Law: Companies Act, 2017

Section: 237, .33

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

Section:

Companies Act (XIX of 2017)---

----S. 237---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Circular No. 24 of 2017 issued by Securities and Exchange Commission of Pakistan---Transmitting of Quarterly Financial Statements to Securities and Exchange Commission of Pakistan by the company---Failure to transmit---Effect---Securities and Exchange Commission of Pakistan imposed penalty upon the appellants /company for failure for successive default periods---Contention of the appellants was that by filing of quarterly financial statements with the Pakistan Stock Exchange (PSX) and Company Registration Office (CRO) fulfiled the requirements of the provisions of the Companies Act, 2017---Validity---Relevant provisions transpire that subsection (1) of the S. 237 of the Companies Act, 2017 expressly provides the time for filing of quarterly accounts whereas subsection (2) of the S. 237 specifies mode for filing of the same (quarterly accounts) i.e. electronically---Furthermore, the Securities and Exchange Commission of Pakistan, in order to facilitate the companies and to streamline the filing process, issued Circular No. 24 of 2017 which makes it incumbent upon a listed company to electronically transmit its quarterly financial statement, in terms of S. 237(2) of the Companies Act, 2017, on the designated (given) e-mail address---Interim financial statements prepared accurately and in timely manner, provides a reliable source of information regarding a company's financial position and performance to its users, besides illustrating the results of the management's stewardship of resources entrusted to it---Appellants had fiduciary duties towards the Company and its shareholders while providing information to various stakeholders concerning their performances as to how diligently and ethically they were are discharging their fiduciary duties and responsibilities---Hence, contention of the appellants (that filing of quarterly financial statements with the concerned CRO and PSX fulfiled the requirements of the provisions the Companies Act, 2017) did not stricto sensu correspond with the relevant provision and might be construed as a mitigating factor attracting leniency, only if done within stipulated time, which was not the case in the present matter---Moreover, the argument of the appellants did not sustain on the touchstone of alternate filing modes as in most of the default periods, the same was done either with delay or not done at all---No case for interference by the Appellate Bench in the penalty imposing impugned order was made out---Appeal filed by the company was dismissed, in circumstances.

ORDER