Law: Companies Ordinance, 1984

Section: 86

Companies Ordinance (XLVII of 1984)--Ss. 86(3), 472 & 492---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Further issue of capital---Offer of new shares---False statement---Examination of annual accounts of the company for relevant year had revealed that share capital of the company had increased considerably---Show-cause notice was issued to the company but Commissioner (CL) of the Commission dissatisfied with the response of show-cause notice issued to the company, vide impugned order imposed a penalty of Rs.50,000 on each Director under S.492 of Companies Ordinance, 1984 and directed them under S.472 of Ordinance to provide a financial plan after carrying out due diligence---Facts stated by the Commission regarding loan advanced by the Directors to the company and its repayment stood established from the financial statements---Directors' assertion that loans were advanced for balancing, modernization and replacement of the existing plan of the company, was in fact misstatement which facilitated the conversion of Directors' long term loans into equity and caused dilution of ordinary shareholders' equity---Commission in the impugned order had taken a lenient view and no penalty was imposed on the Directors in violation of Balloters, Transfer Agents and Underwriters Rules 2001---Directors had also failed to comply with the direction of the Commission and showed their inability to provide information regarding the working capital requirements and business strategy to bring the company out of operational losses---Appellate Bench of the Commission declined interference in circumstances. ORDER This order shall dispose of Appeal No.26 of 2006 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 18-1-2006 (the "Impugned Order") passed by the Respondent. 2. Examination of annual accounts of Shahpur Textile Mills Limited (the "Company") for the year ended 30-9-2004 (the "Accounts") revealed that share capital of the Company increased from Rs.99.804 million in 2003 to Rs.139.804 million in 2004 as a result of 40.08% right issue (the "Rights Issue") at par on…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492