Law: Companies Ordinance, 1984

Section: 208,476

Companies Ordinance (XLVII of 1984)--Ss. 208 & 476---Making investment in associated company without prior approval of shareholders---Imposition of penalty---Company granted advance to its associate company without approval of its shareholders in the general meeting as required under provisions of S.208 of Companies Ordinance, 1984---Approval of share-holders of the company being necessary before grant of such advance/investment and that approval having not been obtained, provisions of S.208 of Companies Ordinance, 1984 had been violated and Directors of the Company . were liable for the penalties as defined in subsection (3) of S.208 of the Ordinance---Share-holders and regulatory bodies should be provided correct and timely information with all fairness, but the Directors of the Company had tried to conceal the correct information front the share-holders and the Commission with regard to said advance/investment given to associate company---Directors of the Company, in circumstances deserved no sympathy on that account, however, keeping in view the track record of the company, instead of imposing maximum fine, an aggregate penalty of Rs.600,000, Le. Rs.100, 00,000 each to six Directors was imposed who involved themselves in such an illegitimate transaction---Said penalties were imposed on the Directors in their personal capacity and they were required to pay said amount from their personal resources.ORDER TARIQ MAHMOOD, EXECUTIVE DIRECTOR (ENFORCEMENT).---This order will dispose of the proceedings pertaining to contravention of the provisions of section 208 of the Companies Ordinance, 1984 (hereinafter referred to as "the Ordinance"), which has arisen out of the Show-Cause Notice No.EMD/233/363/2002 dated September 15, 2006 served on all the directors including the Chief Executive of Shakarganj Mills Limited (hereinafter referred to as "Shakarganj"). 2. Shakarganj, is a public company limited by shares incorporated on September 20, 1967 having authorized capital of Rs.1,300 million divided into 80 million ordinary shares, of Rs.10 each and 50 million preference shares of Rs.10 each and paid up capital of Rs.579.365 million divided into 57.936…