ISLAMABAD, Jan 7: The Securities and Exchange Commission of Pakistan (SECP) on Monday organized a round-table conference to finalize the amendments in the Companies Ordinance, 1984.
Three and half hour in-depth discussion was held between over two dozen experts from different related fields.
The participant, who had come fully prepared for the conference, evinced keen interest in the discussion and made valuable comments and suggestions, says a press release issued by the SECP here.
The SECP has undertaken a comprehensive review of the Companies Ordinance, 1984 which was long overdue as it was found lacking in many respects to meet the current problems of the Industry in the changed scenario.
For this purpose the SECP had appointed a Committee in January 2001, which reviewed the 1984 Ordinance thoroughly and suggested a lot of amendments including the following:-
i) A new concept of single member private company is proposed to be introduced to admit the individual business in the Corporate Sector.
According to it, an individual trader or manufacturers would be able to form a company having its own separate entity and limited liability.
This new concept would not only be beneficial to the investors but also go a long way in the expansion of a disciplined Corporate Sector. The concept of single member companies is working successfully in UK (Section 15).
ii) According to the existing provisions of law, the promoters who want to establish public companies are facing difficulties in associating other persons in the list of promoters and directors just to complete the requirements of minimum seven.
The proposed amendments would enable the promoters to establish public companies with a minimum number of three members/directors. (Sections 15/174).
iii) The conditions and restrictions imposed under the existing provisions were considered too harsh, causing negative impact on the business of sister concerns incorporated by one industrial group.
According to the proposed amendments, the maximum limit of 30 per cent of the paid-up capital plus free reserves of the investing company has been removed and the role of the regulator to grant waiver to certain companies has been done away with.
Members of a company may now be able to make final decision through special resolution, after having full disclosure of the investments.(Section 208).
iv) Removal of auditors has remained disputed and question has always been raised whether auditors can be removed or not. Now the provisions for removal of auditors are being provided through which a company may remove its auditors through special resolution.
However, appointment of auditors in place of removed auditors will be made with the approval of the Commission. (Section 252).
The SECP released the amendments proposed by the Committee to the Press and professional bodies in November 2001 to elicit their comments/ views.
The public as well as the professional bodies responded enthusiastically and a lot of suggestions/comments were received from various quarters.
To ensure further the usefulness of the amendments the SECP decided to have a threadbare discussion on these points at a conference of the experts.
The conference was chaired by the Chairman, SECP, Khalid A. Mirza.
The Chairman, SECP, while explaining various points and queries raised by the participants, thanked them for their participation and keen interest in the discussion.
He especially thanked Dr. Tariq Hassan Khan, Advisor to Finance Minister, Masud Naqvi, Chartered Accountant and Dr. Parvez Hassan, Advocate for their valuable views.
The chairman assured the participants that he would make full use of the valuable comments put forward by the participants to make the Ordinance a really effective piece of law.—APP