rightly imposed on the said Director---Impugned order, however was set aside to the extent of Chief Executive Officer, in circumstances. PLD 1969 SC 167, 1990 SCMR 164 and 1983 SCMR 1239 rel. ORDER 1. This order will dispose of Appeal No. 20 of 2003 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 ("SECP Act") against the order dated 31-7-2001 (the "Impugned Order") passed by the respondent. 2. The facts leading to the case are that Prudential Investment Bank Limited (the "Company") was required to prepare and transmit to its members, within two months of the close of the first half of its year of accounts, the profit and loss account and balance sheet (the "half yearly accounts") as at the end of 31-12-2000…

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