Law: Companies Ordinance, 1984

Section: 208

Companies Ordinance (XLVII of 1984)---Ss. 208, 473 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Receivable balance, a 'trade debt'---Receivable from associated company not a 'normal trade credit'---Annual audited of accounts for relevant period, showed that company had received balances as "trade debts" and 'other receivables' from its associated company, which did not fall in the nature of 'normal trade credit' in terms of S.208 of the Companies Ordinance, 1984---Executive Director (Enforcement) of the Commission taking a lenient view enforced penalty of Rs.100,000 on each Director, after they admitted default and began process of rectifying the default by recovering the said receivables due from the associated company---Documents and financial statements of the company's 'trade debts' showed far exceeded the paid up capital---Said credit facility extended to the associated company could not be termed as a 'normal trade credit' providing 'open ended trade credit' fell under the ambit of S.208 of the Companies Ordinance, 1984---Said credit was extended to the associated company without seeking prior approval of the shareholders through a special resolution---Chief Executive and the Directors were established to have violated the provisions of S.208 of the Companies Ordinance, 1984 and had not exercised due care while extending credit to the associated concern---In the present case, the aim of the company was to provide financial assistance to its associated concerns---Approval through special resolution in general meeting of shareholders was required for such finances to be provided to associated companies---Company was non-operational and financial statements had further disclosed that an amount aggregating to Rs.176,112,583 was still receivable from the associated company which had also shut down its plant and was running into huge losses---No compliance had been made in pursuance of the directions issued by the Commission through the impugned order---No markup had been provided in the current financial year against the liability---Impugned order could not be interfered with, in circumstances. ORDER This order shall…

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