' IJAZ UL AHSAN, J.---Through this constitutional petition, the petitioner seeks a declaration that appointment of M. Yousuf Adil Saleem & Co. (MYASCO) a firm of Chartered Accountants as external auditors of the Bank of Punjab is illegal and invalid. A direction is sought to the Bank of Punjab to appoint some other firm of Chartered Accountants with credible standing as external auditors, which is duly QCR rated and fully in compliance with the statutory requirements for carrying out the financial audit of the Bank of Punjab for the financial year ending 2012. A direction is also sought to respondent No,4 Securities and Exchange Commission of Pakistan (SECP) and respondent No,5, state Bank of Pakistan to remove the name of MYASCO from the panel of Chartered Accountancy Firms qualified for audit of listed entities and financial institutions.
2. The facts in brief necessary for the purpose of this petition are that the petitioner claims to be a minor shareholder of the Bank of Punjab, respondent No,
1. It is alleged that respondent No,1 has appointed MYASCO as its external auditors in violation of the listing regulations of the Stock Exchanges, Code of Corporate Governance and the regulations issued by the State Bank of Pakistan relating to categorization of the firms of Chartered Accountants for undertaking external audit work of banking companies. It is submitted that in order to protect the interests of shareholders/depositors and public at large, the relevant statutes have incorporated stringent requirements and criteria for appointment of auditors which have been violated by the Bank of Punjab by appointing MYASCO as its External Auditor.
3. The learned counsel for the petitioner submits that being a listed company, Bank of Punjab is required to appoint only a firm of Chartered Accountants which has been given satisfactory Quality Control Review (QCR) by the Institute of Chartered Accountants of Pakistan (ICAP) and meets the criteria established by the State Bank of Pakistan for inclusion in the panel of auditors. This requirement is also mandatory under the listing regulations of Stock Exchanges and the Code of Corporate Governance issued by SECP adopted by the Stock Exchanges. It is argued that despite the fact that QCR rating of MYASCO has been held in abeyance until October 31st, 2012 consequent to legal complications arising from the review of all of its offices, the said firm has been appointed as its External Auditor by the Bank of Punjab. According to the learned counsel the partners of MYASCO are also locked in litigation against each other which is pending before various courts of competent jurisdiction. The said firm is therefore in no position to undertake the serious work of acting as external auditor_ of a Bank which is already reeling under scandals of misappropriation and mismanagement. He finally argues that the firm has been appointed for extraneous consideration by ignoring all relevant rules, regulations and laws on the subject.
4. I have heard the learned counsel for the petitioner at length and have also gone through the record. The main question requiring determination by this Court is "Whether in the facts and circumstances narrated above, this Court is required to interfere in this matter in exercise of its constitutional jurisdiction?" On hearing the learned counsel for the petitioner and examination of the relevant laws, rules and regulations on the subject, the answer has to be in the negative for the following reasons:-
(a) Admittedly MYASCO was appointed as the external auditor of the Bank of Punjab by the Board of Directors of the said bank. Bank of Punjab is a listed company and its Board of Directors acts in a representative capacity. If at all the Board of Directors has acted illegally or in violation of the rules, the remedy of the petitioner lies in approaching the A regulator i,e, SECP by bringing to its attention that the Board of Directors and the Annual General Meeting were not informed of the material which is allegedly available against MYASCO that disentitles it from being appointed as external auditor. I have asked the learned counsel for the petitioner if the petitioner has moved any application with the SECP. It appears that the petitioner has not done so.
(b) The petitioner also alleges that failure of an auditing firm in securing a satisfactory quality control review after every two years from ICAP can lead to its category being down graded or it being de-listed by the State Bank of Pakistan. Therefore, in addition to the remedy available to the petitioner to approach SECP, another avenue available to the petitioner is to approach the State Bank of Pakistan (which is the regulatory authority for all banks) to point out the alleged illegalities and irregularities and violation of its circulars committed by the Bank of Punjab in appointment of MYASCO as its external auditor. This avenue has also not been explored by the petitioner.
(c). ICAP, and its Quality Assurance Board regulate auditing and accounting profession in Pakistan which inter alia includes Standard Setting, Quality Control and Investigation. Quality Assurance Board is an independent body set up by ICAP as per its framework of Quality Control Board Review Program. Admittedly it has 14 members and is tasked to ensure adherence to various standards by firms of auditors and to review and confirm the Quality Control rating of firms of auditors. In case there is any ambiguity in the QCR rating of the firm, the petitioner is at liberty to approach ICAP as well as its Quality Assurance Board to seek clarification of the status of MYASCO. This approach also appears to have been avoided by the petitioner.
(d) Surprisingly enough, the petitioner has not impleaded MYASCO as one of the parties to this petition. It may be noted that the said firm was a, necessary party to this petition in view of the fact that any order passed by this Court would have directly affected the said firm.
(e) Admittedly, there are a number of specialize regulatory authorities present before whom, the petitioner could have agitated the matter and pointed out alleged illegalities which according to him have been committed in appointment of external auditors of the Bank of Punjab. The said regulators have adequate and sufficient powers available to them under the respective governing statutes to take cognizance of the matter and pass such orders as may be necessary under the law, rules and regulations.
(f) Even otherwise, the allegations made in the petition need a factual inquiry, which cannot be undertaken in exercise of extraordinary constitutional jurisdiction of this Court. Specialized Agencies and regulators which are available under the law are more suited to undertake such exercise and pass appropriate orders.
(g) It may also be noted that annual report of the Bank of Punjab and the statement of financial position of the said bank as on 31-12-2011 is due on 31-12-2012. Declaring the appointment of external auditors as illegal and invalid at this stage and appointing another external auditor at the far end of the year on the basis of material placed before this Court, would neither advance the ends of justice nor would it benefit the shareholders/depositors of the Bank of Punjab. Should the petitioner consider it necessary and approach the aforenoted regulatory authorities, they have the requisite powers to take such remedial actions if necessary as may be advisable under the law considering the facts and circumstances of the present case.
(h) This petition also suffers from laches as the petitioner has chosen to remain quite since the last AGM when the Board of Directors appointed MYASCO as External Auditors of the bank.
(i) Finally, I am not entirely satisfied about the locus standi of the petitioner to maintain this petition and invoke the extraordinary constitutional jurisdiction of this Court.
5. For reasons recorded above, interference in the matter in exercise of extraordinary constitutional jurisdiction of this Court is declined. The petitioner may, if so advised, approach the regulatory authorities in appropriate proceedings. If and when this is done, this Court is sanguine that the regulatory authorities shall examine the matter and act strictly in accordance with law in an expeditious manner.
6. .