Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Law: Securities and Exchange Ordinance, 1969

Section: 15A,15B(3)

Securities and Exchange Commission of Pakistan Act (XLII of 1997)--S.33---Securities and Exchange Ordinance (XVII of 1969), Ss. 15-A & 15-B (3)---Unauthorized insider trading---Effect---Appeal to Appellate Bench of Commission---Company had sold shares of its associated company---Before the execution of the transaction, books of accounts of the associated company were inspected and Directors of the associated company were Wormed regarding mismanagement of the books of accounts, unauthorized trading and overall poor financial credits of associated company-Appellants who were Directors and Chief Executive Officers of the companies were issued show-cause notice which was duly replied---In the impugned order Executive Director, directed the company to pay amount to the vendee--Objection was raised on part of the company that being a legal entity it had never been issued a show-cause notice, impugned order was passed without providing an opportunity of hearing to it, which was against the principles of natural justice---Record had shown that appellants who were Directors and Chief Executive Officers of the company, were sent notices of show-cause in their capacity as Directors of the company, it could safely be said that company being a corporate body/artificial person, was duly represented in the proceedings through its Directors---Since both the Directors constituted the entire Board of Directors, notice sent to the Directors was sufficient notice to the company---However, during the pendency of sow-cause notice, the term of offices of both the Directors of the company, expired and they no more represented the company---Both said persons continued appearing in their personal capacity to defend themselves against the show-cause notice, which had only been issued to them and not the company---Company, in circumstances was not being represented by any one in any capacity and impugned order was passed against the company ex parte---it would be appropriate to remand the case to the department, which was directed to issue a show-cause notice to the company and provide with an opportunity of hearing at the earliest. Dewan Salman Fibre Limited and others v. Government…

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