Securities and Exchange Commission of Pakistan (SECP) orders probe into Shaheen Pay TV affairs
ISLAMABAD- The Securities and Exchange Commission of Pakistan (SECP) has appointed an inspector to look into the affairs of Shaheen Pay TV (Pvt) Ltd.
Shabeen Foundation PAF in its complaint had alleged that the company had not held any annual general meeting since 1996 and violated several provisions of the Companies Ordinance I 984.
The Commissioner Companies Law, Abdur Rahman Qureshi, has appointed Nauman Mahmood of Avais Hyder Zaman Rizwani, chartered accountants, as inspector under section 263 of the Companies Ordinance 1984. He will submit his report within 30 days. Mohammed Ali Pasha is the chief executive of the company. Its one of the directors, Javed Pasha, is away from the country since the Benazir government was dismissed. In its complaint, Shaheen Foundation stated that it was induced to make heavy investment of Rs 12.5 million, one-fourth of the paid-up capital of Rs 50 million of the company.
The applicant alleged that it was kept in the dark about the financial affairs of the company conducted in a highly unprofessional manner. It was further alleged that no proper books of accounts were maintained and, despite repeated requests, no information was supplied to the Foundation in this regard.
It was further alleged that, among other things, no annual general meeting of the company was held since 1996. Even its accounts were not audited nor was the board of directors properly constituted. Abdur Rahman Qureshi, Commissioner, Companies Law, asked the company to reply to various allegations.
The company admitted the violation of law but denied fraud, mala fide intentions or bad faith. It precludes the applicant from recourse to relief under section 263 of the Companies Ordinance. The Commissioner held hearing on June 13 and Syed lqbal Haider, former Law Minister of Pakistan Peoples Party (PPP) government, appeared on behalf of the applicant.
He highlighted the defaults of the company management in handling the affairs, outflow of even paid-up capital, absence of the chief executive from the country and violations in observance of relevant provisions.
The counsel for the respondent, Kaleem Ahmed, challenged the maintainability of the application saying that the applicant being a trust had been an investor consequent upon a contractual agreement which puts the parties under legal obligation to seek resolution of their disputes from arbitration recourse or through a civil court. He admitted the violation of corporate law in observance of rules of business but “it was due to peculiar circumstances and compelling reasons.” He maintained that the accounts of the company were properly maintained and were got audited and approved by the shareholders.
Abdur Rahman Qureshi in his order said that, after hearing both sides, he was of the view that the applicants have a right to approach the Commission under section 263 of the Companies Ordinance 1984.
“It is an admitted fact that directors of the company failed to hold its overdue annual general meetings and to present therein its annual audited accounts. “Though annual accounts for the years ended 30.6.97 and 30.6.98 were got audited on June 28,1999, these were required to be finalised and presented to the general meetings which was not done in time.
“Furthermore, the management of the company is not available in the country and Chief Operating Officer, for whom there is no provision in the Companies Ordinance, manages its whole affairs.”
The commissioner observed that due to mismanagement, the creditors and investors of the company ware suffering. In the absence of any effective system of accountability and audit, there are apprehensions that the funds of the company might have been misappropriated. “I, therefore, find it a fit case for appointment of inspector because admittedly mandatory provision of the Companies Ordinance have been violated.”
Source: Business Recorder