Law: Leasing Companies (Establishment and Regulation) Rules, 2000

Section: R-5,5(b),20

Leasing Companies (Establishment and Regulation) Rules, 2000--Rr. 5(b) & 20 Security and Exchange Commission of Pakistan Act (XLII of 1997), S.33 Appeal before Appellate Bench of the Commission Failure of company to enhance its paid up capital to Rs.200 million as per requirement of R.5(b) of Leasing Companies (Establishment and Regulation) Rules, 2000 Executive Director of Specialized Companies Division of the Commission imposed fine on Directors of the Company for their such failure and cancelled its licence to operate as leasing company Validity Company had adopted dilly dallying. tactics and m6de no serious attempt to raise its paid up capital to requisite level Earlier venture of company for amalgamation with another company had failed on 23 6 1999 Neither any proposal for enhancement of paid up capital of the company had been forwarded nor any serious proposal for merger had been made thereafter ¬Present merger with another company had also been initiated as late as on 14 12 2001 Time period of two years initially notified for enhancement of paid up capital of Insurance Companies i.e. 31 10 1999 had been further extended to 30 6 2001 Non compliance with statutory requirements could not be ignored for indefinite period ¬Company had failed to comply with statutory requirement and was unable to explore and execute successful means to achieve the required limit of paid up capital Appellate Bench of the Commission dismissed the appeal with observation that company could apply for licence once its paid up capital was enhanced in compliance of R.5(b) of the Rules, 2000. ORDER 1. This is an appeal against the order (impugned order), dated December 12, 2001 passed by the Executive Director, Specialized Companies Division (SC) of the Securities and Exchange Commission of Pakistan whereby the Executive Director imposed a fine of Rs.8, 700 on each of ten directors of Messrs Asian Leasing Corporation Ltd. (the "Company") for their failure to enhance paid up capital of the Company to Rs.200 million in compliance with the regulatory requirement of rule 5(b) of the Leasing Companies (Establishment and Regulation) Rules, 2000 and cancelled the licence of the Company…

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