1. KHALID ALI Z. QAZI, J. - Through this instant petition under Section 305 of. The Companies Ordinance, 1984 petitioner seeks winding up of M/s. Interasia Leasing. Company Limited.
2. Notice of main petition for winding up was issued, notice was also affixed oh Court notice board as.
3. Per bailiff report, dated 10.5.2006 and 11 5.2006. Publication was also effected in newspaper namely Daily Jang and Dawn both dated 13.9.2007 and in the official gazette of Pakistan, dated 17.9.2007.
4. Notice as per requirement of law under Companies Ordinance. 1984 was also, issued to the Registrar, Joint Stock Companies upon service the Registrar filed his parawise comments on 7.6.2007.
5. It is, inter alia, contended that Interasia Leasing Company Limited (the company) was incorporated in Pakistan on 30.11.1992, as a public limited company and is listed on the Karachi and Islamabad Stock Exchanges. A copy of certificate of incorporation was filed alongwith the' petition as Annexure-A.
6. It is further mentioned in the plaint that the license to carry on leasing business was granted on 26.4.1993 and the certificate of commencement of business was obtained on 2.5.1993. The main business activity of the Company is leasing: Copy of Memorandum and Articles of Association filed as Annexure-B alongwith plaint.
7. It is further stated that the Company is classified as a non-banking finance company by the State Bank of Pakistan and is regulated by the Securities and Exchange Commission of Pakistan under the Non-Banking Finance Companies (Establishment and Regulation) Rules. 2003.
8. It is further contended by the petitioner that the Company is part of the long Term Venture Capital Limited group of companies, which managed and operated Bankers Equity Limited (hereinafter called "BEL").
9. It is stated by the petitioner that an 31.8'.1999, the State Bank of Pakistan took over the control of BEL, after discovering fraud in BEL's management and accounts. Subsequently an order for the winding- up of BEL was made by this Honourable Court.
10. It is, inter alia, contended that since the take over and subsequent liquidation of BEL the new management of the Company has faced problems. The Company's past association with BEL has contributed substantially to Its inability to attract fresh funds from financial institutions.
11. Accordingly, the Company was exposed to shortage, of working capital necessary to write fresh leases; Leasing which is the main objective for which the Company was set up, hence, ceased to exist. Leasing income was minimal and due to the provisions made against non-performing leases the equity of the Company became negative.
12. Copies of the Annual Accounts of the Company for the .Years 2003, 2004 and 2005 filed as Annexures-C, C-1, C-2 alongwith the plaint.
13. It is further contended that on 1.4 2003. In exercise of the powers conferred by Section 282-B of the Companies Ordinance, 1984, the Federal Government made the Non- Banking Finance Companies (Establishment and Regulation) Rules, 2003 (hereinafter called the NBFC Rules).
14. Learned counsel stated that in terms of Rule 5 of the NBFC Rules, all leasing companies were required to raise their equity to Rs. 200 million latest by 31.12.2003. Non- banking finance companies were also required to seek fresh licenses from the SECP in companies with the NBFC Rules.
15. Learned counsel also contended that the Company on 9.5.2003 submitted an application for grant of license in terms of Rule 5 of the Rules. The application was rejected, as the Company was equity deficient in terms of Rule 5(2) of the Rules. The date of rejection of the application is disputed and separate proceedings are underway at the Securities and Exchange Commission of Pakistan in this regard.
16. It is contended by the learned counsel that the Company initiated the process of merger with English Leasing Company Limited and for this purpose the scheme of arrangement approved by the Board of Directors in their meeting held on 26.4.2003 was filed Honourable Court at Karachi under Section 284 of the Companies Ordinance, 1984. However, during the year the Board of Directors resolved in their meeting held on 20.4.2005 that considering the circumstances and also due to negative equity of the Company the merger scheme With English Leasing Limited was not possible. Therefore, the merger petition was withdrawn from this Honourable Court which was confirmed by order of this Hon'ble Court dated 29.4.2005.
17. It is further contended that due to acute liquidity problems the Company operations are suspended since long. Due to these reasons leasing income has been minimal and due to the provisions made against nonperforming leases the equity of the Company has been adversely affected. The weak financial Position of the Company has contributed to its inability to attract fresh funds, which has resulted in a lack of working capital needed to transact fresh leases. The existing lease portfolio has dried up.
18. Learned counsel further stated that in accordance with the 2005 accounts of the Company, the Company has incurred accumulated losses of Rs. 17,36,91,618/r (2004:' Rs. 13,36,13,389/-) as against the paid-up capital and reserves of Rs. 12,88,84,872/- (2004 Rs. 12,898,84,872/=) which leaves the negative Share-holders equity of Rs. 4,48,06,746/- (2004: Rs. 47,28,517/-). Further more the current liabilities exceed the current assets by Rs: 4,48,06,746/-(2004: Rs. 66,26,845/-).
19. It is further stated by inter alia, that the current Board of Directors of the Company consists of the persons whose names are listed in annexure-D to this petition and the current Share-holders of the Company are listed in Annexure-E to this petition.
20. It is further urged that the current known creditors of the Company are listed in annexure-F to this petition and the details of all the known litigation is also filed as Annexure-G.
21. Learned counsel further urged that in the 13th Annual General Meeting-of the Share-holders of the Company, the Company has passed a special resolution authorizing its Board of Directors to initiate these winding up proceedings in this Honourable Court Mr. Abdul Ghafoor, the Chief Executive of the Company has been duly authorized by the Company to take all necessary steps and to sign .All necessary papers to file this petition.
22. Learned counsel has drawn my attention to Special Resolution filed as Annexure-H. learned counsel stated that the Company is in a loss and hence the Directors cannot execute a certificate of solvency for the purposes of a voluntary winding up. None of the creditors of the Company are willing to initiate a creditors winding up. Learned counsel further states that in view of the foregoing,, there is no option left to the Company but to file this petition for this Hon'ble Court to wind up the Company on the basis of it being just and equitable to do so.
23. Petition in terms of. The above is allowed and the said. Company namely M/s. Interasia Leasing Company Limited is wound-up by Court.
24. I have come to a conclusion that official liquidator be appointed to carry of the exercise of winding up of M/s. Interasia Leasing Company Limited under the provisions of Companies Ordinance, 1984.
25. Nazir is appointed as Official Liquidator to carry of the exercise of winding up of the Company.
26. Tentatively fee of the Official Liquidator is fixed at Rs. 1,50,000/- to be paid by the petitioner and after completing all exercise report to be submitted.