| Case ID |
251d3f8c-d79a-41a9-a735-1a8f0a673e47 |
| Body |
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| Case Number |
Show-Cause Notice No.EMD/233/106/2002-4122 |
| Decision Date |
Dec 02, 2008 |
| Hearing Date |
|
| Decision |
The Securities and Exchange Commission of Pakistan imposed a fine of Rs. 700,000 on the directors of Data Textiles Ltd. for unauthorized reduction in property, plant, and equipment, and disposal of fixed assets without obtaining the requisite approval from the general meeting of shareholders. The decision emphasized the need for compliance with the provisions of the Companies Ordinance, 1984, particularly sections 196 and 476. The commission noted that the directors failed to clarify their position regarding compliance, which warranted stern action. The penalty was divided among the directors based on their responsibility, with individual fines imposed for contravening the ordinance's provisions. No penalty was levied against Mr. Raja Ashfaq Hussain as he had resigned prior to the transaction. |
| Summary |
This case revolves around the unauthorized actions of the directors of Data Textiles Ltd. concerning the significant reduction and disposal of the company's fixed assets. The Securities and Exchange Commission of Pakistan took action against the directors based on findings that they had failed to secure necessary approvals as mandated by the Companies Ordinance, 1984. The commission found that the company had reduced its property, plant, and equipment substantially without shareholder consent, leading to a fine of Rs. 700,000 imposed on the responsible directors. This case highlights critical compliance requirements regarding corporate governance and the responsibilities of directors in managing company assets. The decision reinforces the importance of adhering to legal frameworks governing corporate transactions, particularly in matters of asset disposal and shareholder engagement. It serves as a reminder for directors to ensure transparency and compliance to protect both the company's interests and their personal liability under the law. |
| Court |
Securities and Exchange Commission of Pakistan
|
| Entities Involved |
Securities and Exchange Commission of Pakistan,
Data Textiles Ltd.
|
| Judges |
Abid Hussain
|
| Lawyers |
Messrs Rafaqat Mansha Mohsin Dossani Masoom & Co.,
Muhammad Mansha,
Mohsin Nadeem
|
| Petitioners |
Not available
|
| Respondents |
Data Textiles Ltd.,
Mr. Raheel Akhtar,
Mr. Nadeem Zar,
Mr. Raja Ashfaq Hussain,
Mr. Shamim Ahmad Khan,
Mr. Umar Sadik,
Mr. Asif Rahim Khan,
Mr. Muhammad Ayub Khan,
Mr. Shahid Saleem
|
| Citations |
2009 SLD 164,
2009 CLD 548
|
| Other Citations |
M. Shahid Saigol vs. Kohinoor Textile Mills Limited, PLD 1995 Lahore 264,
Bamford V. Bamford, (1970) Ch 212 : (1969) 1 All ER 969 (CA)
|
| Laws Involved |
Companies Ordinance, 1984
|
| Sections |
196,
476
|