| Case ID |
2e5d3653-5d6f-4125-994c-9ae9f7f2c1f9 |
| Body |
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| Case Number |
Appeals Nos. 13, 14 and 15 of 2007 |
| Decision Date |
Mar 01, 2012 |
| Hearing Date |
|
| Decision |
The decision revolves around the compliance of Crescent Steel and Allied Product Limited with the provisions of the Companies Ordinance, 1984, specifically Section 208, which mandates that investments in associated companies must be authorized by a special resolution. The Commission found that the investments made by the company were not in accordance with the resolutions approved by the shareholders. Consequently, a penalty of Rs.100,000 was imposed on the Chairman, Chief Executive, and Executive Director of the company for their failure to obtain the necessary approvals. However, the decision also noted that the penalty was waived, and the officials were reprimanded with a warning to adhere to the legal requirements in future dealings. The Commission emphasized the importance of compliance with shareholder resolutions to maintain corporate governance and accountability. |
| Summary |
The case involves Crescent Steel and Allied Product Limited's alleged violations of the Companies Ordinance, 1984, specifically regarding unauthorized investments in associated companies. The Securities and Exchange Commission of Pakistan scrutinized the investments made by the company in Altern Energy Limited, highlighting that these actions lacked the necessary approvals from shareholders as stipulated in Section 208 of the Ordinance. The case underscores the significance of adhering to corporate governance standards and the legal framework guiding investments in associated entities. It also brings to light the penalties imposed for non-compliance and the necessity for companies to ensure transparency and accountability in their financial dealings. The decision serves as a precedent emphasizing that investments must be duly authorized through special resolutions to avoid penalties and uphold the integrity of corporate operations. |
| Court |
Securities and Exchange Commission of Pakistan
|
| Entities Involved |
Crescent Steel and Allied Product Limited,
Altern Energy Limited
|
| Judges |
MUHAMMAD ASIF ARIF, COMMISSIONER (INSURANCE),
IMTIAZ HAIDER, COMMISSIONER (SMD)
|
| Lawyers |
Dr. Pervez Hassan,
Majid Jehangir,
Amina Aziz,
Ayesha Riaz
|
| Petitioners |
S.M. EHTISHAMULLAH AND 2 OTHERS
|
| Respondents |
EXECUTIVE DIRECTOR (ENFORCEMENT)
|
| Citations |
2012 SLD 1325,
2012 CLD 1835
|
| Other Citations |
2010 CLD 75,
2010 CLD 36,
2006 CLD 1055,
2008 CLD 17,
2009 CLD 1639,
2006 CLD 1150,
2009 CLD 65,
2008 CLD 786,
2006 CLD 458,
2008 CLD 809,
1990 CLC 1008,
1984 CLC 2456
|
| Laws Involved |
Companies Ordinance, 1984,
Securities and Exchange Commission of Pakistan Act, 1997
|
| Sections |
208,
33
|