ISLAMABAD, Oct 19: President Pervez Musharraf on Friday promulgated an ordinance allowing the federal government to amalgamate the Regional Development Finance Corporation and Small Business Finance Corporation into one company.

The ordinance called Regional Development Finance Corporation and Small Business Finance Corporation (Amalgamation and Conversion) Ordinance, 2001, provides that both the financial institution would be amalgamated and formed into limited company.

Within 90 days of the promulgation of the ordinance, the federal government would, in consultation with the RDFC and SBFC shareholders, form a public limited company, registered under the Companies Ordinance 1984.

The company will maintain existing deposits, continue lending and any other business which were being undertaken by the RDFC and SBFC.

All the permanent employees of the RDFC and SBFC, who were continuously in the service for a period of one year immediately before the effective date (date specified in the order) on the same term and conditions and would be subject to same rules and regulations as were applicable to them before the effective date.

All contracts subsisting or having effect immediately before the effective date to which the RDFC or SBFC might have been a party or beneficiary, would be deemed to have been made by the company.

After the registration of the company, the federal government would, by an order, direct that all the assets, contracts, liabilities, proceedings and undertakings of the RDFC and SBFC stood transferred to the company.

All proceedings by or against or relating to the RDFC or SBFC pending on effective date before the any court, tribunal, arbitrator or any other authority should be continued, prosecuted, defended, enforced, and executed by or against the company in the same manner and executed by or against the RDFC or SBFC as the case may be.

The order by the federal government would be required to specify, among other things, the following:

a) The transfer of all the assets, contracts, liabilities, proceedings and undertakings of the RDFC and SBFC to the company; b) the allotment of shares or debentures of the company to the shareholders, debenture-holders or bond-holders of the RDFC and SBFC in proportion to the their shares, debentures, bonds or their securities in the RDFC or SBFC as the case may be, after determining the net asset value of both the RDFC and SBFC on the effective date; c) the dissolution of the RDFC and SBFC from the effective date; and d) such incidental and consequential and supplemental matters as are necessary to secure the amalgamation and transfer under this ordinance.