KARACHI, Jan 5: The Securities and Exchange Commission of Pakistan (SECP), under Circular No 8 of 2001, dated December 31, 2001, has announced the amnesty to the non-listed public and private companies, who may have defaulted in filing the statutory returns (forms) within a prescribed period of three months. The SECP chairman, Khalid Mirza, had also announced the scheme at a press conference in Karachi last Monday.

The newly announced scheme to be known as ‘Companies Regularization Scheme’ will be effective from Jan 1, 2002 to March 31, 2002, and would apply to defaults committed up to Dec 31, 2001, a senior corporate consultant said.

He said that the SECP has come out with this scheme after noting that a number of companies have defaulted in filing the statutory returns (forms) within the prescribed period.

The commission in order to encourage the defaulting companies to come forward and regularize their documents/forms announced this scheme under which they will be entitled to get their returns accepted only on payment of additional fee equal to normal and specified amount of fee.

The Companies Ordinance, 1984, provides for a number of statutory returns (forms) which the companies are required to file with the Registrar of Companies within the specified period together with payment of prescribed amount of filing fee.

The Section 469 of the ordinance particularly lays down: “where any documents required or authorized by or under this ordinance to be filed with the Registrar within a specified period is presented after the expiry of such period, the Registrar may, on payment of such additional fee not exceeding three times the amount of specified fee, accept the same.”

Besides, the ordinance also carries provision which includes heavy amounts of fines and prosecution of the management leading to imprisonment of the defaulting directors or officers.

Consequently, a large number of companies (non-listed) public and private had been avoiding to rectify their default on fear of payment of heavy amount of fee, apart from other penalties.

A number of statutory returns (forms), including Form ‘A’ declaring names of shareholders, chief executive, directors, company secretary, legal advisors, auditors, etc., are required to be submitted with the Registrar of Companies within the specified period along with fee. Similarly, Form 29 and Form 3 are required to be filed in case of change in shareholding and increase in capital, respectively.

The scheme has been widely appreciated by companies as well as tax consultants. Some, have however, noted with dismay the harsh words used by the SECP in its fourth paragraph of the concerned circular.

The commission while concluding the scheme in paragraph four stated: “All the non-listed public companies and private companies are advised in their own interest to avail of the opportunity of complete absolution from their guilt for violating the statutory provisions of the Companies Ordinance, by filing the overdue returns as soon as possible but not later than March 31, 2002.”

A tax advisor Ali Rahim talking to Dawn said that the commission should have used a more polite language, particularly where a large segment of corporate sector was involved.