Law: Companies Ordinance, 1984

Section: 196

Companies Ordinance (XLVII of 1984)--Ss. 208, 196 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Making investments in associated company and undertaking without special resolution---Imposition of penalties---Appeal to the Appellate Bench---Company in terms of S.208(1) of Companies Ordinance, 1984 was required to pass a special resolution before making investment in an associated company, but in the present case no such resolution was passed by the company---For the purposes of S.208 of the Companies Ordinance, 1984, the term 'investment' included 'loans', 'advances', 'equity' by whatever name called, or any amount, which was not in the nature of normal trade credit---Trade credit granted by the company to associated company could not be termed as "normal trade credit"---Company had admitted that it had given a credit period of up to 95 days to associated company---Abnormal trade credit given to associated company caused loss to the company as it could have sold the by-product in open market on advance basis---Company having failed to pass a special resolution in terms of S.208(1) of the Companies Ordinance, 1984 before making investment in the associated company, penalty was rightly imposed on the company. Societe Generale De Surveillance S. A. v. Pakistan 2002 SCMR 1694 ref. ORDER S. TARIQ ASAF HUSSAIN, COMMISSIONER (LD).---This order shall dispose of Appeal No.2 of 2010 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 26-11-2009 (the "Impugned Order") passed by the respondent. 2. Joint Venture Agreement ("JVA") was entered between Messrs Rogasa Holdings with Mehran Sugar Mills Limited and Mirpurkhas Sugar Mills Limited for setting up a joint venture company in the name of Unicol Limited ("Unicol"). Farhan Sugar Mills Limited (the "Company") purchased the entire shareholding of Messrs Rogasa Holding and stepped in as JVA partner in its place. 3. On examination of annual accounts of the company for the year ended 30-9-2008, it transpired that the company had made sales of Rs.213.178 million to Unicol. The Commission called information and…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492