Law: Companies Ordinance, 1984

Section: 208,476,160(I)(b)

Companies Ordinance (XLVII of 1984)--Ss. ----Ss. 208, 476 & 160(I)(b)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---S.R.O. 865(I)/2000 dated 6-12-2000---Investment in associated companies and undertakings without prior permission of shareholders of both the companies and Commission---Directors of the company, in circumstances, had failed to comply with the substantial requirement of S.208 of the Companies Ordinance, 1984 and S.R.O. 865(I)/2000 dated 6-12-2000---Authorities dissatisfied with response of appellants to show-cause notice, rightly proceeded against the appellants and imposed a fine of Rs.70,000 on appellants for the contravention of S. 208(3) read with S.476 of Companies Ordinance, 1984---Impugned order could not be interfered with, in circumstances. Messrs Gharibwal Cement Limited and others v. Executive Director (Enforcement and Monitoring), Securities and Exchange Commission of Pakistan 2003 CLD 131 ref. ORDER This order shall dispose of Appeal No. 37 of 2011 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 11-1-2011 (the "Impugned Order") passed by the respondent. 2. The Enforcement Department of the Commission (the "department") while examining the annual audited accounts for the year ended 30-6-2008 (the "Accounts") of Balochistan Engineering Works Limited (the "Company") observed that the Company has made equity investment of Rs.248,248,972, in DYL Motorcycles Limited, Elecom (Pvt.) Limited, Omega Forging Limited, Micado (Pvt.) Limited, Autocity (Pvt.) Limited, Central Trading (Pvt.) Limited, CNPS Associates, (Pvt.) Limited and TGL Limited ("associated companies") and advanced an amount of Rs. 52,500,000 to another associate company namely; ALT Source Communication (Pvt.) Limited at a mark-up of 14% for a period upto one year. The department vide its letter dated 29-10-2009 advised the Company to clarify its position with regard to compliance of section 208 of the Companies Ordinance, 1984 (the "Ordinance"). The Company along with its letter dated 18-11-2009 submitted a copy of the minutes of the Extraordinary General Meeting…

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