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September 25, 2002
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Wednesday
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Rajab 17, 1423
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Cabinet to approve amendments to cos ord
By Khaleeq Kiani
ISLAMABAD, Sept 24: The federal cabinet meets here on Wednesday to approve comprehensive amendments to the Companies Ordinance 1984, for effective documentation of listed and registered companies in the national economy.
To be presided over by President General Pervez Musharraf, the cabinet would also approve Banking Companies Ordinance 2002.
Official sources told Dawn that under amendments to the Companies Ordinance 1984, the government would allow establishment of single member registered companies. Existing law did not allow registration of companies which has less than one directors.
This would increase the number of companies in the country.
The amendment in section 208 of the Companies Ordinance 1984, would also allow listed companies to invest more than 30 per cent of their paid-up capital in the associated companies without seeking approval from the Securities and Exchange Commission of Pakistan.
The parent company would, however, have to disclose the details of investment to the shareholders before investing in the associated company.
The law would also make it mandatory for every company to have a full-time qualified company secretary. The law would also enable an applicant seeking transfer of shares to have a right to appeal in case the directors of the company refuse share transfer.
The proposed law would also increase penalties on auditors of the companies from Rs2,000 to Rs100,000 in case of negligence and misconduct. In the existing law, maximum penalties for misconduct was Rs2,000 that enabled the auditors to hide public information from the shareholders in connivance with the company directors and resulted in heavy losses to the general public.
The cabinet would also approve an official dress code for various local and international functions, besides setting up of a special fund for women in distress and detention.
The cabinet is also expected to approve amendments to contempt of court law under the Asian Development Bank’s access to justice programme.
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