This Order will dispose of the proceedings initiated against Mr. Pen-Ve7 Ahmed for being appointed as a director in /IS. Industries Limited ("Company"), a listed company and also engaged in the business of brokerage in contravention of the provisions of Section 1870) of the Companies Ordinance, l984 (the "Ordinance")
2. The brief facts of the case are that it was noticed that Mr. Pervez Ahrnad, in addition to being a director in the Company was also serving as a direct& in following companies engaged in the brokerage business: i. Pervez Ahmed Securities Limited ii. Ali Pervez Capital (Pvt) Limited iii. Pervez Ahmed Capital (NI) Limited
3. Mr. Pervez Ahrriad, prima facie. contravened the. aforementiortud provision of the law and consequently a Show Cause Notice ("SC. ') under Section 189 of the Ordinance dated January 2.
2009 was issued to him in order to explain in writing as to why penaity may not be imposed on hiin as per law_ On January 30, 2009, the Company held El fresh election of directors in which Mr_ Pervez. Ahniad was again elected Its a director. Mr. l'ervez Ahmad en aged Cornelius Lane and Murli.
Advocates (-Counsel-) in the matter. The Counsel mice requested For extension in time to file the reply to the SCN which was duly provided by the Commission. COUJISCI subsequent] filed the reply on February 25 2009. ft .was stated therein that at the time of appointment of Mr. Pervez Ahmad BS a director in the Company_ he was not engaged in the buSiness of brokerage. The reply was not found satisfactory and therefore_ in order to provide an opportunity of personal hearing, the matter was initially fixed for March 3 2009 which was. on the Counsel's request, adjourned three more times and finally the hearing was held on April 30. 2009.
4. On the date of hearing Mr. Waleed Khal id, Advocate represented on behalf of Mr. Pervez He presented same arguments as were provided earlier; it was argued h) him that Mr. Pervez Ahmad was not a member of a stock exchange or in a business- of brokerage at the time of his appointment as a director of the Company and as such there was no contravention of the law.
When a quer). was raised to hint as to why Mr. Pervez Ahrnad has once again been elected as a director in the election of directors hold fr,. the Company on January 30. 2009, he replied that he will submit a rcpt} to that after consult* Mr. Pcrvcif Ahmad. A Second hearing was fixed for June IS, 2009 which the Counsel failed to attend kind on a query by the. Commission submitted a written reply which stated that last election of directors of the Company was held on January. 30, 2009 which included Mr. Pervez Ahmad as one of the directors. In v..as also informed therein that election of directors of Pervez Ahmad Securities Limited will be held in October 2009 and that his. clients will endeavour to make the appointments keeping in view the observations or the Commission made in the hearing.
5. 1. have Considered the facts presented before me. The law is unambiguous and clear. I have observed that the argument put forth by the Counsel that Mr. Pervez Ahmad was not a member of stock exchange or in the brokerage business at the time of his appointment as the director has been negated by the fact that Mr. Pervez Ahmad was successfully elected as a director in the Company on January 30, 2009 whereas concurrently he was also a director on the hoard of three other companies engaged in business of brokerage. have noticed that Mr. Perez Ahmad despite of having been issued with a SCN under Section 189 by this Commission dated January 2, 200.9, later took part in the election of directors of the Company thus substantiating the fact that he was in .complete knowledge of the matter of contravention of Section 137(i) of the Ordinance as a result offis election as a director in a listed company. In my view, the contraventi.mt of Section 187 (j) of the Ordinance on part of Mr. Pervez Ahmad is established. Mr. Pervez Ahmad has not acted in accordance with the provisions of the law and he is therefore responsible for non-compliance of the law, kalso appears that Mr. Pervez does not assign due importance to complying with the requirements of the The default in the matter is hereby considered willful and deliberate, This attracts the provision!, of Section 189 or the Ordinance. ./, in exercise of powers conferred upon me under Section 189 or the Ordinance. impose .a fine of Rs.200 for each day in which the default was continued i.e. from the date of election of Mr. Per...v'z Ahmad as a director of the Company in election held on January 30. 2009 [ill date. The cumulative amount of fine on Me, Pervez Ahmad thus shall be Rs.44,000 (Rupees forty four thouSand only),
6. Mr, Pdrvez Ahmad is hereby directed to deposit within thirty days of the date of the receipt of this Order, the aforesaid rine of Rs.44,000 (Rupees forty four thousand ()ray) in the designated bank account mairttained in the name of Securities & Exchange Commission of Pakistan with MCB Bank Limited and furnish a receipted challan to the Commission. In case Of rion-deposit the penalty, proceedings under tie Land Revenue Act, 1967 will be initiated far recovery of the fines as an arrear of land revenue. It may als-o be noted that said penalty is imposed on Mr. Pervez Ahmad in his personal capacity; therefore, he is required lo pay said amount from his personal resources.