Law: Companies Ordinance, 1984

Section: 160

Companies Ordinance (XLVII of 1984)--Ss. 160(1)(b) & 265---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Investigation of company's affairs--Appointment of Inspector---Appeal had been filed against order of Commissioner, whereby Inspectors were appointed to investigate affairs of appellant-Company which was facing financial problems, including liquidity crunch etc.---Commissioner had appointed Inspectors under S.265(b) of Companies Ordinance, 1984 after issuing show-cause notice under the circumstances that affairs of appellant-Company were not being conducted in accordance with sound business and prudent commercial practices; that affairs were being conducted in a manner oppressive to its members; that affairs were being conducted with an intent to deprive members of reasonable return on their investment and-that said defect could lead to ultimate closure of the project--Appellant-Company had not paid any return to its share holders by way of dividend for the last 12 years and its accumulated losses had increased and its negative equity had also increased---Said reduction was due to the sale of assets of the company and not because of any business returns---Company was no longer in business and had closed down its production and no immediate prospect was in sight for reversing that situation---If said situation was allowed to continue, there was every likelihood of closure or insolvency of the company---Company was a listed company and the Commission in that regard had a dual role of beneficial regulation and control of corporate sector as well as protection of investors and the Commission could not be expected to sit idle while listed company slided into liquidation---Authority to carry out inspections had been provided to Commission by law for entirely that reason---Argument of appellant that present management was not responsible for the quagmire faced by the company, could not be made reason not to inquire into affairs of the company as intention behind the inspection, was not witch hunting, but was to find reasons for bad state of affairs of the company---Impugned order passed by Commissioner, could not be interfered with…

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