Law: Companies Ordinance, 1984

Section: 158

Companies Ordinance (XLVII of 1984--Ss. 158, 233, 245, 265 & 277---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Irregularities and non-compliance of certain provisions of Companies Ordinance, 1984---Investigation in the matter--Appeal---Show¬-cause notice was issued to appellant company' which was duly registered as Investment Company with regard to certain irregularities and violation of certain provisions of Companies Ordinance, 1984 by the said company---Securities and Exchange Commission was entrusted with powers under S.265 of the Companies Ordinance, 1984 to appoint an Inspector, if it was satisfied that any of the conditions set out in sub-clauses (i) to (vii) of S.265(b) of the Ordinance, were met---Appellant company in response to the show-cause notice could not deny the factual allegations levelled against it---Appellant company in fact responded to the show-cause notice by raising irrelevant and immaterial arguments---Contention that Commission could not suo mote initiate action under S.265 of the Companies Ordinance, 1984, was repelled as Commission as a regulator, was obliged to look into the affairs of the entities it regulated to ensure that their affairs were not being managed in a manner, which would deprive its members of reasonable return on their investment; the affairs of the company were managed in accordance with sound business principles in prudent commercial practices; and that the financial position was not such as to endanger its solvency--Apart from other functions, Commission was required to perform to meet the various objectives of the law---Provisions of S.265 of the Companies Ordinance, 1984 had clearly given the Commission the powers, it had sought to exercise in the case---No cogent grounds were available to stop the investigation ordered by the Commission---Where an investigation was ordered by the Commission itself cost ought to be initially defrayed by it and could later be recovered from the company under S.277 (1)(c) of the Companies Ordinance, 1984---Impugned order was modified to the extent that investigation would be conducted by a team comprising of authorized officers of the…

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