Law: Non-Banking Finance Companies and Notified Entities Regulations, 2008

Section: 5(2)(e), 7(2)(g), 38, 49(3)(4) & 63

Law: Companies Ordinance, 1984

Section: 282-B

Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003-------Rr. 5(2)(e), 7(2)(g), 38, 49(3)(4) & 63-Companies Ordinance (XLVII of 1984), S.282-B---Making excessive investment--Imposition of fine---Investment Company which was registered under Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 was obliged to adhere to the investment limits specified in the Rules, but company had invested in various companies more than twenty five per cent of its net assets in contravention of R.49(4) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003---Directors of company, who had admitted making excessive investment, had failed to provide any justifiable explanation for the same---Company, in circumstances had contravened R.49(3)(4) of Non-Banking Finance (Establishment and Regulation) Rules, 2003---Said Rules being not applicable at the time of investment by a closed end fund, Directors, who were members of the Board at the time the violation was committed, were answerable for any such default and remained responsible for their acts during the period of their appointment as Directors and show-cause notice issued to them was valid and appropriate---All those companies in which company had been holding investments were one Group of Companies, which had shown that company had been holding strategic investments in said Group of Companies as a major share-holders in the interest of the Group and not in the interest of general public whose funds had been pooled into the Company---All the Directors were employees/ Directors of different Group of said Companies---Directors of Company in circumstances had committed wilful default under R.49(3) & (4) of Non-Banking Finance (Establishment and Regulation) Rules, 2003---Fine of Rs.200,000 on each Director was imposed, in circumstances.ORDER MS. JAWERIA ATHER, DIRECTOR (NBFCD).---This order shall dispose of the proceedings initiated against Directors including Chief Executive Officer of Safeway Mutual Fund Limited ("SMFL") for alleged violation of provisions of Rule 49(3) and Rule 49(4) of the Non-Banking Finance Companies (Establishment and Regulation) Rules,…