Law: Companies Ordinance, 1984

Section: 208

Companies Ordinance (XLVII of 1984)--S. 208---S.R.O.865(I)/2000, dated 6-12-2000--Business transaction of company with associated companies and undertaking without authority of special resolution---Imposition of penalty on company---During examination of annual accounts of the company for the relevant year it was observed that the company had business transaction by making investment in associated companies or associated undertakings without authority of special resolution in violation of provisions of S.208 of Companies Ordinance, 1984---Company had contended that it had passed a resolution for making investment in associated company and that there was no contravention of S.208 of Companies Ordinance, 1984---Alleged resolution was passed about nine years ago and investments made by the company in associated companies on the basis of a nine years old resolution could not be treated as a valid investment---Investment made by the company for the last number of years was not bringing duty return to its shareholders: in view of amendments made in the provisions of S.208 of Companies Ordinance, 1984, company had to disclose the additional information to its shareholders as required under S.R.O. 865(1)/2000 dated 6-12-2000---No such disclosures were matte indicating that company had always been viewing such investment as a trade transaction---Company and its management, in circumstances had contravened provisions of S.208 of Companies Ordinance, 1984---Default under S.208 of Companies Ordinance, 1984, being willful and deliberate, penalty was imposed on the company, as the company had recovered outstanding amount in subsequent period, taking lenient view, instead of imposing a maximum penalty of Rs.10, 00,000 on each Director fine of Rs.2.50,000 was imposed on Chief Executive' of the Company only and other Directors were reprimanded to be careful in future. ORDER Under section 208 of the Companies Ordinance, 1984 JAVED K. SIDDIQUI, EXECUTIVE DIRECTOR (CL).---This order shall dispose of the proceedings initiated through Show-Cause Notice No. EMD/233/595/2002-6612-6618 dated March 4, 2005 against Diamond Industries Limited (the "Company") under the provisions of…

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