Law: Companies Ordinance, 1984

Section: 263

Companies Ordinance (XLVII of 1984)--Ss. 263, 264, 279 & 290---Securities and Exchange Ordinance (XVII of 1969), S.33---Appointment of Inspector to investigate affairs of Company---Appeal against such appointment---Respondents Nos.2 and 3 who were share-holders of Company holding 35% shares in it, alleged administrative, corporate as well as financial mismanagement on part of management of Company and filed petition under S.290 of Companies Ordinance, 1984 for appointment of Inspector to investigate affairs of the company---Local Commission duly appointed on direction of High Court, also recommended that a detailed inquiry needed to be conducted through an investigation agency---Record produced, facts, history of the case and allegations exchanged between parties, had confirmed High Court's decision that matters of Company required detailed examination Examination of record, witnesses and evidence, could not be done by a Court or an officer sitting in adjudication---It required time, effort, knowledge of corporate laws and internal workings of a company, investigative expertise and skills and most of all a fair and independent assessment of disputes---Allegations levelled by parties included financial and administrative irregularities as well as contravention of Rules and Regulations which would come within the jurisdiction of commission---Contention of appellant that Executive Director (CLD) had not been delegated powers to appoint Inspector under S.263 of Companies Ordinance, 1984, was repelled as said power had clearly been delegated by Commission through S.R.O. 1061(1)/2005 dated 18-10-2005---Contention of appellant that respondents Nos.2 and 3 did not hold 10% voting power in the company and could not apply for appointment of Inspector, was also untenable---Commission on facts on record was satisfied that case was fit for appointment of Inspector---Remanding case on a mere procedural issue, would waste further time which could affect the right of innocent parties and would amount to impeding implementation of orders of High Court---Impugned orders appointing Inspector, was upheld---Department, however was directed to involve Fraud Investigation Unit of…

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