LAHORE, April 27: The government must amend the monopoly laws to do away with the archaic restriction, requiring a private or public company with fixed assets worth Rs50 million or more to register itself with the Monopoly Control Authority (MCA) “should an individual or a family hold 50 per cent or more shares in it”, say businessmen and corporate law experts.

“This restriction is inconsistent with the government’s policy to promote and encourage investment in the country as it subjects businessmen to unnecessary harassment by MCA functionaries,” said a corporate lawyer here on Tuesday. “It is also inconsistent with the Companies Ordinance, 1984, and does not, and cannot, help the government head off what the officials say undue concentration of wealth,” he said.

He insisted that the companies’ ordinance allowed an individual to set up a private company with an unlimited capital. On the one hand, he contended, certain laws were so liberal and on the other hand another law was so conservative.

The restriction, he added, “was imposed by the then government in the Monopolies and RTP Ordinance, 1970 for a purpose which has long lost its relevance, i.e., “to break the so-called 22 richest families that controlled a major chunk of the country’s wealth at that time.” He said there was no need to have this restriction at all in the presence of another provision which requires a company controlling 20 per cent or more market share in goods or services to get itself registered with the MCA.

A former Lahore Chamber of Commerce & Industry president added that the government should have checks and balances, but “refrain from supporting laws that subject shareholders to harassment”. He said the investors were harassed through threats of penalties and notices from the MCA every two or three months.

This particular restriction, he said, “has no other purpose in the changed circumstances but to block the growth of business and creation of wealth.”

He said the government plans to amend the monopoly laws before the budget for the next financial year. “It is high time that the condition of registration with the MCA is also abolished as it is vitiating the investment environment in the country,” he said. He added other changes in the law would be useless if this condition was not done away with. “The aim of the law must be to facilitate business growth and wealth creation and not hinder its growth.”

The lawyer said there was “no need to subject corporate sector to such restrictions as it is documented in each and every respect.”

“There are other ways by which the government could ascertain the wealth of an individual or a family. Then why insist on having this particular restriction?”

Another businessman also called for reviewing and changing the outdated definition of the family unit in the law.

“At present, the family means husband and wife, their children, parents, siblings, lineal ascendants, lineal descendants, etc.

Even if all of them control 50 per cent or more shares in a company with fixed assets worth Rs50 million or more, they are considered one single unit and are required to get registered with the MCA under the law. We need to review this definition of the family,” he said.