Law: Companies Ordinance, 1984

Section: 492,472,476

Companies Ordinance (XLVII of 1984)---Ss. 492, 472 & 476--Making false statement--Imposition of penalty---Examination of annual audited accounts of the company for relevant year revealed that accounts of the company disclosed receivable against disposal of short term investment in the amount of Rs.34.264 million---Company attributed said receivable to the sale proceeds of ordinary shares received from company's authorized Broker---Information called from the Broker showed that the share sale proceeds were not remitted/settled by the broker directly to the company; rather were transferred from the company's trading account to the trading account maintained in the name of Executive of the company---Company was called upon for the supporting documents to verify its position with regard to the sale of shares and receipt of funds including the Bank Vouchers and broker ledger, but same were not provided by the company--company's plea for not recording the transaction due to delayed receipt of written confirmation was not valid since the company was regularly receiving the ledger/trading statement from the Broker where all the relevant share sales and purchases were indicated along with the receivable/payable balance from/to the Broker---Company's representative, during the hearing, after witnessing the evidence, admitted the default and requested for a lenient attitude---Section 492 of the Companies Ordinance, 1984 had been violated and Directors of the company were liable for the penalties as defined in said section--However, since substantial amounts of interest from loan had been provided by Directors to the company, penalty aggregating to Rs.17,50,000 on the Chief Executive and 7 Directors, was imposed, in circumstances. ORDER TAHIR MAHMOOD, COMMISSIONER (CLD).--- This order will dispose of the proceedings initiated against the Chief Executive, following Directors and CFO / Company Secretary of Zahidjee Textile Mills Limited (the "Company") under section 492 read with section 476 of the Companies Ordinance, 1984 (the Ordinance) which states:--- "Whoever in any return, report, certificate, balance sheet, profit and loss account, income and expenditure account,…

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