Law: Companies Ordinance, 1984

Section: 227

Companies Ordinance (XLVII of 1984)---Ss. 227, 229 & 476--Amount payable on account of staff provident fund---Failure to make payment to the fund---While examining the annual accounts of the company for relevant year, it transpired that company had not made payment to the staff provident fund in compliance with the provisions of S.227 of the Companies Ordinance, 1984---Object of provisions of S.227 of Companies Ordinance, 1984 which were clear and explicit, was to secure the amount of provident fund of the employees by the company and that fund was for the use and benefit of the employees only---Law required that all moneys contributed by the employees as well as the company's own contribution including the profit/interest thereon must be deposited in a separate bank account or invested in accordance with the provisions of S.227(1)(2) of Companies Ordinance, 1984---Where a trust had been constituted for that specific purpose, the company had an obligation to pay the employees provident contribution including its own contributions to the trustees within fifteen days from the date of collection---Law did not permit any company to utilize the funds of provident fund for its commercial purposes---Action was necessary under S.229 of the Companies Ordinance, 1984 which had provided punishment with a fine which could extend to five thousand rupees; however, taking into consideration the company's commitment for constituting the fund through a trust deed and assurance by the authorized representatives that all the moneys of the fund including mark-up accrued on the outstanding amounts of the fund would be transferred to the fund in accordance with the law, instead of imposing penalty on the Directors of the Company, warned them to observe in future the compliance of law in letter and spirit; and if any default of the provisions of Companies Ordinance; was observed in future, a stem action would be taken against them. ORDER ABID HUSSAIN, DIRECTOR (ENFORCEMENT).---This order shall dispose of the proceedings initiated against United Brands Limited ("the Company") through show-cause notice dated February 13, 2008 under the provisions of section 227 read with sections…

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