Law:

Section:

Companies Ordinance (XLVII of 1984)-----Ss. 158 & 476---Failure to hold annual general meeting--Imposition of fine---Company which was required to hold its annual general meeting for relevant 'year within prescribed time, having failed to comply with said mandatory requirements, a show-cause notice was served on the company and its Directors including Chief Executive, calling upon them to show-cause as to why penalties as provided under Ss.158(4) & 476 of Companies Ordinance, 1984 may not be imposed on them, but no response was received to the said notice---Directors and Chief Executive had intentionally avoided appearance before Commission despite the fact that they were provided two opportunities of hearing by the Commission which they failed to avail---Effect---Company had failed to hold annual general meeting even after issuance of show-cause notice---Default, in circumstances was wilful and deliberate---Protection of investors/share-holders was one of the primary objectives of Companies Ordinance, 1984 as investors/share-holders provide seed for capital formation---If the interest of investors was protected they would save and invest more; their interest was protected by transmission of timely, adequate and meaningful information to them and it was annual and interim accounts which provide information to investors about the affairs of the Company---Annual general meeting was a forum where investors could freely speak, discuss and vote on important matters concerning approval of accounts, appointment of auditors, election of Directors etc.---Directors of the company had not observed said compulsory requirement of law---Default under subsection (1) of S.158 of Companies Ordinance, 1984 regarding non-holding of Annual General Meeting for the relevant year, stood established; however, instead of imposing maximum fine of Rs.50,000 on the company and every Director" and a further fine of Rs.2,000 per day for the continuous default; fine of Rs.20,000 was imposed on Chief Executive and on each Director under S.158(4) of Companies Ordinance, 1984. No one appeared. ORDER ALI AZEEM IKRAM, DIRECTOR (ENFORCEMENT).---This Order shall dispose of the proceedings…

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