THE Securities and Exchange Commission of Pakistan (SECP) recently informed all companies, professional institutes and trade bodies that statutory returns filed with SECP in some cases were contrary to the authorised signatory specified in the relevant returns.

It suggested a cumbersome way out: Quote: “Board of directors shall authorize persons to file return; the copy of resolution with copy of attendance sheet of directors who passed resolution shall be provided to SECP or Registration Office when any return is filed. The resolution shall not be older than one year” Unquote.

Why did the SECP allow unauthorised persons to file returns and take notice of this malpractice in 2017 after 33 years? The Companies Ordinance was promulgated in 1984. Why were such returns not rejected and returned there and then? A simple solution has been made complicated. A two-line directive would have been enough, “Henceforth if a return is filed by an unauthorised person, it shall be rejected”.

The format of the resolution to be passed by companies has been devised by the SECP as an annexure to Direction No 4 of 2017. An officer or consultant can also be authorised by companies to file returns. How can companies authorise an officer or consultant? Section 2 (vi) of the Companies (General Provision and Forum) Rule 1985 defines CEO, a director of the company and Secretary as a responsible officer. The commission by virtue of section 2 (vi) (d) of above rules may in writing declare any other officer as a responsible officer. But so far no other person except the three has been authorised by the commission.

The companies act to authorise the officer or consultant shall be in violation of the section referred to above. Interestingly in paragraph 3 of Direction No. 4 it is stated that a return shall be authenticated by an officer as defined under the ordinance.

It is suggested that law-abiding companies be not penalised for the act of a few companies. The SECP should withdraw Direction No 4.

T. U. Ansari

Karachi

Published in Dawn, March 27th, 2017