Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Securities and Exchange Commission of Pakistan Act (XLII of 1997)---S. 33---Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002), Ss. 3, 4, 5, 7, 9, 13, 25 & 26---Increase in shares---Annual audited accounts of the company for the relevant years transpired that company's shareholding had increased attracting Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002---Company's consultant, intimated that the transactions which caused increase in shareholding of company, were shares from parents of the Chief Executive of the company as gift and from his brother---Consultant of company further stated that those were all inter family transactions/arrangements and no general public acquisition or takeover had taken place---Shares in question having been claimed to be transferred to the company as a gift from the Chief Executive's parents during their lifetime, subsection (e) of S.3 of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 was inapplicable---Section 3 of said Ordinance had listed down certain transactions which were exempt from the provisions of said Ordinance---Inter family transactions/arrangements did not fall under any of those exempted transactions---Commission had already taken a lenient view in the impugned order by imposing a penalty of Rs.100,000 on the appellant, when maximum penalty could have been one million rupees--- Impugned order imposing penalty was upheld and appeal was dismissed. ORDER This order shall dispose of Appeal No. 86 of 2006 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 10-11-2006 (the "Impugned Order") passed by the respondent. 2. On examination of the annual audited accounts of Mubarak Textile Mills Limited (the "Target Company") for year ended 30-6-2003, 30-6-2004 and 30-6-2005 it transpired that the Appellant's shareholding had increased from 599,000 (22.19%) shares as on 30-6-2004 to 839,500 (31.09%) shares as on 30-6-2005, thus, attracting Listed Companies (Substantial Acquisition of Voting Shares and Takeovers)…

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