This Order will dispose of the proceedings initiated under Section 224(4) of the Companies Ordinance, 1984 ("Ordinance") by the Securities and Exchange Commission of Pakistan ("Commission") through Show Cause Notice No. S.M(13.0)C.0.222/4(2497)11 dated 30/12/2013 ("Notice") issued to Mr. Muhammad Asghar ("Respondent"), Director of Bilal Fibres Limited ("Issuer Company").
2. The facts of the matter leading up to aforesaid Notice are that the Issuer Company is a public listed company and the Respondent being its Director was required to file return of beneficial ownership on Form 32, within the period stipulated under Section 222 of the Ordinance. However, he failed to discharge the said obligation which attracts penal provision contained in Section 224(4) of the Ordinance.
3. Section 222(2)(c) of the Ordinance stipulates the period within which the Form 32 is required to he submitted as under:- "where there is any change in the position or interest as aforesaid including a change in the beneficial ownership of any equity, security, within fifteen days of such change-.
4. The Respondent, in response to this office letter dated 31/05/2013, filed return of beneficial ownership on Form 32 showing therein sale transaction of 1,319,061 shares made on 18/01/2012, with delay of 501 days, in contravention of Section 222(2)(e) ordinance. The said contravention prima facie attracts penal provision contain in Section 224(4) of the Ordinance, which provides as under:- "Whoever knowingly and wilfully contravenes or otherwise fails to comply with any provision of section 222, section 223 or section 224 shall he liable to a fine which may extend to thirty thousand rupees and in the case of a continuing contravention, non-compliance or default to a further fine which may extend to one thousand rupees for every day after the ,first during which such contravention, non-compliance or default continues".
5. The Commission took cognizance of the aforesaid default and issued Notice to the Respondent under Section 224(4) of the Ordinance, calling upon him to explain through written reply along with documentary evidence, if any as to why action may not be taken against him pursuant to Section 224(4) of the Ordinance, for aforesaid contravention of Section 222 of the Ordinance.
6. In order to provide an opportunity of being heard in person, hearing in the matter was fixed for 14/01/2014 at Commission's Head Office, Islamabad, which was rescheduled for 22/01/2014. On the given date Mr. Gui Sher, (Authorized Representative) appeared before me on behalf of the Respondent and also filed written reply to the Notice duly signed by the Respondent. The submissions made in writing as well as verbally on behalf of the Respondent by the Authorized Representative during the course of hearing be summarized as under:- a) Due to oversight, the Respondent failed to file the return for the said change in beneficial ownership within the stipulated time limit. b) The aforementioned change in beneficial ownership has been reported to Company Registration Office, Lahore. c) The omission will not be repeated in future. d) The Authorized Representative requested to condone the delay, with the plea that the same was committed unintentionally.
7. I have considered the aforesaid written submissions made by the Respondent. The Respondent has admitted the default of late filing of the return of beneficial ownership with the contention that the said default was not committed wilfully. But, the Respondent did not elucidate the circumstances on account of which, he was unable to file Form 32 for the under reference changes in beneficial ownership, within the stipulated time limit. The record of this office showed that the Respondent is Director of the Company since 2008. Thus, it is evident that the Respondent was fully aware about his liability of filing of the returns of beneficial ownership, but he failed to do so within the stipulated time period. In my opinion, the Respondent has contravened the provisions of Section 222 of the Ordinance. Hence, in the light of aforesaid discussion, I am of the view that the Respondent has committed the violation. However, taking a lenient view of the default, in exercise of powers conferred under Section 224 (4) of the Ordinance, I hereby impose a fine of Rs. 15,000/- (fifteen thousand rupees only) on the Respondent.
8. This Order is issued without prejudice to any other action that the Commission/Registrar may initiate against the Respondent in accordance with the law on matter subsequently investigated or brought to the Notice of the Commission,