This Order shall dispose of the proceedings initiated against M/S Adil Polypropylene Products Limited (hereinafter referred to as the "Company") and its directors for default made in complying with the provisions of Sub-section (1) of Section 158, Sub-section (1) of Section 245 and Sub-section
(1) of Section 246 of the Companies Ordinance, 1984 (the "Ordinance").
2. The underlying facts of this case briefly stated are that the Company was required to transmit to the members and simultaneously file with the Commission quarterly accounts for the quarters ended March 31, 2002, June 30, 2002, September 30, 2002 and December 31, 2002 and was further required to hold annual general meeting (AGM) on or before December 31, 2002 for the financial year ended June 30, 2002 in which it failed. Therefore three show cause notices of even number dated April 10, 2003 were issued to the company, its chief executive and directors calling upon them to show cause in writing as to why penalty as provided under Sub-section (4) of Section 158, Sub-section (3) of Section 245 and Sub-section (2) of Section 246 of the Ordinance may not be imposed upon them for the aforesaid contraventions. The notices addressed to Mr. Faisal Mehmood, Chief Executive and Mrs. Sharmeen Faisal, Director could only be delivered and all the other notices were received back undelivered either with remarks that the factory is closed and none of the persons having such names are there in factory or addresses have left the house.
3. In reply to the said show cause notices a letter dated April 26, 2003 signed by some anonymous person, on behalf of the company, received on April 28, 2003 wherein it was requested to postpone proceedings till June 2003 on arrival of the chief executive back in Pakistan since he was abroad at that time. However, the respondents failed to file any reply even till said date i.e. June, 2003.
Therefore, in order to give an opportunity of personal hearing the case was fixed for July 21, 2003, notices of which were sent to all directors most of which were delivered. However no one appeared on the date of hearing instead a letter signed by some director of the company, with out disclosing his name, was received stating that due to some unavoidable reasons the accounts for the year ended June 30, 2002 could not be got audited which resulted in delay in compliance of statutory provisions of law. It was further stated that the audit will be completed shortly therefore some time be allowed to undo the irregularities.
4. Keeping in view the fact that the respondents have failed to provide any tenable reasons for default, I am inclined to conclude that the defaults were intentional and willful. This apprehension is further strengthened by the fact that no one has appeared on the date of hearing, furthermore the company has not always been complaint to statutory provisions of law with regard to holding of AGM and circulation of accounts and its chief executive has also been penalized for the same in past. It appears that the directors of this Company have no respect to relevant provisions of the Ordinance and a lenient view taken in past while adjudicating such defaults has not given good results. The directors of the Company instead of becoming compliant to the provision of law appears to have been encouraged in taken the provisions of the Ordinance more lightly. It is also pertinent to mention that the penalties imposed previously have not even been deposited, which reflects the respondents' disregard for the law.
5. In the above circumstances it is established that the defaults under Section 158, Section 245 and Section 246 were intentional therefore impose fine on directors of this company as under: {{TABLE}} Name Mr. Faisal Mehmood, Chief Executive Mrs. Sharmeen Faisal, Director Mr. Muhammad Fayaz, Director Mr. Muhammad Zulqarnain, Director Sh. Zafar Hussain, Director Mr. Muhammad Mobeen, Director Mr. Muhammad Affan Hashmi, Director Total Section 246 31.03.02 30.09.02 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 17,500 17,500 Section 245 Section 158 31.12.02 30.06.02 5,000 10,000 5,000 10,000 5,000 10,000 5,000 10,000 5,000 10,000 5,000 10,000 5,000 10,000 35,000 70,000 Total 20,000 20,000 20,000 20,000 20,000 20,000 20,000 140,000 However, as the requirement of preparation of fourth quarterly accounts was done away through the implementation of Companies (Amendments) Ordinance, 2002 therefore, taking a lenient view, default for the quarter ended June 30, 2002 has been condoned.
6. The Chief Executive and directors of the company are directed to deposit the fine imposed upon them in the designated bank account maintained in the name of Securities and Exchange Commission of Pakistan with Habib Bank Limited within thirty days from the receipt of this order and furnish the receipted challan to the Commission.